Unveiling the Concept of Community Wind Power

by Yvonne Tseng, Lynn Hsaio, Vivian Chuang

Do You Know "Community Renewable Energy Projects"?

Community Renewable Energy Projects (or "citizen power plants") are initiatives that involve citizens as the primary participants, including local villages and communities. In addition to prioritizing the participation of local residents, these projects also encourage the collaboration of stakeholders through innovative business models to jointly develop renewable energy power stations. In essence, these projects offer diverse participation methods, allowing more people to get involved and strengthening the connection between the community and the power station.

Taiwan's Renewable Energy Transition is Incomplete Without Community Renewable Energy Projects

Taiwan has set a target for renewable energy to account for 20% of its power generation by 2025. In recent years, the government has actively promoted energy transition, with Community Renewable Energy Projects playing a key role in realizing this goal. This concept was introduced in Europe, where citizens develop renewable energy projects collectively and jointly invest in and manage the power plants while sharing the profits. Inspired by successful experiences abroad, Taiwan has witnessed joint efforts by businesses and civil organizations to promote local Community Renewable Energy Projects.

The 2019 Renewable Energy Development Act amendment officially included provisions for rewarding Community Renewable Energy Projects demonstration projects. The government established the Feed-In Tariff (FIT) system to encourage renewable energy development, which serves as the primary revenue source for these projects and ensures profitable returns. In 2020, the Incentive Regulations for Demonstration of Renewable Energy Community Power Station Installation by Cooperative and Community Public Offering were announced, marking the beginning of Taiwan's efforts to promote Community Renewable Energy Projects using the cooperative model.

The 2020 Energy White Paper outlined the establishment of a dedicated community renewable energy information platform and the creation of a specialized office for regulatory reviews. It also emphasized providing appropriate incentives and mechanisms to promote citizen participation in setting up Community Renewable Energy Projects. This initiative aims to empower the public to take control of the energy supply, ensuring that the distribution and management of energy align with principles of social equity and justice.

What Is the Purpose of Community Renewable Energy Projects?

At present, the majority of Community Renewable Energy Projects in Taiwan are centered around solar power, which has a lower barrier to entry. However, it's important to consider which type of green energy can effectively facilitate both energy transition and local development in a land-scarce country like Taiwan.

Taiwan has abundant wind energy resources, and the cost of developing onshore wind power has been decreasing, making it one of the most economically viable renewable energy sources. However, the development of Community Renewable Energy Projects for wind power in Taiwan has faced challenges. The high funding threshold for wind turbines, combined with the public's limited understanding of wind energy, complicates stakeholder involvement. Factors such as resident protests, environmental groups, and local opinion leaders often lead to delays in development plans. Although some developers are willing to promote community-based wind power, it remains challenging, and there have been no successful examples of such projects in Taiwan.

One of the most notable cases of community wind power in Taiwan is "The Development Plan of the Low-Carbon Penghu Island," a 5-year project that began in 2011, with wind power as a key strategy. The Penghu County Government led the way in community investment by establishing the Penghu Energy Development Company, a joint venture between the government and the private sector. However, the company faced significant challenges due to the delayed completion of the Taiwan-Penghu undersea power cable, insufficient capital from key shareholders, and a lack of enthusiasm for public investment.

Breaking Barriers in Wind Power Development

Looking at successful international practices, particularly in onshore wind power development, there is an increasing emphasis on sharing the benefits of natural resources with local communities. Community Renewable Energy Projects take various forms, with 2 common models listed below:

Cooperative:
This model is a form of community participation in energy projects and has been a key driver of Europe's energy transition. In Europe, there are approximately 3,500 Renewable Energy Cooperatives (REScoop). This model allows local residents and stakeholders to directly participate in the planning, siting, operation, and job creation of wind farms, and also share the profits from electricity sales. This approach helps attract private investment and reduces public concerns and disputes in the wind power development process.

ommunity Benefits:
"Green energy benefit funds" have developed in diverse ways in renewable energy projects, particularly solar and wind power. Common local participation methods include providing scholarships, establishing community centers in village offices, enhancing local employment opportunities, and fostering community interaction.

Beyond these 2 common models, there are many possibilities for the future development of Community Renewable Energy Projects. By adopting diverse approaches, local residents can not only receive stable and guaranteed returns but also address unmet needs within their communities.

Overcoming Challenges in Community-Based Wind Energy

The development of wind energy as a part of Community Renewable Energy Projects in Taiwan faces significant challenges, including financial barriers and complex stakeholder engagement. While solar power remains the dominant form of community energy, it is crucial to explore how wind power, with its growing economic viability, can contribute to Taiwan's energy transition and local growth. Lessons from international success stories show that models like cooperatives and community benefits are key to aligning renewable energy projects with local community interests, paving the way for broader acceptance and successful implementation.

Source: Arbon Capital Co., Ltd. (For reprints, please obtain permission and cite the source accordingly.)

Referemce:
https://tpcjournal.taipower.com.tw/article/3772
https://www.merit-times.com/NewsPage.aspx?unid=398380
https://rsprc.ntu.edu.tw/zh-tw/m01-3/en-trans/1770-0313-community-renewable-process.html
https://rsprc.ntu.edu.tw/zh-tw/m01-3/energy-transformation/966-1070524-civic-power-plants.html