Households in Bangkok have installed rooftop solar to reduce demand when air conditioning use is at its highest.

This past August, surging air conditioning demand and the accidental shutdown of a natural gas-fired plant led to a blackout that cut power off to 6.6 million customers for a five-hour period, a quarter of Taiwan’s population.

This summer’s blackout creates an opportunity for the Tsai administration to review its national energy and critical infrastructure strategy. The interruption highlights Taiwan’s insufficient generation capacity and inflexible centralized generation architecture that struggles to meet spikes in electricity demand. Given its similarities to Taiwan, the Thai experience may be instructive on how to implement renewables and why energy storage systems would provide much needed flexibility.

The Thai experience

When we think of global leaders in solar, Germany and California come to mind, not Thailand. In fact, Thailand is one of the top ten solar markets in 2017. This growth is due to the clever use of subsidies, innovative research partnerships, and engagement between investors, utilities and independent power producers.

Taiwan and Thailand both have large amounts of incoming solar radiation but also a tropical monsoon climate. Even with daily downpours during the rainy season, solar panels achieve a capacity factor of 16 percent in Thailand. Solar now contributes to about 3 GW of capacity in Thailand, which represents more installed capacity than Taiwan and the rest of Southeast Asia combined.

Households in Bangkok have installed rooftop solar to reduce daytime peak demand when air conditioning use is at its highest. Solar panels generate power at the same time air conditioning units need electricity. For utilities the business case is compelling, distributed rooftop solar helps defer the costs of generation, transmission, and distribution. Why? Power is generated and used locally. Both countries share the challenge of meeting peak air conditioning requirements on hot days, which are increasingly more intense and frequent.

Moreover, both countries also suffer from major monsoons and typhoons that damage transmission lines. By taking advantage of solar farms and rooftop solar, power utilities and building owners work together to ensure not only there is a greater reserve margin but the ability to create resiliency in the grid through building local capacity.

For both Taiwan and Thailand, rooftop solar is an area of opportunity, particularly considering Taiwan’s population density. Beginning in 2018, stronger incentives to build out rooftop solar systems will take effect as net billing is implemented in Thailand. This allows Thai building owners to generate electricity for their own use and sell any excess energy to the utility.

The devil is in the details

While robust incentives help both countries increase its renewable capacity, Thailand’s growth was not without its challenges. These included the lack of regulatory coordination in the permit process that created a major drag on implementation. Furthermore, Thailand was challenged with developing new processes to integrate solar into a traditionally linear centralized power grid, among other business barriers that prevent innovative business models that could revolutionize the grid.

These are critical areas that the Taiwan government must pay attention to at all levels, especially as Taiwan begins to subsidize rooftop panels and loosen requirements for installing solar panels on rooftop structures. The central government must help building owners smooth the path forward with respect to building and construction regulations, the permit process, and quickly addressing barriers to change.

Taking a further step forward: energy storage

Any program that subsidizes the deployment of a new energy source must be designed around the concept of improving public health, increasing the flexibility, and resilience of the grid. For Taiwan, energy independence is a national security issue, particularly given the current cross-strait environment. This is the very reason why the falling cost of battery storage is a game changer.

As an intermittent power source, wind and photovoltaic solar (PV) cannot provide “base load” power in the way nuclear and fossil fuels can. But when combined with energy storage, whether it be pumped hydro or batteries, renewables can become a dispatchable source of electricity. What does it mean to be dispatchable? Power generation that can be turned on or off, or adjust power accordingly as needed by a plant owner. Energy storage — in the form of pumped hydro or batteries — enables greater grid flexibility. Software can easily manage the storage of excess energy and immediately make it available. Software and battery technology is well within Taiwan's manufacturing expertise. Generating distributed energy resources on-site reduces over-reliance on the grid and prevents the rolling blackouts that Taiwan recently experienced.

Besides reducing peak demand, these combined systems shift night-time loads, further improving demand flexibility and making the grid more efficient. This strategy could yield even further savings in the future – as summers become hotter and air conditioning demand rises — solar and wind generators rooftops become even more economically compelling. We have observed and documented this phenomenon in Thailand over the past five years through innovative research partnerships to seek out policy innovations that scale up rooftop solar PV and wind-farms.

With respect to time-to-market, distributed rooftop solar and storage can be deployed within weeks on buildings and households. In contrast, new thermal generation capacity takes years to build. These advantages are further amplified when combined with efficiency upgrades and updated building codes.

Final considerations

Renewables paired with energy storage provide a tremendous public health benefit: no greenhouse gasses or air pollution are created during power generation. The negative impact of air pollution on productivity are clear as recently reported by the OECD. Furthermore, the Lancet recently reported that air pollution is linked to 6.5 million fatalities in 2015. Noxious gasses, particulate matter have ravaged China and India due to the use of fossil fuels.

With its deep embrace in the global supply chain and technical capacity, Taiwan is in a position to meet its own domestic demand for solar, energy storage, and smart grid technologies — and also export smarter storage technologies to the global market.

Read next: The Devastating Human Costs of Taiwan’s Fossil Fuel Subsidies

TNL Editor: Morley J Weston