The future of Taiwan’s smart grid

By Jasmine Gan

Interview with Chen Yenhaw, Deputy Secretary-General, Taiwan Smart Grid Association.

Image: Eugene Lim - CC BY 2.0

“Smart grid” has already become old news in Taiwan. Installation of smart meters in residential and industrial systems alike are proceeding at a rapid pace, with 200,000 new smart meters installed every year by Taipower, Taiwan’s monopoly utility provider. By the end of the year, half of the island will be equipped with smart meters: a total of 6 million installations.

“Installation is not so important now,” says Chen Yen-haw, Deputy Secretary-General of the Taiwan Smart Grid Association. Instead, current research in Taiwan on smart grid has moved to focus on commercial application of the technology.

With major changes in Taiwan’s energy landscape, including the recent liberalisation of their renewable energy market and President Tsai’s nuclear-free homeland policy, the challenge will be how to best adapt the mature tech for their purposes. According to Chen, Taiwan’s new priorities will be on developing strategies for demand-side management, refining battery storage solutions, and further innovation in business models.

Demand-side management

Widespread adoption of smart grid tech has led to two major changes in Taiwan, says Chen. The first has been the ability to engage in demand-side management, as smart meters and real-time data make it possible to manage energy demand through price signals.

Recently, Taipower introduced tiered pricing, where participating customers can receive discounted tariffs for off-peak use of energy to encourage energy conservation during peak hours. Another innovative demand-side management strategy is to create a “virtual account” for customers, who can join in groups of 10 to work together to lower their aggregate electricity use in peak hours.

Energy shortage has become a major challenge for the island as Taiwan shifts away from nuclear power, and efforts to conserve energy through demand-side management could help mitigate that.

The rise of the prosumer

The second impact of smart grid adoption has been the greater control of customers over their own energy consumption. “Now customers can choose from different suppliers, different tariffs, different pricing,” says Chen. “Since we opened our energy market in renewables, there will be new renewable retailers and developers.”

Residential solar systems are becoming more common, as the widespread installation of smart inverters allow customers to store and manage energy generated from their own solar panels. These prosumers, customers who consume and produce their own electricity, are a growing presence in Taiwan’s energy market, according to Chen. In Taipei City, a virtual power plant system has been developed to allow prosumers to contribute surplus electricity from their home solar system back to the grid.

For Taiwanese communities living in remote islands, the government has subsidised installation of smart micro-grid systems that integrate renewable energy sources. The mix of solar, wind and diesel energy sources ensure a stable electricity supply despite distance from the central grid. On the remote Qimei Island, 43% of the inhabitants’ energy is now supplied by renewable energy through the smart micro-grid. “The micro-grid technology is very mature now,” says Chen.

But is Taiwan close to moving away from fossil fuels entirely? The main driving force of the recent uptake of renewable energy is the dropping cost of wind and solar systems, says Chen. However, the battery storage for renewables needs further refining. “The efficiency of solar increases by 1-2% every year,” explains Chen. “But the battery system is still not mature enough for real commercial application.” There will need to be a breakthrough in storage solutions before renewables can replace fossil fuels in Taiwan.

A future for energy trading

More development on the business side could lead to truly innovative applications of the advanced technology. Chen envisions cooperation between governments, private sector actors and consumers to come up with ways to utilise smart grid solutions.

A recent example is the collaboration between Taiwan Smart Grid Association and Gogoro, an electric scooter manufacturer, to create a smart grid from its scooter battery charging stations. With charging stations every 1.3km in Taipei, the company provides electricity to the grid when the solar-powered stations are not being used to charge batteries. “Five years ago, the scooter manufacturers came to my office and told me they were building a massive battery system,” Chen recounts. “I told them from the power system’s perspective, we will have the need.”

The cooperation need not be managed by the government. “I’m not really a guy who is familiar with scooters,” says Chen. “But we worked together. It was a bottom-up, multi-disciplinary process.”

Chen envisions that in the future, similar models for energy trading across private power sources and public power plants will be possible through a common platform for the whole country. “A platform like this could be the future for the whole power system,” says Chen.

This kind of multi-industry, multi-actor conversation is already beginning to happen. Taiwan’s adoption of smart grid has opened up new doors for further innovation.