2.3.1 Laws and Regulations

The Renewable Energy Act came into effect on January 1, 2006. It specified the implementation of FiT on renewable energy and full purchase of renewable energy, and the difference between the FiT and price of the electricity derived by conventional energy be apportioned among the customers with access to the grid. The Act of 2005 version placed an obligation on grid companies to purchase all the renewable energy added to the grid, regardless of the cost.

In the Renewable Energy Act Amendment issued in December 2009, the provision regarding full purchase of renewable energy was modified to “guaranteed purchase of renewable energy”; hence, providing the grid companies with the justification to decline the access of renewable energy when an electricity surplus occurs or when the price of conventional energy falls.

According to the amendment, the Renewable Energy Development Fund (REDF) was established and financed by special financial funds for renewable energy and revenue from the “Electricity Surcharge Due to Renewable Energy” (ESRE). The ESRE, levied on industrial and commercial users of electricity (approximately 80% of the national total consumption), has been exclusively used for the price subsidies of renewable energy and investment subsidies to projects that integrate renewable energy into the grid (including wind power, biomass power, and PV power). The special financial funds for renewable energy were used for the renewable power projects in remote unelectrified areas, and renewable energy pilot projects.