Preparing Taiwan for a decarbonized economy

The MIT Energy Initiative and a consortium of Taiwanese companies are exploring how Taiwan can secure its energy future as the world transitions away from fossil fuels.

Calvin Hennick MITEI

The operations of Taiwan’s electronics, manufacturing, and financial firms vary widely, but their leaders all have at least one thing in common: They recognize the role that a changing energy landscape will play in their future success, and they’re actively planning for that transition.

“They’re all interested in how Taiwan can supply energy for its economy going forward—energy that meets global goals for decarbonization,” says Robert C. Armstrong, the Chevron Professor of Chemical Engineering, emeritus, at MIT, as well as a principal investigator for the TIGER program. “Each company is going to have its own particular needs. For example, financial companies have data centers that need energy 24/7, with no interruptions. But the need for a robust, reliable, resilient energy system is shared among all of them.”

Ten Taiwanese companies are participating in Taiwan’s Innovative Green Economy Roadmap (TIGER), a two-year program with the MIT Energy Initiative (MITEI) to explore various ways that industry and government can promote and adopt technologies, practices, and policies that will keep Taiwan competitive amid a quickly changing energy landscape. MIT research teams are exploring a set of six topics during the first year of the program, with plans to tackle a second set of topics during the second year, eventually leading to a roadmap to green energy security for Taiwan.

“We are helping them to understand green energy technologies, we are helping them to understand how policies around the world might affect supply chains, and we are helping them to understand different pathways for their domestic policies,” says Sergey Paltsev, a principal investigator for the TIGER program, as well as a deputy director of the MIT Joint Program on the Science and Policy of Global Change and a senior research scientist at MITEI. “We are looking at how Taiwan will be affected in terms of the cost of doing business and how to preserve the competitive advantage of its export-oriented industries.”

“The biggest question,” Paltsev adds, “is how Taiwanese companies can decarbonize their energy in a sustainable manner.”

Why Taiwan?

Paul Hsu, founding partner of the Taiwanese business consultancy Paul Hsu & Partners (one of the ten participating TIGER companies), as well as founding chairman and current board member of the Epoch Foundation, has been working for more than 30 years to forge collaborations between business leaders in Taiwan and MIT researchers. The energy challenges facing Taiwanese businesses, as well as their place in the global supply chain, make the TIGER program critical not only to improve environmental sustainability, but also to ensure future competitiveness, he says.

“The energy field is facing revolution,” Hsu says. “Taiwanese companies are not operating in Taiwan alone, but also operating worldwide, and we are affected by the global supply chain. We need to diversify our businesses and our energy resources, and the first thing we’re looking for in this partnership is education—an understanding about how to orient Taiwanese industry toward the future of energy.”

Wendy Duan, the program director of the Asia Pacific program at MITEI, notes that Taiwan has a number of similarities to countries such as Singapore and Japan. The lessons learned through the TIGER program, she says, will likely be applicable—at least on some level—to other markets throughout Asia, and even around the world.

“Taiwan is very much dependent on imported energy,” Duan notes. “Many countries in East Asia are facing similar challenges, and if Taiwan has a good roadmap for the future of energy, it can be a good role model.”

“Taiwan is a great place for this sort of collaboration,” Armstrong says. “Their industry is very innovative, and it’s a place where businesses are willing to implement new, important ideas. At the same time, their economy is highly dependent on trade, and they import a lot of fossil fuels today. To compete in a decarbonized global economy, they’re going to have to find alternatives to that. If you can develop a path from today’s economy in Taiwan, to a future manufacturing economy that is decarbonized, then that gives you a lot of interesting tools you could bring to bear in other economies.”

Uncovering solutions

Stakeholders from MIT and the participating companies meet for monthly webinars and bi-annual in-person workshops (alternating between Cambridge, Massachusetts, and Taipei) to discuss progress. The research addresses options for Taiwan to increase its supply of green energy, methods for storing and distributing that energy more efficiently, policy levers for implementing these changes, and Taiwan’s place in the global energy economy.

“The project on the electric grid, the project on storage, and the project on hydrogen—all three of those are related to the issue of how to decarbonize power generation and delivery,” notes Paltsev. “But we also need to understand how things in other parts of the world are going to affect demand for the products that are produced in Taiwan. If there is a huge change in demand for certain products due to decarbonization, Taiwanese companies are going to feel it. Therefore, the companies want to understand where the demand is going to be coming from, and how to adjust their business strategies.”

One of the research projects is looking closely at advanced nuclear power. There are significant political roadblocks standing in the way, but business leaders are intrigued by the prospect of nuclear energy in Taiwan where available land for wind and solar power generation is sparse.

“So far, Taiwan government policy is anti-nuclear,” Hsu says. “The current ruling party is against it. They are still thinking about what happened in the 1960s and 1970s, and they think nuclear is very dangerous. But if you look into it, nuclear generation technology has really improved.”

Implementing a green economy roadmap

TIGER participants’ interest in green energy solutions is, of course, not merely academic. Ultimately, the success of the program will be determined not only by the insights from the research produced over these two years, but by how these findings constructively inform both the private and public sectors.

“MIT and TIGER participants are united in their commitment to advancing regional industrial and economic development, while championing decarbonization and sustainability efforts in Taiwan,” Duan says. “MIT researchers are informed by insights and domain expertise contributed by TIGER participants, believing that their collaborative efforts can help other nations facing similar geo-economic challenges.”

“We are helping the companies understand how to stay leaders in this changing world,” says Paltsev. “We want to make sure that we are not painting an unrealistically rosy picture, or conveying that it will be easy to decarbonize. On the contrary, we want to stay realistic and try to show them both where they can make advances and where we see challenges.”

The goal, Armstrong says, is not energy independence for Taiwan, but rather energy security. “Energy security requires diversity of supply,” he says. “So, you have a diverse set of suppliers, who are trusted trading partners, but it doesn’t mean you’re on your own. That’s the goal for Taiwan.”

What will that mean, more specifically? Well, that’s what TIGER researchers aim to learn. “It probably means a mix of energy sources,” Armstrong says. “It could be that nuclear fission provides a core of energy that companies need for their industrial operations, it could be that they can import hydrogen in the form of ammonia or another carrier, and it could be that they leverage the renewable resources they have, together with storage technologies, to provide some pretty inexpensive energy for their manufacturing sector.”

“We don’t know,” Armstrong adds. “But that’s what we’re looking at, to see if we can figure out a pathway that gets them to their goals. We are optimistic that we can get there.”

The companies participating in the TIGER program include AcBel Polytech Inc., CDIB Capital Group / KGI Bank Co., Ltd., Delta Electronics, Inc., Fubon Financial Holding Co., Ltd., High-Tek Harness Enterprise Co. Ltd., Paul Hsu and Partners Co., Ltd., Ta Ya Electric Wire & Cable Co., Ltd., Walsin Lihwa Corporation, Wistron Corporation, and Zhen Ding Technology Holding, Ltd.

Electric powerIndustryLow-carbon fuelsPolicy

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