Lai Energy Policy, Fraught with Problems, Must be Rectified
By L. C. Chen
The Storm Media, November 3,2023
In October last year, Democratic Progressive Party (DPP) presidential candidate William Lai announced his energy policy platform which has three key points: First, accelerate the development of "forward-looking energy" such as geothermal energy, biomass energy, ocean energy, and hydrogen energy. Second, continue the development of solar and wind power and significantly increase the share of renewable energy in the short term. And third, build 18 large gas turbine units. Mr. Lai has set a target for the power generation mix in 2030 as 30 percent green energy, 20 percent coal power, and 50 percent gas power.
In September, the International Energy Agency (IEA) released a report entitled "Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach." Here is a sequential comparison of the three key points of Mr. Lai's energy policy with the IEA report:
The first key point is the development of forward-looking energy sources such as geothermal, biomass, and ocean energy. In contrast to intermittent green energy sources like wind and solar power, geothermal energy can generate electricity steadily. It has always been a promising energy source for the government, and some geologists estimate that Taiwan can install 30 gigawatts (GW) of geothermal power within the next 20 years. However, the IEA report estimates that by 2050, global geothermal capacity will reach 129 GW, contributing only 1 percent of the world's electricity. Can Taiwan, a small island, account for 25 percent of global geothermal capacity? Clearly, geothermal energy is not a silver bullet for Taiwan's energy needs.
Taiwan is not well-suited for the development of biomass energy, as it requires vast amounts of land. Successful biomass energy development has been seen in countries like the United States and Brazil, which have extensive land areas. Given Taiwan's conditions, biomass energy's contribution is extremely limited.
In terms of ocean energy, since Taiwan is an island, many mistakenly believe that this kind of energy has bright prospects. In reality, this is a misconception. The IEA estimates that ocean energy will contribute only 0.05 percent to global electricity generation by 2030, and Taiwan should not heavily rely on it.
The development of hydrogen energy should be discussed in conjunction with Mr. Lai's second point, which is wind and solar power.
Why should hydrogen energy be discussed in conjunction with wind and solar energy? The reason is quite simple: the government, under the leadership of President Tsai Ing-wen, has been heavily promoting hydrogen energy due to commitments made in the development of wind and solar energy. In Taiwan, which has an independent power grid, there is a limit to the percentage (penetration rate) of unstable electricity in the grid. During the Chinese New Year holidays earlier this year, when national electricity consumption decreased, the penetration rate of green energy was approximately 30%, and Taiwan Power Company urged all users to unplug their devices when leaving their homes.
According to Taiwan’s government plans, the green energy penetration rate is expected to reach as high as 80 percent by the winter of 2030. How can the grid withstand this increase? To avoid the risk of excessive green energy penetration causing significant issues for the grid, especially in the form of electricity shortages, excess green energy must be stored. In addition to lithium-ion batteries, one method of energy storage involves producing green hydrogen through water electrolysis.
The IEA report explicitly states that the price of green hydrogen is determined by the price of green energy. Taiwan, being located in a rainy region, has solar energy costs that are twice as high as those in other countries. Additionally, due to limited land availability and high population density, large-scale onshore wind power installations are not feasible, which has led to a strong push for offshore wind power with costs approximately twice that of onshore wind power. Due to these natural and geographical constraints, Taiwan may not be suitable for extensive development of green energy.
There are more mature technologies available for carbon reduction in the power sector. Therefore, hydrogen's primary contribution to carbon reduction lies in industrial processes and reducing carbon emissions in long-haul land, sea, and aviation transportation. Using hydrogen for power generation was not originally intended as the main purpose of utilizing expensive green hydrogen for carbon reduction. The IEA plans to have hydrogen provide only 1.5 percent of global electricity by 2050. However, based on Mr. Lai 's plan, hydrogen is expected to provide 9 to 12 percent of Taiwan's electricity by 2050, primarily due to an overabundance of solar and wind power, leading to an atypical increase in the hydrogen power share. This might be a deviation from the optimal path.
In light of the above discussion, it is clear that renewable energy alone may not be sufficient to meet Taiwan's electricity demand. Mr. Lai 's third key point in his energy policy is the accelerated construction of 18 large gas turbine units. On the one hand, phasing out nuclear power while maintaining Taiwan's energy security and addressing carbon reduction requirements has led to a significant focus on gas power generation as Mr. Lai’s primary choice. However, this raises a contradiction when he also presents the goal of achieving a "net-zero transformation by 2050."
Many people may not fully grasp the challenges associated with achieving net-zero carbon emissions by 2050. Carbon reduction in industry, transportation, and even agriculture and livestock is extremely difficult. In comparison, reducing carbon emissions in the power sector is relatively easier. The IEA report makes it clear that in order to achieve net-zero emissions by 2050, the carbon emissions from electricity generation in advanced countries, including Taiwan, must be reduced to zero by 2035. However, Mr. Lai's plan still has a substantial share of thermal power (mainly gas power) in the electricity mix by 2030. To achieve zero carbon emissions in the power sector within just five years is really a significant challenge.
The IEA report also emphasizes that advanced countries should not build new thermal power units without carbon capture and storage (CCS) facilities. However, according to the "Power Development Plan" issued by the Ministry of Economic Affairs, Taiwan is seeking to complete several gas turbine units each year from now until 2030, and most of them are not equipped with CCS. This raises questions about how Mr. Lai seeks to satisfy the IEA's requirement for achieving zero carbon emissions in the power sector by 2035.
Mr. Lai’s proposed energy transition policy does not address electricity costs, but his emphasis on green energy, forward-looking energy, hydrogen power, energy storage, and gas power are noted. All have significantly higher generation costs compared to traditional sources like nuclear and coal power, which provide baseload power.
Based on the analysis above, it is evident that Mr. Lai’s energy transition policy may not stand up to scrutiny, with numerous issues and contradictions left unsolved. A comprehensive revision is needed.
The author is the former chairman of GIBSIN Engineers. This article was originally published in "Le Penseur," a website managed by the Ma Ying-jeou Foundation, and reprinted with permission.