Taipower resorting to new tool to stave off power shortages
The state-run Taiwan Power Co. ( Taipower, ) urged big electricity consumers on Wednesday to join its new “demand bidding” program, under which the utility “buys back” power from big users capable of cutting back their energy consumption.
Taipower, which officially launched the demand response program in May for the first time, is having big power users “bid” how much power they could forgo on a particular day and the price per kilowatt-hour they are willing to do it at.
The utility paid as much as NT$9.5 (US$0.3) per kWh to demand bidding program participants for their electricity in the past week, when the supply of electricity was tight due to spiraling demand amid scorching heat, Taipower President Chu Wen-chen ( ) said.
“Users not only saved money by using less power, they also earned NT$9.5 per kWh from Taipower,” Chu said.
In the past, Chu explained, peak loads were seen in July and August. But this year, electricity consumption began breaking records in late May and has risen 8.3 percent in June compared with the same period a year earlier, a rise Chu described as “shocking.”
When Taipower’s operating reserve of electricity fell to dan- gerously low levels in the past, it often resorted to using fuel oil or diesel to generate power at a cost of about NT$8-9 per kWh, about three times as high as its average cost of roughly NT$3 per kWh, the executive said.
The demand bidding program, which has come into vogue in the United States and elsewhere, gives Taipower a more marketdriven option to increase its operating reserves while giving big power users an incentive to save power.
There are currently 27 big power consumers that have joined the program, and Chu urged that more organizations, such as government institutions, office buildings, shopping malls, hotels and schools get in the act.
According to Taipower, the participants of the day- ahead program can submit load reduction bids on an hourly basis. Program terms include dayahead notice by 6 p.m., and a minimum load reduction bid of 50 kW for two to four consecutive hours.
The bidding takes place each week, with the price capped at NT$10 per kWh for qualifying load reduction.
If the need arises, Taipower selects the bidders that have offered the lowest price first, and Chu said the company guarantees that it will buy any electricity offered at a price of NT$ 3 to NT$4 per kWh.