The Ministry of Economic Affairs announced on Dec. 14 that self-generated green energy (Type 2 and 3 solar plants) can now be sold to renewable energy retailers, which can then resell it to corporate users.
The policy change is estimated to contribute an annual increase of 8.6 billion KWh into the green energy market.
As per the Electricity Act, only electricity enterprises can sell green energy. After the liberalization of green energy market, small and medium solar power plants, referred to as Type 3 solar plant, need to convert to Type 1[1] to resell electricity. However, transitioning from Type 3 to Type 1 presents numerous requirements from large-scale electricity companies, posing challenges for smaller plants.
Miaoli’s rooftop solar project "Sky No.1" is the first private-run power plant implemented cooperatively. (Photo: Green Advocate Energy Co-op)
Considering regulatory convenience and expansion of green energy in the trading market, the Energy Administration has allowed green energy generated from self-use renewable energy systems (Type 2 and 3) to be sold to renewable energy retailers, who can then resell it to enterprises; those with power purchase agreements (PPAs) with Taiwan Power Company (Taipower) can terminate at any time without incurring penalties.
According to Taipower's statistics, as of October, self-generation solar facilities with a feed-in tariff below NT$5.5 produce approximately 8.6 billion KWh annually. Type 3 self-generation solar facilities with a tariff below NT$5 produce around 7.1 billion KWh annually. Green electricity from the two types of plants may enter the market as the government lifts restrictions.
With the loosening of regulations by the Ministry of Economic Affairs, private electricity retailers believe that the Energy Administration should enhance the selling supporting regulations for Type 3 power plants while increasing the supply in the green energy market.
General Manager Yang Chin-yen (楊青晏) of Anneal Energy said that the previous "3 to 1 conversion" process was relatively strict. Verified plants can consistently and reliably produce high-quality green energy over the long term. With the current opening of Type 3 power plants entering the market without exact supporting regulations, Yang expressed concern that without clear guidelines, users might inadvertently purchase electricity from poorly performing Type 3 power plants, potentially leading to varying electricity generation quality.
Currently, the details of the examination process for Type 3 power plant sales are yet to be formulated by the Energy Administration. "The regulations disclosed in the latter part will be a crucial factor influencing significant changes in the electricity retailing industry,” Yang said.
[1]According to the Regulations for the Management of Setting up Renewable Energy Power Generation Equipment, Type 1 power plants were previously the only type permitted to sell electricity externally; Type 2 refers to facilities with an installed capacity of over 2 MW for self-consumption, such as rooftop solar on factories; Type 3, on the other hand, indicates self-generation renewables facilities with an installed capacity below 2 MW, which are used to selling all their output solely to Taipower.
