‘Elec­tric­ity farm­ing’ is the busi­ness trend that is re­shap­ing the do­mes­tic mar­ket

The China Post - - BUSINESS -

Chen Chu-tsai was un­able to es­cape the re­ver­ber­a­tions of “fake agri­cul­ture, real elec­tric­ity farm­ing” news re­ports.

In the ef­fort to ac­cel­er­ate the pace of the mil­lion sunny rooftops pro­gram, in Oc­to­ber 2013 the Ex­ec­u­tive Yuan worked with the Coun­cil for Agri­cul­ture to per­mit “des­ig­nated agri­cul­tural ar­eas and gen­eral agri­cul­tural ar­eas” to ap­ply for and build so­lar power fa­cil­i­ties, pro­vided that they be an­cil­lary to “agri­cul­tural pro­duc­tion fa­cil­i­ties.”

In just one year, “PV parks” with com­pa­ra­ble power gen­er­a­tion ca­pac­ity to Chen cropped up all over the Yun­lin coun­try­side like mush­rooms af­ter a spring rain, be­com­ing the main source of the sig­nif­i­cant growth of so­lar elec­tric­ity in Tai­wan last year. But the ar­eas un­der many of the so­lar tents were bar­ren, save for tan­gles of brush and weeds.

Ex­ten­sive neg­a­tive media cov­er­age de­scribed it as a “sec­ond farm­land dis­as­ter” af­ter a pre­vi­ous wave of mis­ap­pro­pri­a­tion of des­ig­nated farm­land for residential and com­mer­cial us­age. Agri­cul­ture chief Chen Bao-ji promptly put a halt to the pro­gram, task­ing lo­cal gov­ern­ments to con­duct strict in­spec­tions.

In an in­ter­view with Com­mon­Wealth, Chen Bao-ji stressed that “energy farms” must first of all be run as ac­tual agri­cul­tural farms. “If so­lar power (pro­duc­tion) im­pacts your (ex­ist­ing) agri­cul­tural pro­duc­tion, that’s not ac­cept­able,” he said.

Con­duct­ing a sur­vey of our own on the ground in Yun­lin County, Com­mon­Wealth found that there were in­deed a cer­tain num­ber of newly con­structed green­house-like trel­lises within which there was a row of mush­rooms grow­ing in in­su­la­tion ma­te­rial but no sign of ir­ri­ga­tion equip­ment. A lo­cal fig­ure ac­com­pa­ny­ing our re­porter ex­plained that this was a method of sub­terfuge to trick lo­cal agri­cul­ture depart­ment au­di­tors.

Chen de­scribed these as “per­pet­ual mush­rooms,” adding: “when you see those mush­room cov­er­ings you know it’s a de­cep­tive farm­ing op­er­a­tion.”

Sev­eral large fa­cil­i­ties sus­pi­ciously ap­pear­ing to be fake farm­ers and real energy grow­ers are owned by Light Master, a com­pany lo­cated in the Taipei sub­urb of Xinzhuang.

‘No one was grow­ing any­thing’

Light Master is the owner of Yun­lin County’s largest so­lar farm fa­cil­ity. Last year alone, Light Master put up 57 in­stal­la­tions with a com­bined power out­put of 20 MW, suf­fi­cient to pro­vide power for over 7,000 house­holds.

“In the be­gin­ning, no one was ac­tu­ally grow­ing any­thing,” ad­mits a Light Master busi­ness as­so­ciate. The ma­jor­ity of in­vestors in so­lar farms fig­ured early on that they would be lucky enough to avoid run­ning into trou­ble, but as the Coun­cil of Agri­cul­ture be­gan con­duct­ing strict in­spec­tions, busi­nesses were forced to farm for real. They started to im­merse them­selves in tech­niques for rais­ing crops that grow well in the shade and of­fer high eco­nomic value, in­clud­ing mush­rooms, lingzhi, black fun­gus, and shi­take mush­rooms, all of which are pop­u­lar.

Light Master Pres­i­dent Tsai Tsung-jung ( ) pointed out a photo and re­lated that it was a pic­ture of a fun­gus that ex­perts he hired took two years to de­velop. He said it sells for up to NT$1,000 for 600 grams. He also dis­plays wasabi ex­per­i­men­tally grown by a Huwei Univer­sity of Science and Tech­nol- ogy pro­fes­sor. In the fu­ture, these crops can be grown un­der­neath the more than 100 pens Tsai owns, grown in ro­ta­tion in the sum­mer and win­ter months with an ed­i­ble mem­ber of the fern fam­ily, guiniao.

“Now we are re­ally se­ri­ous about agri­cul­ture,” in­sists Tsai.

A grad­u­ate of Na­tional Chengkung Univer­sity with a de­gree in elec­tri­cal en­gi­neer­ing, Tsai’s core busi­ness is the pro­duc­tion of power sys­tems, mar­keted in Europe un­der the Power Master brand.

Other large Tai­wanese op­to­elec­tron­ics firms ac­tively in­vested in so­lar power in­clude LCY Tech­nol­ogy and Tatung — own­ers of nu­mer­ous agri­cul­tural pens and PV roofs in Ping­tung — Anji Tech­nol­ogy, Neo So­lar Power Corp. and Giga So­lar Ma­te­ri­als, which con­cen­trate on over­seas mar­kets. Like Light Master, these com­pa­nies’ core busi­ness is re­lated to so­lar power.

How­ever, it is a fi­nan­cial leas­ing firm, Chailease Fi­nance, which is grow­ing rapidly through the ac­qui­si­tion of so­lar power fa­cil­i­ties.

Since throw­ing its hat in the so­lar power ring just two years ago, Chailease ac­quired 71 elec­tric­ity fa­cil­i­ties with com­bined in­stalled ca­pac­ity of 22.5 MW last year from Neo So­lar, quickly be­com­ing one of Tai­wan’s top play­ers in elec­tric power gen­er­a­tion.

Chailease even an­nounced that it planned to reach an in­stalled ca­pac­ity of over 150 MW worth over NT$10 bil­lion within the next two to three years through a com­bi­na­tion of newly built and ac­quired fa­cil­i­ties.

With no short­age of bid­ders, the Bureau of Energy’s listed prices for so­lar energy have dropped pre­cip­i­tously ev­ery year of late, the latest price hav­ing dropped to NT$5.0 per kwh. Com­pared to two years ago, when it was NT$8 per kwh, these busi­nesses’ prof­itabil­ity has be­come in­creas­ingly lim­ited.

Shin­Ing Energy CEO Lewis Hsu ( ), a cor­po­rate lawyer by trade, be­lieves that hav­ing reached the price slash­ing stage, big fi­nan­cial cor­po­ra­tions like Chailease are well po­si­tioned, “due to bet­ter ac­cess to cap­i­tal than other com­pa­nies,” he con­tends.

A num­ber of busi­nesses be­lieve that Chailease could end up as the Tai­wan mar­ket’s “fi­nal win­ner.” Mean­while, other com­pa­nies are head­ing to Ja­pan and points around South­east Asia to bid for so­lar energy fa­cil­i­ties in a “pho­to­voltaic Asia Cup” of sorts.

From energy, to in­dus­try and the en­vi­ron­ment, “elec­tric­ity farm­ing” is re­shap­ing Tai­wan in many ways. Trans­lated from the Chi­nese by David Toman Ad­di­tional read­ing se­lec­tions can be found at http://english.cw.com. tw

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