Future trends of green power/spontaneous self-consumption photovoltaics 

Energy Agency's Liberalization Restrictions on Self-Use Photovoltaic Equipment and Renewable Energy Policy Adjustments On December 14, 2023, the Energy Administration of Taiwan's Ministry of Economic Affairs announced a major adjustment to reform renewable energy policies, especially for the self-consumption photovoltaic equipment industry, opening up more restrictions to promote green power development and adapt to the international renewable energy initiative RE100. This article will explore in detail the impact of this policy's liberalization restrictions on the photovoltaic industry and its potential impact on diversified competition among energy suppliers. I. Liberalization and Restrictions 

This policy adjustment by the Energy Administration mainly targets renewable energy self-use photovoltaic power generation equipment, including photovoltaics Type 2 and Type 3, opening up free trading of their power generation capacity, allowing them to be sold to green power sales industries and eventually resold to corporate users. This initiative will provide more choices and opportunities for self-consumption renewable energy generators, while also helping to comply with RE100 requirements and promote the multifaceted development of Taiwan's renewable energy market. 

II. Many Restrictions on the Self-Use Photovoltaic Industry

 In the past, self-generated and self-consumption photovoltaics were severely limited in capacity, mainly used in rooftop photovoltaics with smaller capacity. This has led to various responsibilities and facility challenges for self-consumption power plants. The introduction of the new policy breaks this limitation, allowing for more flexible market entry for self-generated photovoltaics while increasing the supply of renewable energy sales in the electricity industry. 

1. Threshold for Traditional Type 1 Power Plants Traditional Type 1 power plants need to meet strict requirements such as fire protection measures, monthly report submissions, and installation of uninterruptible power supply systems. This ultimately leads to most photovoltaic equipment still being self-used or sold directly to Taipower. 

2. Photovoltaic power plants are divided into 1~3 types of electricity The past "three-to-one" policy has raised the threshold for small and medium-sized power plants to convert to Type 1 power plants. To solve this problem, the Energy Department directly interpreted the Electricity Act, opening up renewable energy self-use power generation equipment (solar photovoltaics types 2 and 3) to sell electricity to renewable energy sales industries, which then resell it to enterprises, making it easier for small and medium-sized power plants to participate in market competition. 

3. Type 3 photovoltaic classification 

(1) Type 1 photovoltaics: Sold to external parties, with independent power generation capacity, usually with a large capacity, can participate in the electricity market, and sell electricity to different users. 

(2) Type 2 photovoltaics: Used for self-use enterprises, with a smaller capacity, usually less than 2,000 kW, power generation mainly to meet the needs of oneself or enterprises. 

(3) Type 3 photovoltaics: usually refers to the original type 3 photovoltaic power plant, which has been changed or upgraded to type 1 photovoltaics that can sell electricity to the outside world. 

III. In response to the trend of low-carbon transition economy, the Energy Department explained the timing of this policy adjustment, mainly to meet the needs of the international RE100 initiative. 

The RE100 initiative requires companies to use 100% renewable energy, driving the demand for green electricity from supply chain manufacturers to gradually rise. This move will help expand green electricity access to the trading market and meet the rapid growth of the renewable energy market. 

1. Types 2 and 3, which can also be resold for self-use , were originally only for self-use, but were later opened to Taipower for full sale. This makes the supply of green electricity in the market more abundant.

 2. Increase the supply surface of the photovoltaic market 

The green electricity generated by the photovoltaic type 2 and 3 power generation enterprises can be sold to the green power sales industry, which can then resell it to enterprise users. This opening policy is expected to bring up to 8.6 billion kWh of potential supply to the market.

 3. Realize the RE100 initiative 

The implementation of the new policy for corporate members will help realize the RE100 initiative, bringing many benefits. First, the renewable energy electricity sales industry will gain more sources of goods to meet market demand and promote the development of the industry. Secondly, individuals and businesses equipped with self-consumption photovoltaics have the opportunity to obtain more competitive purchase prices than Taipower, which will encourage more people to participate in renewable energy generation. Finally, companies can purchase green electricity more easily and in large quantities, contributing to the sustainable operation goals of the RE100 initiative. 

4. Supply-demand replacement (large volume and high price) 

According to Taipower statistics, as of October 2023, the annual power generation of Type 3 solar photovoltaic with a feed-in tariff of less than 5.5 yuan is about 8.6 billion kWh, of which about 7.1 billion kWh is below 5 yuan, accounting for 82%. This means that this policy openness will allow a large amount of low-cost green electricity to enter the market, which is expected to reduce the cost of renewable energy for enterprises and further promote the use of green electricity. 

IV. Diversified competition among renewable energy suppliers

 In terms of price, electricity sellers will need to provide higher prices than Taipower's feed-in purchase price, plus resupply fees, and the retail price of self-consumption may be higher than 5.5 yuan or even 6 yuan in the future. This will depend on whether companies that demand green electricity can accept this price level. However, this move will help reduce the cost of Taipower's feed-in green power purchase while promoting the multifaceted development of the renewable energy market. This adjustment to the Energy Agency's policy has injected new vitality into the renewable energy industry, prompting more self-consumers to participate in market competition, meeting corporate demand for green electricity, and also contributing to the realization of international renewable energy initiatives. This move creates a win-win situation and opens a new chapter in Taiwan's renewable energy development. 

V. Renewable Energy and Sustainable Development 

1. Energy Structure Adjustment 

The implementation of this policy is a positive adjustment of the energy structure. The Energy Department has made it clear that this move is to meet the needs of the international RE100 initiative. The realization of the RE100 initiative requires companies to use 100% renewable energy, putting forward higher requirements for the domestic renewable energy industry while providing opportunities for companies to achieve sustainable business goals.

 2. Low-cost green power enters the market 

According to statistics from Taipower, about 82% of the annual power generation of type 3 solar power is below 5 yuan. This opening policy will allow a large amount of low-cost green electricity to enter the market, helping to achieve the goal of low-cost access to green electricity for enterprises. 

VI. Driving the development and investment of the renewable energy industry 

1. Industrial chain development 

The implementation of this policy will help drive the development of related industries, from photovoltaic manufacturing to system installation to renewable energy electricity sales. The entire industry chain will usher in greater opportunities and challenges, further promoting the vigorous development of the domestic green industry.

 2. Market mechanisms need to be handled with caution 

However, the implementation of this policy also requires careful handling of the corresponding market mechanisms. The quotation and transfer fee setting of electricity sellers need to match market demand and supply to ensure the healthy operation of the market. The government should pay close attention to the competition in the renewable energy market to prevent the occurrence of monopoly and unfair competition, and ensure fairness and transparency in the market. 

3. Creating an Open and Dynamic Energy Market Environment

 This renewable energy policy adjustment has created a more open and dynamic energy market environment for Taiwan. The joint efforts of the government, businesses, and the public will help build a more sustainable and environmentally friendly energy system, promoting Taiwan's transition towards a greener and more carbon-neutral future.

 Overall, the Energy Department's policy adjustment to open up self-consumption photovoltaics not only helps promote the development of renewable energy but also aligns with international environmental trends, contributing to Taiwan's sustainable development goals. 

 VII. Economic benefits and win-win environmental protection 

The economic benefits brought about by this policy adjustment are not only reflected in the development of the renewable energy industry, but also in the reduction of enterprise costs. The popularity of renewable energy and the entry of low-cost green electricity into the market help improve the energy structure of enterprises, reduce dependence on traditional energy sources, and reduce electricity costs. This has a positive effect on enhancing corporate competitiveness, reducing production costs, and achieving sustainable business goals. At the same time, this will also create a more competitive green industrial chain for Taiwan and attract more domestic and foreign investment. This will promote the overall economic strength of the country, create more jobs, and accelerate scientific and technological innovation. The Energy Department's liberalization of self-consumption photovoltaic policies is of far-reaching significance to the development of Taiwan's renewable energy industry. This is not only a support for green energy but also an important initiative in response to international sustainable development. By lowering the barrier to entry and improving market competitiveness in the renewable energy market, the government has created an environment that encourages the development of renewable energy. The implementation of this policy will bring various benefits, including promoting the use of renewable energy, reducing energy costs for enterprises, promoting the development of green industries, and creating more job opportunities. However, during the implementation process, the government should pay close attention to the operation of market mechanisms, prevent unfair competition, and ensure fairness and transparency in the market. 

This policy adjustment is a key step in Taiwan's transition to a low-carbon green energy system and achieve sustainable development goals. Through the joint efforts of the government, businesses, and the public, I believe Taiwan can make greater breakthroughs in the field of green energy, leaving a better ecological environment for future generations. 

Certificate definitions, functions, access channels, or sources of renewable energy 

As global climate change intensifies, companies are facing increasing pressure from policies, investors, and consumers to reduce carbon emissions and achieve net-zero emissions goals. The acquisition and use of renewable energy has become a key means for companies to achieve these goals, and Renewable Energy Certificates (RECs) are the core tool for companies to demonstrate their use of renewable energy. This article will explore the definition, function, and access to renewable energy certificates, and explain their relationship to corporate greenhouse gas emissions, particularly Scope 2 emissions. 

I. Definition of Renewable Energy Certificate 

A Renewable Energy Certificate (REC) is an electronic document (please refer to the figure. Renewable energy. TIGER/Green Certificate), which is used to prove that a specific amount of renewable energy (such as wind, solar, hydropower, etc.) has been generated and fed into the grid. Whenever a unit (usually 1 megawatt-hour, MWh) of renewable energy is generated, the corresponding renewable energy certificate will also be issued. Businesses or individuals who purchase renewable energy certificates, even if the electricity they actually use does not come directly from renewable energy, can use these certificates to declare that they support and indirectly use renewable energy. 

These certificates can be freely traded in the global market and are divided into two types: one is a mandatory certificate under government or regulatory requirements to meet legal or policy renewable energy quotas (RPS); The second is voluntary certificates, which companies or individuals actively purchase out of social responsibility or sustainability commitment. 

II. Functions of Renewable Energy Certificates 

The function of renewable energy certificates is to assist companies in achieving their carbon emission goals, support the development of renewable energy, and enhance brand value. Its specific functions include: 

1.Supporting renewable energy power generation: Purchasing renewable energy certificates can provide additional income for renewable energy power plants, promote the development of renewable energy projects, and promote energy transition. 

2.Carbon Footprint Offsetting: Businesses can use RECs to offset carbon emissions from their electricity usage, which can help them achieve their greenhouse gas reduction goals, especially in scenarios that emphasize carbon neutrality.

3. Compliance with Regulatory Requirements: Many regions have policies that require businesses to use renewable energy in a certain percentage of their electricity, and RECs are an effective means of compliance. 

4.Enhancing ESG Performance: Purchasing renewable energy certificates helps companies improve their environmental, social, and governance (ESG) performance, meeting the expectations of investors and stakeholders for their sustainability commitments.

III. Channels or sources for obtaining renewable energy certificates Enterprises or individuals can obtain renewable energy certificates through various channels (please refer to the table. Renewable energy. TIGHT/Green Power Certificate), here are some common ways to obtain it: 

1.Direct Purchase: Companies can sign power purchase agreements (PPAs) with renewable energy power plants to directly purchase renewable energy and corresponding RECs. 

2.Purchasing Green Power Solutions Through Power Utilities: Many power companies offer green power options, allowing users to pay extra to ensure their electricity consumption comes from renewable sources and provide corresponding RECs. 

3.Participate in market transactions: Companies can trade in international or regional renewable energy certificate markets, such as "Green-e Energy" in the United States or "Taiwan International Green Energy Registry (TIGER)" in Taiwan. 

4.Community Power Generation Projects: Companies or communities can participate in local community renewable energy generation projects and obtain corresponding RECs to support the development of local renewable energy. 

IV. Organizational Greenhouse Gas Emissions/Scope 2 and Renewable Energy Relationship 

According to the framework of the Global Greenhouse Gas Protocol, corporate greenhouse gas emissions are divided into three categories: 

• Scope 1: Direct emissions, which refer to emissions from the burning of fossil fuels in a company's own facilities or vehicles. 

• Scope 2: Indirect emissions, which come from the electricity purchase process used by the enterprise, especially the carbon emissions generated from the burning of fossil fuels in the electricity supply process.

•  Scope 3: Other indirect emissions, including emissions from supply chains, transportation, employee commuting, etc.

In a company's greenhouse gas inventory, Scope 2 emissions refer to the carbon emissions from the power purchase process used by the company, which cannot be directly controlled by the company but has a significant impact on its overall carbon footprint. In this context, the purchase of renewable energy or renewable energy certificates has become an important means for companies to reduce Scope 2 emissions. By purchasing renewable energy certificates, companies can consider the electricity they use to come from renewable sources, thereby reducing or eliminating their Scope 2 carbon emissions. This allows companies to achieve carbon neutrality goals without directly changing their energy supply. In addition, with the promotion of the Science Based Targets Initiative (SBTi) and International Financial Reporting Standards (IFRS), more and more companies are being required to disclose Scope 2 emissions data. Renewable energy certificates play a significant role in this process, helping companies enhance transparency and compliance in their greenhouse gas inventories. 

V. The impact of renewable energy certificates on enterprises and future prospects 

As global regulations on carbon emissions tighten, the demand for renewable energy certificates is expected to continue to grow. Renewable energy certificates not only help companies achieve their emission reduction goals but also enhance their sustainability performance and gain a competitive edge in the international market. Additionally, with the development of blockchain technology, the transaction process of RECs will become more transparent and efficient, allowing companies to participate in international renewable energy market transactions more conveniently and ensure that the credentials they purchase are reliable and comply with international standards. In the future, as policies continue to evolve and renewable energy technologies advance, companies will face more challenges and opportunities regarding the adoption of renewable energy. Companies that can take proactive action to reduce Scope 2 emissions by purchasing renewable energy or investing in related technologies will take a leading position in this new low-carbon economy. As an important tool for companies to achieve carbon neutrality goals, renewable energy certificates have become a core part of the global energy transition. By effectively using these certificates, companies can not only reduce their carbon footprint but also enhance their brand image and market competitiveness. In the future, with the further development of policies, technologies, and markets, the application prospects of RECs will be broader and play a more critical role in promoting the process of sustainable development of enterprises.