Taiwanese Companies Commit to 100% Renewables, Despite a Dirty Grid

Taiwanese Companies Commit to 100% Renewables, Despite a Dirty Grid
Credit: Reuters / TPG
Why you need to know

The first of what might eventually be a flood of Taiwanese companies have committed to sourcing 100 percent of their energy from renewable sources.

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Your alarm goes off, you put on a cup of tea and turn off the fan from the unusually warm night before. At each stage of the repetitive process of waking up, you depend on energy, you depend on fossil fuels. What if you didn’t have to?

Who runs the world? Fossil fuels

The way we make electricity, whether by combusting fossil fuels or through renewables has great impacts on global carbon dioxide emissions, air quality, and economic competitiveness. Last year, energy-related emissions grew by 1.4 percent to an all-time high of 32.5 gigatons (Gt). Energy usage makes up 72 percent of total greenhouse gas emissions by sector. While some suggest that the impact from agriculture and land-use change (deforestation) is underestimated, it’s safe to say the that the extraction, processing, and use of fossil fuels is the primary driver of anthropogenic climate change.

Thus if we want to avoid the nightmare of a 1.5 degree Celsius hotter world, we will need to fix our energy system.

A renewable future

Governments and corporations are increasingly committing to using 100 percent renewable energy. Started by the Climate Group and the Carbon Disclosure Project (CDP) the RE100 campaign commits companies to sourcing 100 percent of their electricity demands from renewable sources.

Google and Apple and seven other companies have already achieved 100 percent renewable electricity usage in their own operations. This distinction is important, as Apple for example is now going up their supply chain and is increasingly making its suppliers commit to 100 percent renewables as well. Apple has suppliers in Taiwan, and Google has offices here. So how are these companies going to commit to renewables if their brand-masters demand it?

What about Taiwan?

Currently, Taiwan generates only 4.9 percent of it’s energy from renewables, with a goal to increase that percentage to 20 percent by 2025. Most of that future power will come from offshore wind, with the remainder from solar, biomass, and geo-thermal.

Until recently in Taiwan, it was exceptionally difficult to even purchase renewable electricity. Commonly, utilities create an option to select “renewable energy” as your source of electricity. Obviously, in reality those specific electrons from the grid could have come from a fossil fuel source, but by paying extra you “buy” the renewables.

Now Taiwan has the T-REC (Taiwan Renewable Energy Certificate), the first of which was issued last year to allow companies to buy renewable power. Purchasing energy through the T-REC helps stimulate and guarantee demand, which in turn helps to drive down the cost.

Real benefits, today

At its onset many doubted whether 100 percent renewable energy was economically possible. Ten years ago, the cost of solar and wind was prohibitively high. Yet now, solar PV module prices have decreased 75 percent in price from 2010 to 2017. Prices are dropping globally, too.

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Credit: Reuters / TPG
Solar lamps are lit up in the evening at Balukhali camp in Cox’s Bazar, Bangladesh, on Nov. 16, 2018.

In the U.S., T-Mobile aims to cut its energy costs by US$100 million over the next 15 years as a result of switching to renewables. These cost reductions come from the return on investment of both developing renewables for operational use and avoiding regulatory burden. It’s a strong motivator as over 80 percent of RE100 members cite financial reasons as their primary motivation for switching.

Unfortunately, with electricity prices artificially set by the government, it’s difficult for Taiwan to reap those same economic benefits. Instead, the private sector will need to lead this transition to drive down transition costs.

Companies starting to lead

The first company to join RE100 in Taiwan was bioscience firm TCI. The next was cosmetics company 3DL who recently joined in September.

In mid-November, TCI held an event to officially launch RE100 in Taiwan, which is working with the Chung-Hua Institution for Economic Research (CIER) as the in-country counterpart. At the launch event Sam Kimmins, head of RE100, The Climate Group, said: “Our partnership with CIER is part of our strategy of working with trusted organizations to develop local platforms for RE100, which will help our member companies work together to source 100 percent renewable power. Such collaboration is crucial in scaling up RE100, creating local policy change, and opening up renewable electricity markets across the globe.”

Also at the event, Remi Lee, Chief Sustainability Officer of TCI said: “Green energy is our economic future.” They see an increasing demand from their customers, stakeholders, and employees.

The motivations for Taiwan to switch to renewables are clear. As large corporates increasingly use renewable energy and consumers demand clean sourcing, manufacturers based in Taiwan will face increasing pressure.

This reality even be a driver of the government's relatively sudden declaration of its 20 percent renewables target in Taiwan – around 25 companies committed to RE100 have operations here, and Taiwanese suppliers cannot risk being displaced as a result of a failure to allow brands to meet their renewable energy targets.

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Photo Credit:Reuters/ 達志影像
Heavyweight chipmakers like Taiwan Semiconductor Manufacturing might have to source 100 percent of their energy needs from renewables if they are to remain part of Apple's supply chain.
Growing pains

Some may be asking, can Taiwan really provide enough renewable energy for these companies, could Taiwan even commit to 100 percent renewables itself? Cities and even some national governments have made plans to commit to using only renewables .

Researchers continue to argue over whether a 100 percent renewable world is possible. For Taiwan, it’s certainly impossible at the moment.

More than half of the island's energy goes to industrial use, with another 10 percent for commercial and 12 percent for residential. With an economy based on petrochemicals and semi-conductors and without political consensus, the transition would indeed be impossible. But it doesn’t have to be.

The importance of goals

Taiwanese routinely defy the odds – overcoming natural disasters and the specter of conflict while evolving a world class healthcare system, and a remarkable waste management system, in no time at all, and successfully transitioning to a mostly peaceful democracy.

If we simply gave up because something is currently impossible, how would we achieve anything?

Increasing energy efficiency, setting up wind turbines, building out smart grid capacity, these are all technical challenges. The changes to industry will be dramatic but not insurmountable. And in making these changes Taiwan will secure itself for the future.

Right now, around 96 percent of energy is imported, and 70 percent of Taiwan’s GDP comes from exports. What if more of that money could stay in Taiwan? What if the grid became more resilient with companies and communities generating their own sources of power?

The previous model of cheap fossil fuel electricity worked. Now, it’s time to change. Hundred-percent renewable energy is coming globally, and the RE100 has more than 150 corporate members as of this writing. Will Taiwan catch up and lead? Or will it be left behind, addicted to a failing system?

Looking at the resilience and perseverance of this island, I am willing to bet on an appetite for change.


Read Next: ANALYSIS: Political Power Structures Shift Ahead of Taiwan' Local Elections

Editor: David Green (@DavidPeterGreen)

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