Taiwan Renewable Energy Certification

(T-REC) Mechanism (2018)

October 10th , 2018

CHEN, Yenhaw

Taiwan Renewable Energy Certification Center

Renewable Energy General Electricity

T-REC Market Structure After the Electricity Act Opens up Renewable Energy Market

2

T-REC Information

Management Platform

Renewable Energy Equipment and Power Generation Verification

Renewable Energy Power Generation Industry Renewable Power Generation Equipment for Personal Use/On-Site

Renewable Energy Users

Renewable Electricity Retail

Industry

On-Site ProductionGeneral Users

1 2

Public Electricity Retail

Industry

3 4A 4B

Environmental Benefits

Requesters

T-REC

Intermediary

Platform

Submit Pairing Request

Information

Wholesale Free Trade

(Price is Not Fixed)

Direct

Supply Wheeling

Transmission and Distribution Industry

Wholesale

(Fixed Price)

Pairing

Request(Wind, Solar Electric, Biomass, Hydro from stream,

and Geothermal)

The Demand Scenario of Voluntary Renewable Energy Market in Taiwan

3

◼ According to the current T-REC applicants, the demand is coming from ICT industry and

finance & insurance sectors.

◼ If the public services, ICT industry, and finance & insurance sectors increase 1%

renewable energy usage each year, by 2027, there would be more than 10% renewable

energy usage. Through the trend, we can estimate that Taiwan enterprises will increase 0.5

billion kWh renewable energy demand each year, which means that T-REC issuance could

be increased by 500,000 each year.

5.1

10.5

16.3

22.5

29.0

35.9

43.2

50.8

0.10 0.19 0.28 0.37 0.45 0.53 0.61 0.680.62 1.24 1.86 2.49 3.12 3.75 4.38 5.025.8

11.9

18.4

25.3

32.6

40.2

48.2

56.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2018 2019 2020 2021 2022 2023 2024 2025

The Renewable Energy Demand of ICT Industry

The Renewable Energy Demand of Finance & Insurance Industry

The Renewable Energy Demand of Public Services

Estimated Total of Renewable Energy Demand

100 GWh

4

51 Renewable Energy Projects

Installed

29 Projects Disagree to install

meters.

15 Projects

Uninstalled

7 Projects

Accomplish data comparison

28 Projects

Electricity meter data is not

transmittable

1 Project

Wind power projects: 3 (5.9%) Solar power projects: 48(94.1%)

7.2585

6.1555

5.23165.1236

4.6679

4.40984.28465

6.83155

5.7997

4.9222 4.81834.6679

4.54674.3364

2.6199 2.6091 2.6169 2.70645 2.7931 2.858552.7492

2.72222.8945

3.07052.9331

2.6159

0

1

2

3

4

5

6

7

8

2012 2013 2014 2015 2016 2017 2018

太陽光電屋頂型(500 瓩以上)躉購價格

地面型

風力陸域躉購價格

平均電價

Analysis of Taiwan Renewable Energy Price Competitiveness

The electricity price of 1001kW or above in summer months is 6.41 NTD/kWh

The electricity price of 1001kW or above in non summer months is 5.03NTD/kWh.

◼ Onshore wind power has reach the normal electricity price.

◼ Some corporations have the competitiveness of choosing solar energy.

◼ FIT prices of onshore wind power and solar power have faced downward pressures.

Resources：Taipower

year

FIT

Pri

ce/E

lect

rici

ty p

rice

(NT

D/k

Wh

)

2.56~3.5 NTD/kWh

(Price of solar power

from FIT auction)

2.2~2.5 NTD/kWh(2025 price of offshore wind

power from FIT auction)

Estimated price interval

if solar energy enters

free market 2.6 ~3.6~ 3.9

NTD/kWh

Solar energy(Roof device with more than 500kW) FIT price

Solar energy(Ground device with more than 500kW)FIT price

Onshore wind power FIT price

Average electricity price

The Current T-REC Market Transaction (till September 28)

◼Quantity In 2017, T-REC market had 5 transactions with 83 T-RECs.

In 2018 (till now), T-REC market has 53 transactions with

1054 T-RECs.

Total transactions: 58 Total T-REC transacted:1137

◼Price T-REC price(unbundle) range is from $ 34USD(1060NTD)

to $ 74USD(2300 NTD) per REC.

6

Note: The exchange rate is 1 USD to 31 NTD.

The Responsibility for Large Electricity Consumers to Use Green Power and Purchase REC

◼ The draft amendment of Article 12 “Renewable Energy Development Act”: If

the contract capacity is above a certain amount(800kW), electricity consumer

shall

1. set up renewable energy power generation equipment and energy storage

above a certain capacity of the equipment in a suitable place, or

2. purchase a certain amount of renewable energy certificate.

◼ If large electricity consumers violet the previous regulations, it shall pay the

deposit to the competent authority for the purpose of renewable energy

development.

◼ The amended Article 12 will be approved in November.

7

◼ According to the data provided by Bureau of Energy, Ministry of Economic

Affairs regarding large electricity consumer (greater than 800 kW) the total

contract capacity is 23,402 MW (with the total of 4,800 households)

◼ From 2016 data, total power system peak capacity is 37,422 MW and the

total power consumption is 255,381 GWh, we can estimate the total

electricity consumption from the large electricity consumers is about 159,703

GWh.

◼ If large electricity consumers are requested to buy 1% extra green energy, the

renewable energy demand will be approximately 1.6 billion kWh which is

equivalent to 1.6 million T-RECs. (approximately 146 MW of solar power

generation capacity). If large electricity consumers are requested to buy 5%

extra green energy, the renewable energy demand will be about 8 billion kWh

which is equivalent to 7.5 million T-RECs. (about 730MW solar power

generation capacity)8

The Estimation of Renewable Energy or REC Demand

9

Thank you !

REC Applied to GHG Management Value Calculation

Cost of decreasing carbon EU Taiwan

Carbon trade market, carbon right price every tonNote1 €20(In 2019, the price

might rise to €35

There’s no carbon trade

market in Taiwan, so

there’s no price data.

Excessive emission penalty(USD/tCO2e) 120.67USD (3620 NTD) 50USD(1500NTD)

Electricity carbon emission factor(tCO2e/MWh)Note2 0.275 0.554

Added-value of greenhouse gas benefit on each REC

(tCO2e)0.275 0.554

Every REC value relative to excessive greenhouse gas

emissions penalty

32.67 USD

(980 NTD)

27.7 USD

(831NTD)

Every REC value relative to carbon right value buying

from reducing the carbon trading

6.5 USD

(195NTD)non

Every REC’s value to apply to GHG management 6.5 to 32.67 USD

(195 to 980 NTD)

27.7 USD

(831 NTD)

Relative to paying extra fees to buy 1 kWh green energy0.0065 to 0.0327 USD

(0.195 to 0.98 NTD)

0.0308 USD

(0.831 NTD)

Note1：Resources of EU’s carbon right price-https://technews.tw/2018/09/03/new-wind-and-solar-now-competes-with-existing-coal-and-gas/

Note2：EU’s Emission Factor data is from Covenant of Mayors, 2010，In 2017, Taiwan EPA announced Taiwan’s emission factor data

The exchange rate is 1 USD to 30NTD.

Possible Solution for Unbundle RECs to Enlarge T-REC Market

Renewable Energy Equipment and Power Generation Verification

End Users Using Renewable Energy

Power Generation Equipment Option

General Users

1A

2A3A

IPP

(Fixed

price)

4A 4B

5

FIT

(Fixed

price)

3B2B

1B

6

Public Electricity

Renewable Energy

Generation

Equipment

(Residual Mix)

Renewable Energy General Electricity

Renewable Energy Power Generation Industry

(Wind, Solar Electric, Biomass, Hydro from stream, and Geothermal)

Direct

SupplyWheeling

Transmission and

Distribution Industry T-REC Information

Management Platform

Environmental Benefits

RequestersOn-Site Production

Wholesale Free

Trade(Price is

Not Fixed)

Public Electricity Retail

Industry

Renewable Electricity

Retail Industry

Pairing

Request

T-REC

Intermediary

Platform

Submit Pairing Request

Information

Renewable Power Generation Equipment for Personal Use/On-Site

Current T-REC Issuance

12

1. Until end of August 21, 2018, 32,674 T-REC have

been issued.

2. Accumulative generation amount is 32,674,000 kWh

of green electricity.

Wind T-REC

28,021

Solar T-REC

4,653