Liberalization of Electricity Market in Taiwan

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Liberalization of Electricity Market in Taiwan

• Su, Jin-sheng
• Energy Commission
• Ministry of Economic Affairs
• August 8, 2001

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Contents 1. Current Electric Industry 2. IPP
Programs 3. Measures Assisting IPPs 4. The
Envisage of the Forth Round IPPs 5. Basic
Structure of Liberalization 6. Energy Policy
Requirements 7. Revise of Electricity Law
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1. Current Electric Industry

• Industry Structure

Taiwan Power Company
IPPs 5 projects, 7,220 MW

• Power Generation
• 72 plants, 27,385 MW.

• Self-generation
• co-generation
• renewables

25yrs PPA
Transmission
Avoided cost
For self-use
Distribution
Supply obligation
self-use users
Customers
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Thermal (17,818MW coal 8100 oil 5404 gas
4314 MW)
Extra High Voltage Substation
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• 2. IPP Programs
• Policy Objectives
• To meet power demand at reserve margin of 20
• 1st 2nd rounds (1995) 10,260 MW (1997-2002)
• 3rd round (1999) 2,840 MW
  (2003-2004)
• To balance regional supply and demand
• To prepare for power liberalization
• 1st 2nd rounds competitive bidding (base load,
  medium load)
• 3re round fixed price, first come first serve
  (gas fired, medium load)
• To follow clean energy policy

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• First Round IPP Projects

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• Second Round IPP Projects

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• Third Round IPP Projects

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• Status of IPP Projects

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3. Measures Assisting IPPs

• Revising relative regulations
• Use of public ground.
• Allowance of land use for power plants.
• Governmental fund financing.
• Foreign capital share up to 49.
• Setting up an ad hoc committee
• Committee members from related government
  agencies
• construction/ land authority/EPA/local
  governments
• Solving disputes on Power Purchase Agreement(PPA)
• Surplus capacity
• Foreign exchange reflection

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4. The Envisage of the Forth Round IPPs

• Rules on applications for a preparatory permit
• Required capacity
• 1. Year 2007 100 MW, gas fired and in the North
  only
• 2. Year 2008-2009 320 MW ( 150 MW reserved for
  TPC)
• Requisitions (Construction planning plus the
  following 6 documents)
• 1.Environment Impact Assessment
• 2.General agreement from local government
• 3.Agreement of fuel supply
• 4.Agreement of power interconnection
• 5.Agreement of land use
• 6.Letter of intent on financing

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• Rules on Power purchase
• Purchase prices
• The Price will decided by bidding process held by
  Taipower .
• Dispatch rules
• 1. Year 2007, medium load
• 2. Year 2008-2009, base load
• Transmission constraints
• Taipower should announce its transmission
  constraints in one month since this program is
  implemented.

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5. Basic Structure of Liberalization
Integrated Utility
Wholesale

• Generation
• Existed Plants
• Under-construction
• Approved Projects
• Future Projects

• Generators
• 1st, 2nd round IPPs
• 3rd round IPPs
• (Non-utility)

After PPA terminated

• Generators
• IPP's new units
• New IPPs
• (Non-utility)

Self-generators
ISO
transmission
Direct Supply
Bilateral Contract
Distribution
Supply Obligation
Self-use Users
Contestable Customers
Direct Users
Captive Customers
(regulated tariff)
(Unregulated tariff)
(Unregulated tariff)
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6. Energy Policy Requirements
Integrated Utility
Wholesale
Generation

• Generators
• 1st, 2nd round IPPs
• 3rd round IPPs
• (Non-utility)

• Generators
• IPP's new units
• New IPPs
• (Non-utility)

Self-generators
required to install hydro and nuclear
power. require to have gas- fired and
renewable capacity through 1.installation,
or 2.PPA.
ISO
Exempted from the obligation
when its capacity less than the
assigned
Direct Supply
Generators are required to have gas-fired
and renewable capacity through
1.installation, 2.purchase by PPA, or
3.pay fund
Bilateral Contract
Supply Obligation
Contestable Customers
Direct Users
Self-use Users
Captive Customers
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7. Revise of Electricity Law

• To allow Taipower to be vertically integrated and
  independent of the privatization process.
• To allow new industries such as generation,
  transmission, and distribution to enter the
  market as soon as the law is passed.
• To establish the Independent System
  Operator(ISO).
• To allow electricity customers to choose their
  suppliers.
• To require electricity industries to install
  certain percentage of clean energy capacity.
• To require Integrated utility and distribution
  company have the obligation of guaranteed supply
  of electricity.
• To allow generators to supply power directly to
  nearby users through private power lines.

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THANK YOU