Renewable Energy in Taiwan

 What Is Renewable Energy

Renewable energy refers to energy that is generated from natural resources that are replenished naturally and sustainably over a short period of time. These resources include sunlight, wind, rain, tides, and geothermal heat. Renewable energy is considered as a clean and sustainable alternative to traditional sources of energy such as coal, oil, and natural gas which are finite and have a negative impact on the environment. 

Renewable energy technologies such as solar panels, wind turbines, hydroelectric dams, and geothermal plants are becoming increasingly popular as they are often more cost-effective and environmentally friendly compared to traditional energy sources. They do not emit harmful pollutants or greenhouse gases and do not contribute to climate change. Therefore, renewable energy is seen as an important tool in the transition towards a more sustainable and resilient energy system.

There are several types of renewable energy sources that are available, including:

i. Solar energy

This refers to energy that is harnessed from the sun through the use of solar panels or photovoltaic cells.

ii. Wind energy

This is energy that is generated from the kinetic energy of wind turbines.

iii. Hydroelectric energy

This is energy that is generated from the potential energy of falling or flowing water through hydroelectric dams.

iv. Geothermal energy

This refers to energy that is harnessed from the Earth's heat, typically through geothermal power plants or geothermal heat pumps.

v. Biomass energy

This is energy that is generated from organic matter, such as wood, crops, and waste.

vi. Tidal energy

This is energy that is generated from the kinetic energy of tidal currents.

All of these renewable energy sources have the potential to provide clean and sustainable energy, and their usage can help reduce greenhouse gas emissions and mitigate the impacts of climate change.

Nuclear Energy

Notice that, nuclear fusion and nuclear fission are not considered renewable energy sources in the same way as solar, wind, and hydroelectric power. Nuclear fission involves splitting heavy atomic nuclei to release energy. Although nuclear fission does not emit greenhouse gases during operation, it produces radioactive waste that remains hazardous for thousands of years. Furthermore, nuclear fuel is a finite resource and is not considered a renewable energy source. Nuclear fusion, on the other hand, involves combining light atomic nuclei to release energy. Nuclear fusion has the potential to provide a nearly limitless supply of clean energy, and it does not produce long-lasting radioactive waste. However, nuclear fusion technology is still in development, and commercial reactors have not yet been built. Therefore, while nuclear energy (both fission and fusion) can be a low-carbon source of energy, it is not generally considered a renewable energy source.

Nuclear Fusion

Nuclear fusion is the process by which the sun and other stars generate energy. In the sun's core, hydrogen nuclei combine to form helium in a series of fusion reactions, releasing vast amounts of energy in the process. Nuclear fusion has the potential to provide a nearly limitless supply of clean energy, as it uses light atomic nuclei such as hydrogen and helium that are abundant on Earth. Unlike nuclear fission, which produces radioactive waste that remains hazardous for thousands of years, nuclear fusion produces only small amounts of short-lived radioactive isotopes.

However, achieving practical nuclear fusion on Earth has proven to be a significant technological challenge. Scientists are still working to develop and commercialize fusion reactors that can produce more energy than they consume and operate at a sustained level. If successful, nuclear fusion could be a game-changer for the world's energy system, providing a nearly limitless source of clean and sustainable energy.

Therefore, I choose solar energy and wind energy as my topic since solar energy is associate with the sun(nuclear fusion) and wind energy is associate with Taiwan(Of the world's top 20 offshore wind farms, 16 are in Taiwan Strait).

Solar Energy | Pros & Cons

i. Renewable

Solar energy is a renewable source of energy. The sun is an abundant source of energy, and its energy is constantly replenished. Unlike fossil fuels, which are finite and will eventually run out, solar energy is always available.

ii. Environmentally friendly

Solar energy is a clean and green source of energy that does not produce any harmful emissions or pollutants. It helps reduce our dependence on non-renewable sources of energy and contributes to a cleaner environment.

iii. Cost-effective

While the initial investment in solar panels may seem expensive, the long-term benefits of solar energy far outweigh the costs. Once you have installed solar panels, you can enjoy free electricity for years to come.

iv. Energy independence

Solar energy can help you become energy independent by generating your own electricity. This means you will not be dependent on the grid for your power needs and will have greater control over your energy costs.

v. Low maintenance

Solar panels require very little maintenance, making them a hassle-free investment. With proper installation, you can expect your solar panels to last for decades.

vi. Versatile

Solar energy can be used for a variety of applications, from powering homes and businesses to providing electricity in remote areas. It can also be used to heat water and power vehicles.

While solar energy has many benefits, it also has some drawbacks that should be considered:

i. Weather-dependent

Solar energy relies on the sun's radiation, which means it is weather-dependent. On cloudy or rainy days, solar panels may not generate as much energy as they would on a sunny day.

ii. High upfront costs

The initial cost of installing solar panels can be high, which may be a barrier for some people. However, the long-term savings on energy bills can make up for the initial cost over time.

iii. Land use

Large-scale solar installations can take up a significant amount of land, which may not be feasible in densely populated areas.

iv. Energy storage

Solar energy can be generated during the day, but energy storage is required to use it at night or during periods of low sunlight. This can add to the cost of the system.

v. Materials and manufacturing

The production of solar panels requires rare materials and can be energy-intensive, which may have environmental impacts.

vi. Aesthetics: Some people may not like the look of solar panels on their roofs or in their neighborhoods.

Overall, while solar energy has many benefits, it also has some drawbacks that should be considered before making an investment. Advances in technology and research are continually addressing these issues to make solar energy more accessible and efficient for everyone.

Wind Energy | Pros & Cons

Wind energy is a renewable source of energy that is generated by wind turbines. Here are some benefits of wind energy:

i. Clean and renewable

Wind energy is a clean and green source of energy that does not produce any harmful emissions or pollutants. It helps reduce our dependence on non-renewable sources of energy and contributes to a cleaner environment.

ii. Cost-effective

Wind energy can be a cost-effective source of energy. While the upfront cost of building wind turbines can be significant, the long-term savings on energy bills can make up for the initial cost over time.

iii. Abundant

Wind energy is abundant in many parts of the world, and its availability is not affected by weather or environmental conditions.

iv. Job creation

Wind energy creates jobs in manufacturing, construction, and operations. It also supports local economies by providing a reliable source of energy.

v. Land use

Wind turbines can be built on land that is not suitable for agriculture or other uses. This means they can provide a source of income for farmers and landowners without affecting their primary activities.

vi. Energy independence

Wind energy can help communities become more energy independent by generating their own electricity. This means they will not be dependent on the grid for their power needs and will have greater control over their energy costs.

While wind energy has many benefits, it also has some drawbacks that should be considered:

i. Weather-dependent

Wind energy relies on wind speed and direction, which means it is weather-dependent. On calm or low-wind days, wind turbines may not generate as much energy as they would on windy days.

ii. Noise pollution

Wind turbines can produce low-frequency noise, which may be a concern for people living near them.

iii. Bird and bat fatalities

Wind turbines can pose a risk to birds and bats, particularly if they are located in migration routes or breeding areas.

iv. Land use

Wind turbines can take up a significant amount of land, which may not be feasible in densely populated areas.

v. Upfront costs

The upfront cost of installing wind turbines can be high, which may be a barrier for some people. However, the long-term savings on energy bills can make up for the initial cost over time.

Overall, while wind energy has many benefits, it also has some drawbacks that should be considered before making an investment. Advances in technology and research are continually addressing these issues to make wind energy more accessible and efficient for everyone.

Wind & Solar Energy in Taiwan
Both wind and solar energy have great potential in Taiwan, as the country has abundant wind and solar resources. However, the specific mix of renewable energy sources that would be best for Taiwan depends on a number of factors, including the local climate, topography, and energy demand. Taiwan is an island nation that is frequently hit by typhoons and other extreme weather events, which means that wind energy can play a significant role in the country's energy mix. The offshore wind energy potential in Taiwan is particularly high, with strong and consistent winds blowing along the western coast. The government has set a target of reaching 15 GW of installed offshore wind capacity by 2035, which would make Taiwan a leader in the global offshore wind market.

At the same time, solar energy has great potential in Taiwan, with high levels of solar irradiation throughout the country. Rooftop solar panels can be installed on homes and businesses to generate clean energy, and large-scale solar projects can be developed in open areas such as farmland or industrial zones. I believe a mix of wind and solar energy would likely be the best option for Taiwan, as it would provide a reliable and diverse source of renewable energy. This would help the country reduce its dependence on fossil fuels and contribute to a cleaner and more sustainable future.

The WWF Energy Report: by 2050, we could get all the energy we need from renewable sources

The statement that "by 2050, we could get all the energy we need from renewable sources" is a bold and ambitious goal that is certainly achievable with the right policies and investments in renewable energy. Renewable energy technologies such as solar, wind, and geothermal are becoming increasingly cost-competitive with fossil fuels, and their deployment is accelerating around the world. In many cases, renewable energy is already cheaper than fossil fuels, and this trend is expected to continue as technology improves and economies of scale are achieved. However, achieving a 100% renewable energy system will require significant changes to our energy infrastructure and systems, as well as strong political leadership and public support. It will also require significant investment in energy storage technologies to address the intermittency of renewable energy sources.

Despite these challenges, the transition to a 100% renewable energy system is not only technically feasible but also necessary to address the urgent challenge of climate change. The WWF Energy Report highlights the enormous potential of renewable energy to provide clean, affordable, and reliable energy to all people while reducing greenhouse gas emissions and creating new jobs and economic opportunities. Overall, while achieving 100% renewable energy by 2050 will require significant effort and investment, it is an achievable goal that will bring enormous benefits to society and the planet.

Reference

Annabelle Shu, T. A. H. (2022, August 5). Taiwan has abundant offshore wind resources, says vice president. Retrieved May 5, 2023, from https://www.digitimes.com/news/a20220804PD200/offshore-wind-farm-taiwan.html 

Guardian News and Media. (2022, August 10). How Taiwan is powering a brighter tomorrow with wind energy. The Guardian. Retrieved May 5, 2023, from https://www.theguardian.com/power-of-green/2022/aug/10/taiwan-wind-power-renewable-energy-transition 

United Nations. (n.d.). What is renewable energy? Retrieved May 5, 2023, from https://www.un.org/en/climatechange/what-is-renewable-energy 

What is nuclear energy (and why is it considered a clean energy)? What is nuclear energy? | Why is nuclear a clean energy? | National Grid Group. (n.d.). Retrieved May 5, 2023, from https://www.nationalgrid.com/stories/energy-explained/what-nuclear-energy-and-why-it-considered-clean-energy#:~:text=Nuclear%20fuels%2C%20such%20as%20the,be%20found%20in%20certain%20locations. 

The research "A GROWING CONCERN: How is rising inflation impacting retirement savings?" addresses the recent increase in inflation rates in Canada and its impact on retirement savings.

 Introduction

Due to the recent collapse of the US banks and the rising concerns about a potential crisis, I decided to find a related research for similar issues. The research "A GROWING CONCERN: How is rising inflation impacting retirement savings?" addresses the recent increase in inflation rates in Canada and its impact on retirement savings. The consumer price index in December 2022 was up 6.3% year over year, down from a 6.8% increase in November and a 6.9% rise in October. The paper discusses how inflation can affect defined benefit plan sponsors in two ways, and how de-risking conversations have increased among pension plan sponsors, causing many to consider moving toward a plan windup. The paper also analyzes the impact of the federal government's November announcement that it would cancel real return bond auctions and how it has affected Canadian DB plan sponsors' ability to hedge against inflation. Finally, the paper discusses strategies that DB plan sponsors can adopt to minimize risk and achieve higher yields, such as diversification into private debt and alternative credit strategies.

The Research Design & Data Collection

The research paper explores how inflation and market volatility are affecting pension plan sponsors and members in Canada. The research design is not explicitly stated, but the data collection method is primarily through secondary sources. The article references data from Statistics Canada and Aon's latest pension risk tracker, along with surveys by MetLife Inc. and WTW's latest group annuity purchase index. The paper also includes comments from several experts and pension plan sponsors who discuss their experiences with rising inflation and how it is impacting their decision-making processes, asset mix, and de-risking strategies.

The Statistical Analyses

The research discusses the impact of rising inflation and market volatility on retirement savings plans. The research discusses the impact of inflation on defined benefit plan sponsors and members, including how rising interest rates have driven down the cost of liabilities, how pension plans with automatic cost-of-living increases are seeing real returns take a hit, and how actuaries may be building the possibility of a prolonged period of higher inflation into their assumptions. It also notes that Canadian DB plan sponsors ended 2022 in a strong financial position, with the aggregate funded ratio for DB plans increasing from 96.9% to 100.8% over the course of the year, with rising interest rates offsetting a 15.6% drop in pension assets. It also discusses de-risking and plan windup conversations, with many DB plan sponsors considering de-risking or moving towards a plan windup due to strong financial positions. In addition, the research notes that for DB plan sponsors not looking to wind up, it is a good time to diversify into private debt and alternative credit strategies. Finally, the research describes the federal government's decision to cancel real return bond auctions, which took away part of an already narrow market and complicated what historically has been a core allocation to any portfolio with inflation sensitivity.

The Key Findings

How rising inflation impacts retirement savings is likely to include several key findings. Firstly, it may mention that inflation hit a near 40-year high in the past year, but that it started to cool down in late 2022, following interest rate hikes by the Bank of Canada. Additionally, it may highlight that pension plan sponsors and members are facing the dual headwinds of rising inflation and market volatility, which are affecting both equity and fixed income. Furthermore, the section may point out that inflation can impact defined benefit plan sponsors in two ways, and that pension plans without automatic cost-of-living increases can benefit from rising interest rates driving down the cost of liabilities. On the other hand, plan sponsors that raise pension payouts alongside inflation are seeing their real returns take a hit. The results section may also report that several major pension funds announced significant cost-of-living increases for retirees, and that the strong financial positions of many defined benefit plan sponsors have prompted them to consider de-risking or moving towards a plan windup. Finally, the results section may mention that it is a good time for defined benefit plan sponsors not looking to wind up to diversify into private debt and alternative credit strategies such as emerging market debt, securitized debt, and asset-backed securities, among other key findings.

Conclusion

The impact of rising inflation on retirement savings plans in Canada has been significant. Defined benefit plan sponsors have had to deal with rising inflation and market volatility, while pension payouts alongside inflation are seeing their real returns take a hit. While pension plans without automatic cost-of-living increases can benefit from rising interest rates driving down the cost of liabilities, actuaries at average-earnings DB plans may have to begin taking into account the expectations of higher salaries for plan members over time. However, according to Aon's latest pension risk tracker, Canadian DB plan sponsors ended 2022 in a strong financial position. Strong financial positions have prompted many DB plan sponsors to consider de-risking or even move towards a plan windup. It's a good time for plan sponsors not looking to wind up to diversify into private debt and alternative credit strategies. Overall, the current situation is a reminder of the importance of careful planning, diversification, and risk management in retirement savings.

Reference

Rolfe, K. (2023). A GROWING CONCERN: How is rising inflation impacting retirement savings? Benefits Canada, 48(2), 12+. https://link.gale.com/apps/doc/A744045962/AONE?u=lirn17237&sid=bookmark-AONE&xid=295b2acb