Taiwan Power: Quietly Getting the Smart Grid Right?

Taiwan Power – Quietly Getting the Smart Grid Right?

Imagine a utility that is vertically integrated and operates the entire grid through which it provides service.  It has various components of substation automation in place, as well as a Fault Isolation and Restoration (FLISR) system.  It faces the same challenges that many other utilities face as it develops its strategic plans for the next 5 to 10 years: increasing and substantial interconnection of renewable generation; strong pressure on the part of its regulator to minimize and defer new capital investment in generation and transmission; and a need to plan and implement its own version of an intelligent grid operation and management system, including smart meters.  Unlike other utilities, though, it is just beginning its smart grid planning now and has the opportunityof designing its smart grid program components and communications network from high voltage systems down to individual customers and can do so with the benefit of lessons learned around the world.  The utility is Taiwan Power Corporation (TPC) – and its story offers an interesting and instructive case study of how smart grid can be successfully implemented.

A little background: the TPC system operates the generation, transmission and distribution of electricity inTaiwan.  Peak load (summer) is not quite 34 GW; total installed capacity is nearly 41 GW; and annual sales at about 208 Billion kWh to about 12.7 million customers.  InUSterms, Taipower is the rough equivalent of PG&E, SCE, SDG&E, LADWP and SMUD combined.  Its generation mix is similar to theUSas a whole: 40 % coal; 19% nuclear; and 28% LNG.  TPC’s System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI) are 18.224 minutes/customer-year and 0.204 frequency per customer-year, respectively. These data indicate a system reliability much higher than theUSaverages (244 for SAIDI and 1.49 for SAIFI) and placeTaiwanin the top 5 most reliable national systems. Taipower system wide line losses are about 4.6%; in theUSthe average is about 7 %.  This despite the fact thatTaiwanis subject to earthquakes and typhoons (nearly 40 % of all their feeders are underground).

Taiwanenergy policy, regulation and rate regulatory matters are developed and administered through the Bureau of Energy (BOE), part of the Ministry of Economic Affairs.  How these policies are implemented is ultimately a matter of negotiation between the BOE and TPC.  BOE, with TPC input,  just promulgated a 20 year US $ 4 billion smart grid investment program. The program’s objectives are not much different from most other programs: 1) ensure continued high reliability; 2) encourage conservation and emissions reduction; enhance the use of green energy by improving interconnection capacity to 30% by 2030; and 4) develop low carbon smart grid industry that ultimately generates US $30 billion in value.  The following table lays out the phased goals for the program:



Phase I
2012 – 2015

Phase II
2016 – 2020

Phase III
2021 – 2030






System line loss targets (%)





Smart substations




Distribution Automation System





Renewable energy integrated
(% system capacity)

< 10 %




AMI (meters)

1,200 High Voltage (HV)

2,300 HV;
1 million Low Voltage (LV)

6 millionLV

National deployment

Emissions  reductions
(millions MT/year)




Revenue from newly developed Industry
(USD millions)






About $2.74 of the $ 4 billion investment is targeted for AMI; with about $ 800 k devoted to distribution automation and smart substations.  The remainder will be used for emissions reduction programs and for economic development.  Prior to this program, TPC had already invested considerable amounts in its distribution automation systems.  Seventy percent of its distribution system is already automated.  Its fault isolation and restoration system is well established throughout the island.  Some preliminary testing of meters has already occurred.   

TPC has just begun to implement Phase 1 for all but the last goal, which is not its responsibility.  As in theUS, virtually all the public attention and much of the investment is focused on smart meters.  Of most interest, however, is how TPC s approaching the communications network necessary for the program and the distribution level activities that are planned.

Phase 1 is really an intensive period of technology verification testing, the results of which will guide detailed planning for the future.  Taiwan includes a number of islands in addition to the main island- one of those, Peng-Hu (澎湖), will be the test bed for smart grid testing.  Peng-Hu already has a small and large scale wind and solar generation to supplement its diesel generators.  TPC will be installing a total of 30,000 meters on Peng Hu, along with a few smart substations and a demand response program.  During the later stage of the phase electric vehicle charging stations will be installed. 

TPC will be testing both PLC and RF mesh systems in the Peng-Hu trial.  They are out for bids on the initial meters, one requirement of which is the ability to upgrade firmware to accommodate future technology enhancements or changes in communications networks.  PLC is probably the more likely near term choice for the pilot and the initial AMI, as they have fewer concerns about outage disruption of the distribution automation system than other utilities. Longer term, and with its anticipated future growth, RF mesh or other radio options are more probable.  TPC has the ability to obtain licensed frequency spectrum from the National Communications Commission (NCC).

TPC intends to maximize the use of its extensive fiber optic network to support much of the substation and distribution automation program.

Peng-Hu and later phases will also be used to determine the best method to integrate their AMI, demand response, and existing SCADA with the distribution automation control system through their Common Information Model.

TPC, in some respects, is a much larger version of someUSutilities and faces many of the same issues regarding capital investment, cost reduction, efficiency improvements, enhanced customer engagement and integration of distributed energy resources.  Unlike US utilities, it benefits from a fully vertically integrated business structure and answers to only one regulator in a country with a national energy policy. Regardless TPC offers a few interesting lessons for other utilities:

  • Craft a long term vision and work tactical planning accordingly.
  • Define the implementation of intelligent grid management and automation in networking terms and utilize the OSI model to guide the network architecture.
  • Give transmission and distribution grid improvements higher priority than metering as the plan is rolled out.
  • Build in flexibility for both customer growth and step function improvements in technology.

TPC appears to be well positioned to further modernize a grid system that is already far more reliable than many systems.  Careful examination of TPC’s approach, as well as monitoring their future decisions and results could be quite valuable to other utilities and vendors, regardless of where they might be in their own smart grid program or product development plans.

(Also posted at Greentech Media: http://www.greentechmedia.com/articles/read/Taiwan-Power-Quietly-Getting-the-Smart-Grid-Right/)