Keywords

1 Introduction: The Paris Agreement Revealed Trends of Energy Transition

The historic Paris Agreement was finally adopted at the end of 2015, thanks to the joint efforts of the United States, China, and France. The Paris Agreement will replace the 1997 Kyoto Protocol as the legal instrument for addressing global climate change. The Paris Agreement is a typical product of international political compromise on climate change, which declares that the issue of climate change is no longer just a scientific warning, but has become a political reality that governs the global environmental regime.

One of the important consequences of the Paris Agreement is that it is the first global agreement that requires both industrialized and developing countries to reduce their greenhouse gas emissions. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels by the end of this century (UNFCCC, 2015). In addition, each country is required to conduct a review and propose new carbon reduction commitments every 5 years to accelerate the pace of carbon reduction.

Notably, there is a key message implied by the Paris Agreement: in order to achieve the greenhouse gas reduction target, the current energy structure with high carbon emissions must be fundamentally restructured. Energy transition has become the most important keyword of the Paris Climate Conference and a key issue in global climate governance. Energy transition aims to change the energy production and supply model, which is dominated by nuclear energy and fossil fuels such as coal and shale gas, and to reduce the reliance on fossil fuels by increasing the proportion of renewable energy, enhancing energy conservation, improving energy efficiency, and adjusting the industrial structure.

However, energy transition involves the reconfiguration of the energy production, transportation, and distribution system, which should not be purely a technical issue. Instead, energy production and policy directions should be considered within the framework of the local social structure and ecological environment. Given that fossil fuels and nuclear power are controversial energy sources, only through the practice of energy democracy can we bring about economic and social transformation through energy transition. In this way, our goal of developing a clean energy supply and energy democratization can be achieved on the basis of energy justice (Lin, 2016).

2 Implication of Energy Democracy

The concept of “energy democracy” that underlies this chapter was first conceived during the Climate Justice Movement and is based on the fundamental reflections of democratic politics, which emphasizes that the public affected by decisions should have the right to participate in collective decision-making (Kunze & Becker, 2014). By definition, energy democracy means “ensuring that everyone has access to sufficient energy. However, the energy must be produced in such a way that it neither harms nor endangers the environment or people. Concretely, this means leaving fossil fuels in the ground, socializing and democratizing the means of production, and changing our attitude towards energy consumption.” (Camp for Climate Action in Lausitz, 2012). This discussion highlights that the process of energy transition should be democratic in practice, incorporating the concerns and interests of all parties from the beginning stage of energy transition, in an attempt to achieve a state of “common good.”

Kunze and Becker (2014) break down the concept of energy democracy from the perspectives of democratization, ownership, surplus-value production, and ecology. First, the process of energy transition focuses on the right to broader public participation. This direct democracy initiative emphasizes not only political participation opportunities and procedures, but also democratic practices from the economic aspect. Unlike traditional fossil fuel energy systems, which are often dominated by top-down authoritarian governance, the decentralized nature of renewable energy technologies requires the practical impetus of energy democracy to support their operation. The selection of renewable energy sites and electricity price levels require the participation of consumers and local residents, as well as the consent of neighborhoods. The public or cooperative members can also share decision-making power to ensure that the interests and concerns of all stakeholders are taken into account. For example, in the face of energy poverty, the democratic model is more likely to account for income inequality by adopting an ability-to-pay pricing strategy such that basic energy needs are met.

Secondly, in terms of ownership, energy democracy emphasizes the shift from the production to the consumption side, from the individualistic, depoliticized, and privatized form of the past to the cooperative, political, and public form of control. However, this is not an attempt towards statism. Many public power utilities have had problems in the past, such as the conflict between the will of the local population and the privatization, distribution, and development of power supply. Moreover, energy production is not always in line with ecological benefits. In recent years, many innovative models have been developed in Western Europe and East Asia, attempting to overcome these shortcomings with new forms of ownership and operation, mostly in the form of energy cooperatives and public utilities (e.g., city power companies), and semi-public organizations.

Thirdly, the proximity of energy democracy and renewable energy is also generating positive impacts such as value creation and employment. It is pointed out that, compared with fossil fuel energy production, the free cost of renewable energy materials (e.g., solar energy, wind power) can reduce capital outflows. Accordingly, the surplus can be fed back to local public facilities or other industrial investments and facilitates local sustainable development. At the same time, the expansion of renewable energy will, directly and indirectly, promote related employment opportunities without imposing negative effects on the environment and ecology.

Finally, in questioning and reflecting on the traditional view of economic development, energy democracy criticizes capitalism's focus on profit maximization, which has created a growth model of mass production and encouraged mass consumption, resulting in a long history of rising negative effects on the environment, ecology, and social life. Energy democracy echoes the concept of a “post-growth society.” It advocates reflecting on the pace of growth, prioritizing ecology and the well-being of the people, and promoting the spirit of reducing pollution and consumption, as well as self-sufficiency. This concept further advocates care for environmental sustainability and energy transition, actively promoting renewable energy to replace highly polluting fossil fuels, and even using the surplus to support the development of ecological diversity and organic agriculture or to consider the coexistence of energy production processes and local ecological protection. At the same time, through public participation, local residents can organize and manage their own energy demand, which can lead to a self-sufficient electricity production mode and change the traditional mode of encouraging unlimited growth of energy use. Through the diffusion of energy democracy practice, our society can address the challenges of fossil fuel and nuclear energy use and deepen the goals of the energy transition.

3 Three Levels of Energy Democracy: From Central, Local to Community

As the above concepts suggest, the most important aspect of the energy democracy practice is the attention to decentralization and how to implement this model. As Sweeney argues, energy democracy creates fair and just energy that meets contemporary needs, which means that labor, community, and public input must be included in the decision-making process (Sweeney, 2012). From the perspective of energy democracy, this chapter argues that energy transition can be analyzed in terms of decentralization processes at three levels: central government, local self-government units, and communities (Lin, 2018).

At the central level, energy transition should be free from excessive entanglement of interests between political parties, politicians, and corporate consortia in the process of energy policy formulation. For example, in the energy transition decision-making process, multiple stakeholders should be included, and various voices should be valued as the basis for the final decision through a deliberation process. This policy design, which embodies energy democracy, allows energy policy to move away from a top-down government planning approach and instead provide momentum for government planning through the participation of private enterprises and citizens, making the transition process smoother.

At the local level, the energy system has been transformed from the previous centralized system to a decentralized one. A decentralized energy system avoids excessive energy consumption by replacing the mass-production mode of centralized power plants with decentralized and interconnected small-scale power generation units. In addition, to avoid large financial groups’ domination over large power plants and to stress the importance of renewable energy, local governments can also propose different incentive mechanisms to allow the public to participate in the energy transition. For example, in terms of energy utility property rights, local governments (e.g., provinces, counties, cities) could be entitled to use and control the power grid as a public utility, or establish a platform to coordinate conflicting interests and actively address the role of labor unions.

At the community level, energy transition is gradually taking place in the context of the global climate crisis. Although the backgrounds and operational practices of energy transformation may differ among communities or local residents, what can be seen in common are the diverse participation patterns of local residents, the active pursuit of energy autonomy, and the social innovation of collaborative efforts to echo the development direction of energy democracy. Specifically, community-based small-scale energy organizations, including energy cooperatives and publicly owned local energy companies, can be good examples.

The new wave of energy transition in Taiwan in recent years can also be examined at each of the three levels in terms of the implementation of energy democracy. It cannot be denied that alongside energy transition, Taiwan still faces different degrees of conflict and discomfort between the central government, local self-government units, various interest groups, local residents, environmental NGOs, and other stakeholders. Just like other countries, Taiwan’s energy transition is still a work in progress, which takes time to improve.

The following chapter focuses on the practical implications of energy democracy, and reviews the specific policies and practical highlights of energy transition in Taiwan in recent years at the central, local, and community levels, as well as identifies the current difficulties, challenges, and possible ways to address them.

4 Practice of Energy Democracy from Three Levels in Taiwan

4.1 Key Central Energy Transition Policies and Legislations

Although Taiwan is not a member of the Paris Agreement, it has voluntarily submitted its own commitment targets to the United Nations Secretariat, demonstrating to the world that it is actively working to reduce greenhouse gas emissions (Cheng, 2019). In 2009, under the former government of Ma Ying-jeou, a feed-in tariff (FIT) system was introduced to promote renewable energy through the amendment of the Energy Management Act and the enactment of the Renewable Energy Development Act. FIT is a system under which the government guarantees that electricity generated by power companies and other private facilities using only renewable energy sources will be purchased at the same price during a certain period of time. In 2015, the Greenhouse Gas Emissions Reduction and Management Act was passed, and in the same year, following the adoption of the Paris Agreement, the country began taking actions submitting to the United Nations its 2030 emissions target, which was to reduce emissions by about 20% from the 2005 levels.

President Tsai Ing-wen of the Democratic Progressive Party (DPP) has announced a “sustainable energy policy” that encompasses energy transformation, mainly through the elimination of nuclear power, improvement of power generation efficiency, and promotion of renewable energy, as well as energy conservation, power generation and storage, and other energy technology innovations. The President has also consistently emphasized the promotion of a nuclear power-free policy since taking office. Immediately after coming to power in 2016, the government declared that it would always participate in actions to address climate change under the provisions of the Paris Agreement, and its own measures are being considered at various levels, from central government to local governments (Tsai, 2016). The government also established the Office of Energy and Carbon Reduction (OECR) under the Executive Yuan to coordinate between related ministries and agencies, and revised the Electricity Act in January of the same year. This amendment to the law, which stipulates that all nuclear power plants must be shut down by 2025 (Article 95), is an attempt to eliminate nuclear power. Although the Article 95 amendment was abolished due to the result of the November 2018 referendum, the Tsai administration’s goal of denuclearization has not changed.

On the other hand, in accordance with the Energy Management Act, the government promulgated the Guidelines of Energy Development in 2017 and formulated the Energy Transition White Paper to set out specific policy goals and objectives. The Energy Transition White Paper was developed in a deliberative manner, creating a collaborative atmosphere between government, localities, and citizens through a citizen participation model. The main objective is to develop an action plan for building a non-nuclear country and achieving energy transition by 2025. The White Paper on Energy Transition was developed through a three-step community participation process, including the first stage “Preparation Meetings,” the second stage “Collaboration,” and the third stage “Citizen Dialogue.” The participants include experts from various fields such as industry, government, academia, research, and civil organizations, as well as the general public. After 3 years of deliberation, the White Paper on Energy Transition was released by the government in November 2020, which set out the key promotion plans for each area of energy transition (The Executive Yuan, 2020).

With regard to the elimination of nuclear power, at present, renewable energy sources account for a very small percentage of the total power generation, and thus cannot possibly provide sufficient power generation to replace nuclear power, forcing Taiwan to rely on fossil fuels. Therefore, Taiwan has been increasing the ratio of natural gas, a low-carbon fossil fuel with an electricity emission factor for carbon dioxide (kgCO2/kWh) about one half that of coal. In recent years, Japan and Germany, which have also made a commitment to phasing out nuclear power, have been switching to natural gas, but they are facing problems such as destruction of the ecological environment, trade balance, and security concerns. Taiwan is no exception to this trend, and is faced with the need to take effective measures.

On the other hand, the goal for renewable energy by 2025 is to increase the share of renewable energy in the country's power generation equipment from 9.5% in 2016 to 20%, while reducing the share of nuclear power to zero. In the most recent decade, we can see that nuclear power has actually been reduced and renewable energy has been increased (Fig. 1).

Fig. 1
figure 1

Change in the Ratio of each Power Generation to the Total Power Generation in Taiwan. Source: Data was retrieved from the Bureau of Energy, Ministry of Economic Affairs. Figure was compiled by the authors

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As for solar power, the Renewable Energy Development Act was amended in 2019 to set a very ambitious target of 20 GW of solar power by 2025. This 20 GW will consist of 3 GW of the rooftop type and 17 GW of the ground-mounted type (hereafter referred to as the “ground type”).

Under the Tsai administration, the solar power capacity targets that have been set out so far are gradually being met, with a total of 4.3 GW as of the end of 2019. However, due to land use problems, the target after 2020 has not yet been met, and we need to see future development to achieve the target of 20 GW by 2025.

As for offshore wind power generation, the first Taiwanese offshore wind farm, Formosa I, was completed in October 2019 and began commercial operation at the end of the same year in the waters about 2 to 6 km off Miaoli County in northwestern Taiwan. Offshore wind power is currently being developed with strong government backing, and a total of 5.5 GW of offshore wind power is planned to connect to the grid by 2025, of which 3.8 GW will be reviewed by the government for eligibility. The remaining 1.7 GW will qualify for development based on a bidding system. The government’s enthusiasm for offshore wind seems to be very high, as it has announced that it will increase its installed wind power capacity by another 10 GW over the next 10 years, from 2026 to 2035.

As we continue to vigorously promote renewable energy policies that have a good image, we must not forget that there are various risks involved in reality. In addition to the risk of trade deficits due to increased imports of natural gas, a substitute for coal, and the destabilization of energy supplies due to the dependence on resource imports, there are also concerns about the impact on the natural environment and ecosystems. Taiwan is going through a major debate over natural gas power generation and ecological environmental protection, resorting to a referendum on it in 2021. Also, the overexploitation of forest and agricultural land for the purpose of developing ground-type solar power generation, and the negative impact of water-based solar power generation facilities installed in reservoirs on aquaculture and fisheries have been pointed out. Furthermore, offshore wind turbines are no exception to this rule, and are strongly opposed by environmental groups because of the noise generated during construction and operation, and the loss of habitats for marine life (e.g., bottlenose dolphins) due to frequent shipping traffic.

4.2 Local Governments and Supply-Chain Build-Up

Various local governments have welcomed the current energy conversion policy, expecting it to have a ripple effect on local development and create jobs (Cheng, 2020a). New Taipei City and Taoyuan City, for example, have made energy transition and climate change a high policy priority, and have developed region-specific programs to save electricity, conserve energy, and deal with flooding and torrential rains. However, there are challenges, namely concerns about the impact on the ecological environment and existing stakeholders, and governance. For the latter, a permanent full-time organization, recurring budget, and full-time staff are essential, and in recent years, each city has been implementing organizational reforms such as the establishment of specialized departments.

New Taipei City, which has the largest resident population, established a new department called the Green Industry Division under the city’s Economic Development Bureau in 2014, and has been trying new initiatives involving NGOs, civic groups, and industries. For example, since 2015, the city has been promoting an annual “Energy Conservation Award,” aiming to educate citizens and raise awareness in a competitive manner.

In addition, in 2018, Taoyuan City established a dedicated organization, the Green Energy Promotion Office, which is taking advantage of its strength as Taiwan’s largest industrial city to promote electricity and energy conservation in large-scale factories, develop megawatt solar power generation including floating solar power generation, and introduce rooftop solar power generation. These efforts require the cooperation not only of the factories, office buildings, and commercial facilities where the panels will be installed, but also of various organizations such as certification bodies and electric power companies, and the local government needs to act as a coordinator to facilitate coordination among the various stakeholders.

On the other hand, the industrial world is positively viewing the energy transition as a business opportunity. Thanks to policy backing, solar and wind power have made remarkable progress in recent years, and by 2019 the installed capacity of these renewable energies will be about 13 times that of 10 years ago, accounting for 8.9% of the total (Fig. 2). In particular, ground-type and rooftop-type solar power generations are being heavily promoted. In addition, the Taiwan Strait has one of the world’s highest offshore wind power generation potentials, and it is estimated that the scale of investment in offshore wind power alone will reach 900 billion Taiwan dollars (about 30 billion US dollars) by 2025.

Fig. 2
figure 2

Renewable Energy Power Generation Capacity (2008–2018). Source: Data was retrieved from the Bureau of Energy, Ministry of Economic Affairs. Figure was compiled by the authors

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However, the investment in offshore wind power shows that foreign companies, including those from Denmark and Canada, are expanding their investments, highlighting the reliance on foreign experience and technology. This issue has been attracting attention within the Taiwanese government, and the “domestic industrial effect” of wind power, which requires that construction projects be ordered from domestic suppliers and that components be procured domestically for the development, has become a necessary condition for the government’s selection process (Cheng, 2020b). While domestic demand is expected to grow in the future, we cannot deny the concern that this domestic industrial effect will create new tensions between the government and domestic and foreign companies.

4.3 Community Practices: Energy Cooperatives, Business Innovation, and Green Energy for the Common Good Model

In recent years, Taiwan has been promoting an energy cooperative, which is a typical example of energy democracy in action. An energy cooperative is a power plant that is built and operated by the local government and community, which take the lead in investing resources, including people and money, and acquire a certain level of ownership. In Japan, it is also called “community power,” but this “power” does not only refer to electricity, but also possibly to the “power” of the people, in the sense that they aim to become independent in their energy consumption by relying on local natural resources instead of relying on electricity generated by the mass production and mass consumption of fossil fuels.

The term “energy cooperative” encompasses a wide range of stakeholders (e.g., solar power system builders, developers such as associations and NGOs, residents and communities, local governments, banks, and lenders, etc.) and business models (Chou et al., 2019). In this chapter, three cases are discussed. The first is the Green Advocated Energy Cooperative, which was established by the NGO Homemakers Union Consumers Co-op (similar to Japan’s consumer cooperatives) and the Homemakers Union Foundation (Cheng, 2020c). The Green Advocated Energy Cooperative is developing an electricity sales business using the rooftop space of its members’ homes. All you need to do to provide a rooftop space is to become a member of the Cooperative with an initial investment of 10,000 Taiwan dollars (approximately US$ 350) per unit and up to 100 units (Chen & Huang, 2018). Once the use of the rooftop space is decided, the Cooperative will receive revenue from the sale of electricity for 20 years, handling the contract with the power generation company and all administrative procedures with the local government and the national Taiwan Electric Power Company, which owns the power transmission and distribution network. On the other hand, the residents who provide the rooftop space earn rental income from the Cooperative, but there are other benefits such as lowering the temperature of the building by installing solar panels and preventing the deterioration of the rooftop due to direct sunlight.

The Homemakers Union Consumers Co-op and the Cooperative are popular because they directly interact with the residents and owners who provide the rooftop space, and the residents’ awareness of environmental protection and renewable energy is further enhanced through their own power generation experience. However, the number of residents who are willing to actively contribute to the environment is limited, and the scale of the project (power generation) is not large.

The second, in contrast, is the “Sunny Founder,” which encourages the general public to participate in renewable energy generation projects. Sunny Founder has created a new business model, providing a platform where ordinary citizens can purchase solar panels for as little as 15,000 yuan (approximately US$535) each (Sunny Founder, 2020). If funds are raised, they can rent rooftop space from landlords to generate electricity and earn profits, from which they can pay rent for the space and give back to investors. In addition, donations are accepted to help companies promote their social responsibility (CSR).

The business has received a widespread response due to the ease of participation and profit collection, and in less than five years since its launch in 2016, it has accumulated nearly 250 operation cases. According to the official website, as of January 2021, the transaction amount has exceeded 510 million Taiwan dollars (about 1.9 billion yen) and the number of participants has reached more than 20,000. Therefore, it has been widely covered in the media as a success story and is expected to grow in the future. Nevertheless, since the investors do not have to be the owners of the solar panel installation sites, it remains to be seen whether Sunny Founder will be able to raise people’s environmental and energy awareness at the community level and deepen their attachment to the region.

In addition to the two models of citizen power plants mentioned above, the “energy welfare” perspective, which aims to ameliorate energy poverty, has been gaining attention in recent years. For example, the One Less Nuclear Power Plant (OLNPP) project in Seoul, Korea in 2012 emphasized the basic right of citizens to use energy and listed alleviating energy poverty as one of the policy objectives. In Taiwan, GRINNODOT, a company established in 2015 to protect the energy disadvantaged, has proposed an innovative approach of energy public interest based on the social enterprise model. Their plan is to combine corporate and general public donations to raise funds for building solar power systems for disadvantaged groups (e.g., nursing homes, childcare centers, social welfare organizations, etc.), and to provide them with amplified and stable assistance for up to 20 years through a renewable energy power purchase system. At the same time, during system construction and subsequent maintenance, GRINNODOT will also enhance local employment opportunities, introduce energy and environmental education practices, and derive more value from Green Empowerment (Lin, 2016).

Importantly, the Green Empowerment model can produce mutual benefits in four ways. First, the donor companies/individuals will not only save on tax, but also have their resources amplified to 1.6 to 1.8 times through the solar energy sales mechanism; second, the doner will receive stable assistance that is amplified and lasts for 20 years (via a renewable energy billing contract); moreover, on the environmental side, the installation of renewable energy systems can help expand the carbon reduction benefits of green energy and mitigate greenhouse gas emissions; finally, the green energy industry itself can be accompanied by applied markets. Lastly, the green energy industry itself can grow steadily with the market. In conclusion, GRINNODOT not only provides an alternative channel for solar power development, but also strengthens the collaboration between the private and corporate sectors and creates a green energy sharing economy, which can be considered as an innovative business model with a focus on energy welfare.

5 Conclusion

The purpose of energy democracy is to ensure that the public has access to sufficient energy, to solve the problem of energy poverty, to emphasize the potential harm of energy production to the environment, ecology, and human beings, and to change public attitudes toward energy consumption.

The significance of the energy transition is not only the change from fossil fuels to renewable energy, but also the shift of the energy system’s ownership from the private sector to a collective, public, or democratic control. The decentralization of renewable energy resources and production methods in communities provides the basis for energy democratization and decentralized resource development.

In this chapter, the development and practical experience of energy transformation in Taiwan is analyzed at three levels from the perspective of energy democracy. To summarize, Taiwan has been refraining from fossil fuels and nuclear power and actively developing renewable energy and natural gas in recent years. This practice involves not only the adjustment of energy types, but also the transformation of industrial structure, the legal system, lifestyle, and even the change of exemplary values. At the central, local, and community levels, it is observed that various actors are attempting to achieve decentralized goals and practices, including reforms in the way the central government makes energy policy decisions, local governments taking the initiative to propose energy transformation goals and governance practices, and innovative energy development models for communities and local residents.

In particular, Taiwan has invested a significant amount of money and effort in the construction of renewable energy systems from the central government, local governments, and even the private sector. In addition to joining in the global trend of decarbonization, Taiwan has focused on replacing fossil fuels with renewable energy sources such as solar and wind power and has also promoted a sustainable energy economy based on local, community, and even residents, with a more equitable distribution of wealth and power. Such a renewable energy model offers a more ecologically friendly, community-economic, and local job-creating alternative to current energy sources.

However, as discussed in this chapter, there are still many human and ecological issues and bottlenecks in the energy transition. More models and approaches need to be developed to incorporate the views of various stakeholders and to enhance communication and understanding between them. Particularly, the signing of the Paris Agreement mirrors a global revolution centered on low-carbon development in the face of the climate crisis and energy security challenges; meanwhile, energy must be seen as a public good and a basic right. The energy transition should be a comprehensive review of energy production, consumption, distribution patterns, and energy values. Constructing a political framework for a green energy transition, creating legal norms, social and ecological checks, financial incentives, and infrastructure that is conducive to a decentralized energy structure will be the key challenges in implementing a democratic energy system.