Power demand management is crucial to maintaining a stable and sustainable power supply.
The global COVID-19 pandemic has significantly disrupted international trade and this prompts heavy energy importers like Taiwan to be more aware of the urgency of increasing its energy self-sustainability. To mitigate the air pollution of fossil-fired power plants, Taiwan has strived to raise the percentage of renewable energy in the island’s energy mix and implement demand-side management measures, simultaneously. With more strategic management on power demands, we not only ensure stability of power supply, but also strike a balance between economic development and environmental protection.
Taiwan has been struggling to fulfill its global responsibility in reducing greenhouse gas emissions. Moreover, in the global economic scene, more focus is placed on green energy utilized in supply chains; thus more Taiwanese businesses are going for green energy to maintain their competitiveness. A stronger sense of responsible citizenship is also motivating the government to find eco-friendly solutions to power generation. However, according to the Ministry of Economic Affairs’ estimates, power consumption in Taiwan will increase 1.86% annually in the next seven years, and there are growing energy demands generated by returning Taiwanese manufacturers and factory expansions. With its dense population and limited land area, constructing more power plants to meet power demand becomes a heavy burden to the environment. Instead, demand-side management like energy efficiency and demand response measures seem to provide eco-friendly alternatives to balance the supply and demand.
The perspective of present energy usage plans around the world has shifted from the supply side to the demand side, that is, from investing in power generation and transmission infrastructure towards managing the demand effectively, such as energy efficiency and demand response. The goal is to establish reliable and affordable power services while reducing or delaying investments in related infrastructure.
There are many international cases which Taiwan can take as examples, such as the Loading Order implemented in California, U.S. Under this practice, energy efficiency and demand response are prioritized solutions. In 2013, Southern California Edison (SCE Corp.) rolled out the Preferred Resources Pilot (PRP) in Orange County. It is a multiyear program designed to determine whether clean energy resources–including solar, wind, energy storage, energy efficiency and energy conservation—can be acquired and deployed to offset the increasing customer demand for electricity in central Orange County. This experimental project gave SCE Corp. the opportunity to learn how to deploy distributed green energy cleverly to support local peak load increase. The project is expected to supply 200 MW of capacity in 2021 and satisfy 14% of peak load demand, which in turn can absolve the need for new power generators and fulfill carbon reduction policies.
Another example is Massachusetts, which has set an aggressive goal of having 35% of renewable energy in its power supply mix by 2030. In order to achieve that, they launched the Clean Peak Standard (CPS), a regulatory tool to reduce the costs and environmental impact of periods when electricity demand is highest–and generation tends to be the most polluting. This innovative policy leverages market mechanisms to spur on developments in energy storage and demand response industries. Eventually the state can cut down carbon emissions and flexibly dispatch renewable energy to resolve peak load demand issues.
Establishing the loading order of preferred energy resources can be an effective measure to meet energy needs.
Taiwan already has policies and measures related to renewable energy, demand management, and energy efficiency in place. Energy efficiency was taken into account when the government planned out long-term power supply and demand policies. According to The Electricity Act, every year electricity sellers must set up plans that encourage and assist their customers to use electricity efficiently. In recent years, Taipower Company has actively promoted demand bidding measures and built a solar power plant with megawatt capacity. The company also conducts eco-friendly dispatches based on safe, economic, and fair principles.
Nevertheless, Taiwan has not fully developed its potential in leveraging demand resources to reduce peak consumption and implementing flexible dispatching means within the system due to the lack of detailed guidelines on power resource planning and operation. Therefore, it is suggested that competent authorities in the power industry should set clear main policies which align with the nation’s long-term energy consumption growth trend, and implement the Loading Order as well. When the grid faces power demands, there are three solutions that should be evaluated first: energy efficiency, demand response, and distributed renewable energy. Only when all three solutions are not feasible would fossil-fired power plants and substations be built as a last resort.
Overall, Taiwan should set up an independent power industry regulation agency to mandate power companies to plan carefully for generator, transmission and distribution infrastructure capacity expansions. Specifically, power companies should prioritize demand-side management and distributed green energy development. This can help the island increase its energy self-sustainability and stabilize power supply while causing the least environmental impact. Power companies should also regularly conduct benefit assessments and disclose the data so that the public can understand the value and benefits of power demand solutions.
Dr. Chih-Wen Liu received his B.S. degree in electrical engineering from National Taiwan University (NTU) in 1987 and the M.S. and Ph.D degrees from Cornell University in 1992 and 1994. Currently he is the Deputy General Director of Green Energy and Environment Research Laboratories and the Director of Office of Grid Management and Modernization Strategy at ITRI. He is also a Fellow of IEEE and the Distinguished Professor of Department of Electrical Engineering as well as the director of Green Electric Energy Research Center at NTU. His research interests include smart grids, power electronics and magnetic field guided endoscope.