Assessing feed-in tariffs on wind power installation and industry development in Taiwan

This study assesses the policy effects of feed-in tariffs (FITs) on Taiwan's use of wind power and the growth of the country's wind power industry. This study uses the system dynamics approach to develop a simulation model to assess the FIT policy. The simulation, covering 2013 to 2025, shows that the FIT scheme impacts Taiwan's installed wind power capacity significantly before the targeted capacity is achieved. On average, a 10% increase in the FIT price (based on the 2013 price) results in a one-year early achievement of the target. By contrast, a 10% reduction in the FIT price (based on the 2013 price) delays the achievement of the target by two to three years. Moreover, the FIT scheme can facilitate growth in Taiwan's wind power industry: every 10% increase or decrease in the FIT increases or decreases industry growth by 1.12%. When the FIT is increased by 10% from 2.6258 NT/kW h, the 2020 cumulative output value of Taiwan's wind power industry increases from NT$105.81 billion to NT$107.00 billion, an increase of NT$1.19 billion. The findings of this study indicate that the FIT scheme is a policy tool that can achieve reductions in carbon emissions and facilitate the development of Taiwan's wind power industry. (C) 2016 Elsevier Ltd. All rights reserved.