Why Taiwan doesn’t need another new coal power plant
If we want a real transition…
Read in Other Languages: 中文/Deutsch
A news shocked the Taiwanese environmentalists on 14 March and spread all over the nation’s media the next day: an environment impact variation analysis report on the Shenao coal power plant project was approved by environment protection administration (EPA).
Many have pointed out that this is an example of the loophole in the current environmental impact assessment (EIA) system. Taipower had already gained an EIA approval to build a coal power plant at Shenao in 2006. Due to local oppositions, the project was halted shortly after began in 2010. But when Taipower was planning a smaller coal power plant project at a nearby location in 2016, the utility declared it to be a modification of the previous one; by doing so, Taipower avoided the risk of being denied an EIA approval since it already has one. The only thing EPA could do then was an environment impact variation analysis assessment, a comparison between the original and current design. Since the new project is smaller and uses newer and more efficient technology, it was difficult for EPA to find a proper reason to object the “modification” of the project (Note: we must point out here that this interpretation of the law is not consent and many people actually think that EPA have the authority to request a formal EIA).
Luckily, the municipal governments nearby are all opposed to this project. Under the current energy governance structure, municipal governments are responsible for allocating the coal allowance to utilities and factories within their borders. This means that in theory, New Taipei city can deny the allowance of Shenao power plant, making it a coal power plant that burns no coal. The municipal government has announced to do just that after the approval was given.
Meanwhile, an urgent task of environmental networks in Taiwan right now is to reason why the coal power plant is actually not necessary and may even be harmful for the electricity grid in the future, which was what an article released recently was about. This will be part of the public discussion that may possibly force the state-owned utility to voluntarily give up the project in the end.
The main reasons against a coal power plant are flexibility, economy and environment burdens it will cause to the future grid. These are factors that will interact with each other, and they will further undermine the legitimacy of coal as a source for electricity in the future.
The most important thing about Shenao power plant is that it could only be finished no earlier than 2025. By then, Taiwan will already have 20 GW of solar, 6.7 GW of wind, and 5.5 GW of fully dispatchable renewable energy sources (hydro, biogas, and geothermal) on the grid. The graph below is what the power output of variable renewables (VRE, which are solar and wind) and residual load can look like in summer by then.
As one can see, solar and wind can easily provide up to 50 percent of the load demand at a summer noon. In winter and early spring, when wind is strong and load demand is lower, the coverage of VRE will be even higher. Negative residual load might probably occur during early spring somewhere between 2025 and 2030.
Since curtailment and storage are still two cost intensive methods, the best way to integrate as much renewable sources as possible is to enhance the flexibility of the power system. Coal power plants are not that flexible in this context, and they have never been operated in such manner in Taiwan before. They can be schemed or retrofitted to becoming more flexible, but they will still be less flexible than other sources such as hydro, biogas, geothermal, or conventional gas.
The flexibility issue actually leads to the economy issue. Even if Taipower managed to build a state-of-art hard coal power plant almost as flexible as a gas power plant, the load-following behavior will still heavily damage the economics of such a project. Comparing to gas, coal has a higher proportion of upfront costs and lower proportion of fuel costs during its life cycle. This is why they were run around the clock historically; but if a coal power plant has to response to the residual load variations and thus decrease its annual electricity output, its levelized cost of electricity (LCoE) will increase more dramatically.
So a power system with too much coal will increase VRE curtailment, the storage demand, and its own LCoE, all of which contribute to a higher system cost. This leads to final and the most important insight of this coal power plant project: to balance the additional costs, a coal power plant built in the future will have to have a longer operational lifespan. This will further constrain renewable integration onto the grid, and will threaten the national climate mitigation goals.
The only reason why such power plant might be built is to meet the annual peak residual load demand. But even without Shenao, the existing conventional fleet and the planned gas power plant projects will be sufficient to cover the peak residual load demand with a reserve margin of about 15% in the worst case. Building it would just increase the figure to 16.3%. It would be more reasonable to have something more flexible to cover the demand gap of a few hours every year.
It is therefore without doubt that no new coal power plants should be approved in Taiwan. Perhaps an issue we should now also tackle is the myth that only sufficient inflexible conventional power plants can provide sufficient stability to the grid. Otherwise, the message Taipower has always been selling to the public, that Shenao is a necessary replacement for the to-be-decommissioned nuclear power plants, would continue to mislead the discussion on energy transition into a “either nuclear or coal” paradigm, something Energiewende skeptics have long been talking about but is simply false. In reality, “neither nuclear nor coal” is the only way to a genuine transition.
