Minister Kuo's Whimsical Ideas Expose Lies Behind Energy Policy
China Times Editorial, October 17, 2024
Minister of Economic Affairs J.W. Kuo's statement that "We should build green power plants in the Philippines and transfer the electricity back to Taiwan" has sparked public outrage. Although Minister Kuo has apologized, he did not retract the idea. The Executive Yuan further stated that countries in the region with similar goals could collaborate on carbon reduction, confirming that the proposal to develop energy in the Philippines is not just a personal notion of Minister Kuo’s but a strategic direction that the government is considering.
Additionally, as early as June this year, J&V Energy Technology Co. Ltd. announced plans to establish a solar energy company in the Philippines and has already submitted a report to the Department of Investment Review, Ministry of Economic Affairs (MOEA). In light of Minister Kuo's remarks about power generation in the Philippines, many are questioning how J&V Energy Technology's overseas investment could be so precisely focused on the Philippines, raising suspicions about connections to "friends of the DPP."
Minister Kuo, being responsible for Taiwan's economic policy, should not have made such a hasty announcement before plans for an overseas power plant were fully developed. However, what is even more concerning than his statement is that the proposal to generate electricity in the Philippines has exposed the flaws in the DPP administration’s energy policy—an issue that the administration of President Lai Ching-te can no longer avoid and must now confront directly.
When President Lai took office, he was already aware that the "2025 nuclear-free homeland" policy, proposed by former President Tsai Ing-wen, was unattainable. As a result, he quietly delayed the goal by one year and adjusted it to aim for 20 percent renewable energy by 2026. However, despite these adjustments, the consistent message from both the Tsai and Lai administrations has been that "there is no electricity shortage in Taiwan."
If there truly is no electricity shortage in Taiwan, why is the MOEA actively seeking power sources, even going so far as to consider the Philippines, where the average price per kilowatt-hour is over $2 higher than in Taiwan? Moreover, since the Tsai administration took office, Taiwan has experienced frequent power outages, breaker failures, and disruptions. It's clear to everyone that Taiwan simply doesn't have enough electricity.
Second, Minister Kuo's remark that generating electricity in the Philippines "can make green electricity cheaper" is quite intriguing. The legislature has estimated that Taiwan's south-to-north power transmission suffers a 3.5 percent loss, with an annual loss of about 9.5 billion kWh, equivalent to approximately NT$40 billion (US$1.2 billion) when calculated at 4.3 NTD per kWh for industrial electricity. It's well known that using undersea cables will inevitably result in power loss. Minister Kuo himself estimated that transmitting electricity from the Philippines to Taiwan would result in a 33 percent loss. In other words, if Taiwan purchases 100 kWh of electricity from the Philippines, it would only receive around 67 kWh, with the loss being part of the electricity cost. Furthermore, building an undersea cable between Taiwan and the Philippines would be a lengthy and costly endeavor.
Despite all this, Minister Kuo continues to insist that green power from the Philippines would be cheaper, which either indicates dishonesty or suggests that Taiwan’s current green energy is excessively expensive. His acknowledgment of a 33 percent transmission loss and the claim that it's easier to build power plants in the Philippines than in Taiwan imply that this idea wasn't spontaneous—the relevant authorities have likely been studying it for some time.
Since former President Tsai Ing-wen’s push for renewable energy, the high costs of wind, solar, and other green power sources have been criticized, but the DPP administration has never acknowledged this issue. However, according to the latest electricity costs released by the Taiwan Power Company, wind power costs NT$6.59 per kilowatt-hour, solar power NT$4.85, geothermal power NT$6.66, while nuclear power costs only NT$1.16 per kilowatt-hour. Whether Taiwan’s green power is too expensive is clear from these figures—and Minister Kuo’s comments have inadvertently confirmed the answer.
Due to the high price of green power, it has attracted many investors over the past few years, leading to various chaotic and even illegal practices. One such example is the Tainan photovoltaic case, which remains under investigation. Recently, former DPP executive Kuo Chai-chin was released on bail in connection with this case. Additionally, Kuomintang (KMT) legislator Lo Chi-Chiang uncovered the potential involvement of "Duder Energy" in the illegal release of shares. Although the MOEA initially imposed a punitive default of about NT$41 billion (about US$1.2 billion), the actual penalty shockingly amounted to just over NT$300 million (about US$9.3 million). Whether any officials are suspected of harboring or abetting misconduct in these cases must be thoroughly investigated.
After taking office, President announced plans to invest NT$900 billion (about US$28.8 billion) in green power generation, emphasizing the need for a secondary energy revolution with the goal of achieving net-zero carbon emissions by 2050. The first step in this process is to attain a 30 percent share of green power by 2030, which seems highly unlikely. As of 2023, Taiwan's share of green power stands at just 9.5 percent. Given this progress, not only has the Tsai administration's original goal of 20 percent green power by 2025 been set back, but President Lai's target of 20 percent by 2026 also appears challenging to achieve. Thus, reaching the mid-term goal of 30 percent green electricity by 2030 will be difficult.
Regarding the Lai administration’s ambition to achieve net-zero carbon emissions by 2050, it is important to note that gas-fired power generation is expected to account for one-fifth, or even more than one-fourth, of Taiwan's total electricity generation by that time. Claiming such an energy structure as net-zero would be misleading. Additionally, the feasibility of hydrogen energy contributing 9 to 12 percent to the energy mix is equally questionable. In other words, there are too many uncertainties surrounding President Lai's secondary energy revolution, and it risks becoming an ‘empty dream.’
There is not enough electricity, green power is too expensive, and the proposed power ratios are unrealistic. The DPP administration’s electricity policy has not only been poorly conceived but has also consistently highlighted its shortcomings. Does President Lai still intend to be stubborn, forcing everyone to bear the burden of rising electricity prices or, worse, the risk of power shortages? Minister Kuo has revealed three major inconsistencies all at once: insufficient electricity supply, exorbitant costs of green energy, and unrealistic electricity ratios.
Photo from: United Daily News
Article from: https://www.chinatimes.com/opinion/20241017005290-262101?chdtv