Executive Yuan Approves Amendments to the "Electricity Act" Drafted by the Ministry of Economic Affairs

To address a future energy structure dominated by renewable energy and a more dynamic electricity trading model, the Executive Yuan approved the Ministry of Economic Affairs’ proposed amendments to certain provisions of the Electricity Act on the 9th. These amendments will allow Taipower to integrate generation, transmission, distribution, and retail resources while maintaining its current operational model. The changes also aim to invigorate green energy trading and incorporate emerging electricity resources such as grid-connected energy storage and demand response into the regulatory framework, guiding industry investment in potential power resources.

The Ministry of Economic Affairs explained that in response to the challenges posed by renewable energy and extreme climate conditions to power dispatch, and to stabilize electricity supply while achieving net-zero transformation goals, substantial financial investment is required in power generation and grid infrastructure. Taipower should maintain its integrated organizational structure, combining generation, transmission, distribution, and retail resources.

Under the current Electricity Act, renewable energy sellers can only supply power to users, and the legal status of emerging power resources like energy storage and demand response remains ambiguous. Given the continuous entry of renewable energy and emerging resources into the market, it is necessary to reconsider the setup of Taiwan's future electricity trading platform. To address these issues while ensuring a stable power supply, the Ministry of Economic Affairs adjusted relevant provisions of the Electricity Act to align with practical developments and regulatory needs in the electricity market.

The Ministry emphasized that the primary objective of this amendment is to ensure a stable power supply while facilitating green energy trading, adapting to trends in electricity market transformation, and balancing efficient management with open competition. The revisions focus on four main aspects:

1. Taipower will maintain its current, undivided operational model, leveraging synergies from integrated generation and grid operations to enhance investment efficiency and ensure supply stability.

2. Renewable energy sellers will be allowed to trade electricity with each other, increasing operational flexibility for industry players.

3. Grid-connected energy storage and demand response will be incorporated into the regulatory framework, reducing risks for developers and expanding potential power resources.

4. The neutrality of the electricity trading platform will be ensured, with strengthened supervision mechanisms to promote market transparency. Independent trading entities may be established depending on market development.

The Ministry stated that these amendments to the Electricity Act aim to create a more favorable environment for renewable energy development in Taiwan. They will also enhance operational efficiency within the power sector, improve grid resilience, and protect user rights, fostering a win-win situation for the government, the electricity industry, and consumers.