Following its deployments to Australia, California and Texas, Tesla’s utility-scale battery storage system has quietly entered Taiwan, just in time for a major power outrage across the country.
The introduction of the Tesla battery also marks a new era in Taiwan’s energy industry, when utility-scale storage has grown in importance, thanks to the country’s extremely power-hungry semiconductor industry and the Taiwanese government’s pledge to generate 20% of the country’s electricity from renewables by 2025.
Renewables kickstarted the energy storage industry
The government’s ambitious renewable energy goal has made frequency control a top priority for Taipower, the state-owned utility company. In order to maintain a stable utility frequency at 60 Hz, Taipower’s traditionally centralized grid system has faced growing challenges from the distributed and volatile nature of renewable energy sources as more of them are connected to the grid.
In response, Taipower has targeted to boost its storage capacity to 590 MWh by 2025, a dramatic increase compared to its 5 MWh target in 2019. While Taipower will build 160 MWh of capacity on its own, the remaining 430 MWh capacity will be filled by the private sector, and it has kicked started Taiwan’s energy storage industry.
Traditional industries become energy solution providers
Skwentex International Corp, founded in 1989, began as a business exporting and importing diverse products, ranging from raw plastic materials to PCB boards. In 2018, it started a new department named New Energy Business Group and officially entered the energy industry.
Taipower’s energy storage target created an opportunity for companies like Skwentex when it launched a public procurement process last year for one of its projects on Automatic Frequency Control (AFC), also reportedly Asia’s first power frequency regulating energy storage system. The system, requiring a total capacity of 15 MWh, attracted 30 bidders, and eventually five were selected.
Skwentex was one of them, alongside other new entrants to the energy storage sector like Taiwan Cement, a formerly state-owned cement business, and Taiwan Powin Energy (TPE), a joint venture between IBASE Gaming and an American battery storage system provider Powin. IBASE Gaming is a Taiwanese manufacturer of gaming machines.
Taiwan still lacks domestic battery manufacturers
Even though traditional industries have been exploring the energy storage market, most are system integrators without the abilities to develop batteries in-house. In the Taipower project, for example, four out of five contract winners outsourced their batteries. Skwentex used the entire Tesla energy storage system for its 5 MWh capacity. The other two winners, Hengs Technology and Tatung Company, used Samsung’s batteries for their respective 2 MWh and 1 MWh capacities.
Interesting enough, TPE is reportedly supplied by Chinese battery manufacturers like CATL and Tianjin Lishen, but since the Taipower project forbade Chinese batteries, it is likely that TPE opted for the Japanese battery supplier Murata Manufacturing, which acquired Sony’s Li-ion battery in 2016.
The only exception here is Taiwan Cement. For its allocated 5 MWh capacity, the traditional cement company relied on its subsidiary, E-One Moli Energy Corp., to supply batteries. In fact, E-One Moli Energy has become Taiwan’s largest Li-ion battery manufacturer and is planning to build Taiwan’s first Gigafactory with an annual capacity of 1.8 GWh, focusing on NCM batteries.