Exploring the Supply and Demand of Renewable Energy Certificate (REC) Market in Taiwan: A Case Study

Abstract

This master's thesis embarks on an exploration of the intricate factors underlying Renewable Energy Certificates (RECs) in Taiwan. By situating Taiwan within the global renewable energy landscape, the study underscores its unique position in this dynamic field. Central to this investigation is the examination of the relationship between two types of RECs: international RECs (I-RECs) and Taiwan-specific RECs (T-RECs). The research seeks to unravel the correlations between these two systems and assess the potential impact of introducing T-RECs on I-REC dynamics.

In addition to scrutinizing the I-REC and T-REC interplay, the study ventures into less-explored territories, such as the volumes of REC issuance and cancellation. By delving into these overlooked areas, the research aims to provide a comprehensive understanding of the determinants of REC systems. Employing a blend of qualitative and quantitative methodologies, the investigation endeavors to shed light on the intricate dynamics shaping REC markets in Taiwan and their broader implications for the renewable energy sector.

The research questions outlined serve as guiding pillars for this study. Firstly, the inquiry into the relationship between the electricity and REC markets in Taiwan seeks to uncover correlations between electricity production and REC supply, as well as electricity consumption and REC demand. Additionally, the study aims to discern potential correlations between energy indexes and REC supply and demand.

Furthermore, the investigation scrutinizes the relationship between I-RECs and T-RECs in Taiwan. Hypotheses are formulated to explore the long-term correlations between these two types of RECs and to evaluate their interactions beyond pricing. Through rigorous analysis and empirical inquiry, this research endeavors to provide valuable insights for stakeholders in Taiwan's renewable energy sector, informing policy decisions and fostering sustainable energy practices.