The Possibility of Full Electricity Liberalization in Taiwan- an Example of the Netherlands



Global Trend of Electricity Liberalization

Recently, many countries have committed to reform the electricity market liberalization in the hope of increasing the competitiveness of the electricity market and thus improving the quality of electricity supply and stability of demand. Taiwan is aiming to liberalize the electricity market and has been developing relevant laws, including the “The Electricity Act” and the “Renewable Energy Development Act”, to promote the liberalization of Taiwan's electricity market and increase the proportion of renewables in Taiwan. However, compared to other countries, Taiwan's electricity market is still relatively conservative. The Netherlands has been leading the electricity market in Europe, and the entire Dutch electricity market was liberalized in July 2004[1]. This article will introduce how the Dutch electricity market works and the opportunities and challenges of electricity liberalization in Taiwan.


Netherlands Electricity Trading Market

Participants in the Dutch electricity market can be divided into generators, transmission and distribution, sales, and consumers. Except for transmission and distribution, which is managed and owned by the government, the rest of the market is a free trade market.

A. Generator Side:

As the Netherlands is a member of the European Union, it has the option of importing electricity from neighboring countries in addition to the usual power plants and renewable energy sources.

B. Transmission and Distribution Side:

The distribution and transmission network are publicly managed and owned. The Netherlands has one Transmission System Operator (TSO), the state-owned TenneT, which provides transmission services, ensures the flow of electricity throughout most of the Netherlands and Germany, and supports the dispatch of renewable energy.

C. Structure of Trading Market:

The wholesale market in the Netherlands can be subdivided into the following:

1. Sign electricity sales contracts

2. Trading through the Dutch Electricity Exchange (APX-ENDEX)

D. Consumers:

The consumer can be mainly divided into three categories: Industry users, household users, and export electricity (Figure 1).

Figure 1. Schematic of the Dutch electricity market


Opportunities and Challenges of Taiwan's Electricity Market Liberalization

Taiwan's electricity market is available only for liberal trading of renewable energy, but there are still considerable challenges to completely liberalizing like that of the Netherlands. In countries where electricity is liberalized, the price of electricity will be raised as it becomes scarce. Therefore, both businesses and households need to have a better understanding of the electricity system to get better electricity prices. However, if Taiwan's electricity market is liberalized in the future, consumers can choose electricity providers when prices are less or use their energy storage systems to sell supplemental electricity when prices are high to gain autonomy in the electricity market.


Reference:


[1] ELECTRICITY LAW AND REGULATION IN THE NETHERLANDS. (2015-01-01). CMS law.tax.future.




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