Taipower re­sort­ing to new tool to stave off power short­ages

The China Post - - TAIWAN BUSINESS -

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.

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