Can ‘Taiwan’s Citizen Power Plant’ lead to energy autonomy in Taiwan? -Taiwan Insight

Written by Hui-Tzu Huang.

In the past, in Taiwan, energy usage, like electricity was not a major concern for most people. We just needed to pay our electricity bills on time. But in recent years, that mindset has slowly been changing. This shift comes from citizen anti-nuclear movements, rising electricity prices, controversies over energy technologies, and influence from the experiences of energy cooperatives abroad, like in Germany or Japan. Some residents in Taiwan are gradually embracing the concept of energy autonomy. The concept of an “energy prosumer” has flipped the traditional perception of centralized energy. An energy prosumer combines the terms “energy producer” and “energy consumer,” meaning citizens are no longer just consuming power; they can also generate their electricity. In the future, they might even be able to distribute electricity themselves.

Burghardt Flieger, A pioneer of German energy cooperatives, once said: “Energy cooperatives are the counterpoint (Gegenpol) to globalization.” Energy cooperatives are generally defined as non-governmental organizations created to promote renewable energy and provide services for the members. As globalization progresses, wealth continues to accumulate in the hands of large international corporations. Cooperatives, as a legal organizational form, economically allow members to collectively afford and politically ensure citizen participation. From this perspective, cooperatives represent one of the “most important alternative solutions” to counteract globalisation.

How has the trend of user-oriented energy cooperatives, rather than investor-oriented ones, developed in Taiwan? Taiwan’s energy landscape exhibits several distinct characteristics. Firstly, electricity prices are extremely cheap, leading users to be indifferent towards their electricity consumption. Despite a recent increase in electricity prices in April 2024, households typically only pay around 2-6 NT dollars per kilowatt-hour. Consequently, the low electricity prices result in a lack of motivation among residents to engage in energy conservation efforts. Secondly, since the Renewable Energy Development Act was enacted in 2009, the government has vigorously promoted renewable energy sources such as solar photovoltaic, onshore and offshore wind power, fishery-electricity coexistence, and the current focus on geothermal development. However, the government’s handling of controversies surrounding renewable energy has not shown much progress. This has created numerous negative perceptions among the public, such as the perception that conglomerates control renewable energy and are simply a replica of the petrochemical industry, integrating both legal and illegal influences. In summary, the combination of low electricity prices and immature renewable energy technologies coupled with societal relations has resulted in a lack of high motivation among the public to participate in renewable energy initiatives.

Despite this, there is still a group of environmentally conscious individuals in Taiwan who have initiated citizen power plants scattered across various locations in Taiwan, including urban and rural areas, as well as the northern, southern, western, and eastern regions. In terms of renewable energy types, these projects mainly involve solar energy and micro-hydropower, with a particular emphasis on rooftop solar installations. Since 2011, the establishment of the “One Person, One Kilowatt” initiative in Taipei City has been the catalyst for these citizen power plants, advocating for energy autonomy and drawing lessons from Germany’s experiences. Sunnyfounder, Taiwan’s first online crowdfunding-based citizen power plant, has over 600 sites across the country, with a total participation of 33,000 memberships. It collaborates with welfare organizations or donates a portion of its profits to them and is the only citizen power plant authorized for electricity sales. Green Advocates Energy Co-op is the first citizen power plant in Taiwan organized as a cooperative, with a total of 9 sites.

Taihsi Village in Changhua County is a representative example of citizen power plants in rural areas, aiming to transform from a region formerly impacted by petrochemical industries into one that promotes local development through green energy. Taromak in Taitung is a citizen power plant initiated by Indigenous tribes to advocate for the self-use of electricity. Kinmen Renewable Energy Community Cooperative is the only citizen power plant on an outlying island. Ji-an Township in Hualien, located in the eastern rural area, is the only citizen power plant primarily focused on micro-hydropower.

In Taiwan, the organizational forms of citizen power plants are highly diverse, including limited liability companies, cooperatives, nonprofit organizations, social enterprises, and unincorporated groups with designated representatives or managers. The Energy Transition White Paper stipulates that citizen power plants must meet the following criteria: participation in funding by the public, sharing of benefits among participants, or feedback to local public services and charitable purposes.

Different types of citizen power plants actually have different philosophies. Online crowdfunding-based citizen power plants, as a form of social innovation, may not necessarily be recognized by citizen power plants due to their lack of local identity. Citizen power plants that sell electricity through Feed-In Tariff (FIT) have also been criticized, as they are perceived as not conducive to energy autonomy. Some citizen power plants led by businesses have been criticized for residents’ lack of actual participation, contrasting with citizen power plants where residents are actively involved. Given the various forms of citizen power plants, some idealistic participants doubt whether they truly align with the ideals of community development and energy autonomy. If a citizen power plant does not directly contribute to these goals, can it still be considered a citizen power plant?

In Taiwan, the expansion of citizen power plants is often criticized for its potential commercialization and loss of integration with local development. Similar problems also exist in the development of energy cooperatives in the international community. From the inherent characteristics of energy cooperatives, there are advantages such as reduced contract costs, low risks, and higher participation. However, cooperatives may also face pressure to adopt a corporate structure. Shareholders can expect investment returns and decision-making power, gradually leading cooperatives towards profit-oriented companies.

Additionally, Taiwan faces a unique challenge related to the role of Taiwan Power Company (Taipower). Although Taiwan’s Electricity Act has gradually moved towards liberalisation, it has not been fully implemented yet. Taipower is a product of the authoritarian regime era and still dominates Taiwan’s power generation and transmission. Despite setting a development schedule for smart grids, there is internal disagreement within Taipower regarding the definition of distributed energy. Many employees still believe that Taiwan, being a small island unlike the United States, does not necessarily need to further pursue distributed energy. Currently, the goal of Taipower’s distributed grid project is to directly supply power from gas turbines or renewable energy sources to science parks and industrial parks rather than focusing on non-industrial areas. Therefore, the underestimation of distributed energy’s potential hampers the development of small-scale citizen power plants and fails to address the issue of insufficient power lines in rural areas.

Most citizen power plants choose to sell electricity to Taiwan Power Company through FIT to gain higher profits compared to self-consumption. This brings us to a dilemma: despite the rising electricity prices, Taiwan’s electricity rates remain relatively low. As a result, the purchasing price is consistently higher than the self-consumption price. This pricing structure may effectively promote the development of a distributed energy system and enhance energy security, both important goals of the energy transition.

Citizen power plants in Taiwan are experiencing limited growth for several possible reasons. First, many people are still unaware of how to participate, and the concept of citizen power plants is not yet widespread. Second, the attitudes and regulations differ significantly across various counties and cities. For example, Taipei and New Taipei City are more open to such initiatives and have relatively comprehensive regulations. However, interestingly, whether to enforce these regulations still depends on the enthusiasm of senior officials and the willingness of staff to implement them. Third, the government’s approach to promoting citizen power plants is highly contentious for some participating groups. For instance, in Taipei, the government invites groups to bid for citizen power plants through tendering, but the bidding regulations are not favorable. The government requires a 2% contribution from citizen power plants, along with engaging in community service or environmental education. However, there are no similar requirements for businesses.

Moreover, even if residents are interested in citizen power plants, they still feel doubtful about the application process. Specifically, although it is legal to install citizen power plants on illegally built rooftops, people are still afraid that they will be punished if they apply to local governments. Lastly, green finance lending still relies heavily on traditional credit principles. Banks primarily consider the operational scale and the credit of borrowers based on risk assessments. This makes it extremely difficult for small-scale citizen power plants to secure financing.

Despite facing various challenges in developing citizen power plants, I believe that citizen power plants remain a crucial concept and practice in ensuring energy security. Due to geopolitical factors and the high demand for electricity from the semiconductor industry, Taiwan has a high level of energy vulnerability. Citizen power plants are the result of increasing awareness among people about energy participation. Conversely, they are also an important driver for raising public awareness of energy. If the promotion and implementation of citizen power plants can be sustained, the public will be more knowledgeable about energy systems. This, in turn, can break the situation where specific entities or businesses monopolize the energy system. Furthermore, citizen power plants provide a stronger oversight role in the social and environmental impacts of energy technology.

Hui-Tzu Huang is an Assistant Professor at the Department of Cooperative Economics and Social Entrepreneurship at Feng Chia University and a Network Fellow at Future Earth Taipei. She extends her sincere gratitude to the Institute of Sociology at Academia Sinica and the Risk Society and Policy Research Center at National Taiwan University for their invaluable contributions to this research. The insights gained from discussions and interviews with them have greatly enriched the content of this article, and she is truly grateful for their support and resources.

This article was published as part of a special issue on “Exploring Technology and Society in Taiwan.”