Fishery solar plant projects could benefit farmers and investors, but complexities from this new initiative could drain the pond

Since 2016, the Taiwan government has committed to phasing out three active nuclear power plants by 2025, while diligently promoting development of new forms of sustainable energy, in particular wind and solar photovoltaic (PV) technologies.

Compared to wind power projects, which require longer development and construction periods as well as significant financial resources, solar-power projects are less demanding from a construction perspective and may even serve in a transitional capacity during wind power construction.

Acknowledging this advantage, the government has set a goal of procuring 20GW of solar PV installation by 2025. Taiwan Power Company, the state utility company, aims to complete 2.5% of this target, with the remainder from private developers.

Among these projects, the government has proactively allocated certain zones for fishery solar PV projects, optimising land use to allow power generation and fish farming simultaneously and hoping to foster a win-win situation for rural areas by stimulating the economy and bringing stable green-energy supply.

It is expected that the fishery solar PV projects will be attractive to developers, bringing new opportunities to undertake large-scale solar PV projects with the attractive feed-in tariff.

This article introduces important features of fishery solar PV projects and highlights key risks for prospective investors.

TYPES OF PROJECTS

Developers may choose to install rooftop solar PV systems on facilities housing indoor fish farms or install ground-mounted solar PV systems above outdoor fish farms. Outdoor projects generally involve floating solar PV systems, systems with pillars affixed to the bottom of retention ponds, or with pillars affixed to the bottom, or dike, of fishponds.

DEVELOPMENT PROCESS

Billy MC Chen
Billy MC Chen
Partner at K&L Gates in Taipei
Tel: +886 2 2326 5171
Email: billy.chen@klgates.com

Fishery solar PV projects are a combination of solar PV project and fish farm, so the general development process that applies to them needs to be supplemented by additional processes due to their characteristics as a fish farm.

Like any other solar PV project (except small projects with capacity under 2MW), the general process required for developing a fishery project includes: obtaining approval from the local government; obtaining approval from other authorities if located in an environmentally sensitive area; obtaining an establishment and construction permit from the central government; entering into a power purchase-grid connection agreement with Taiwan Power Company; and registering as an electricity enterprise.

For outdoor-type projects, the required documents are:

• Environmental and social inspection document (article 3, paragraph 1, item 1 of the Regulations on Registration of Electricity Industry). Three levels of zones are stipulated for fishery solar PV projects, namely, advanced zone, priority zone, and attention and mitigation zone. Within an advanced zone or priority zone, an environmental and socially friendly self-assessment form should be prepared. Within attention and mitigation zones, a more complex document – countermeasures for environmental and social issues – should be prepared. Therefore, in site selection, developers tend to prefer acquiring a site within advanced or priority zones.

• Agriculture land use permit (article 4, item 2, paragraph 1, and article 29 of the Regulations for Examining Applications for Structuring Farming Facilities on Agricultural Land). This permit is required for installing ground-mounted solar systems above outdoor fish farms on agricultural land, but the area occupied by the solar system cannot exceed 40% of the total size of such agricultural land (40% restriction).

Indoor-type projects need to acquire an agriculture land use permit (article 4, item 2, paragraph 1, and article 28 of the Regulations for Examining Applications for Structuring Farming Facilities on Agricultural Land). This is required for installing rooftop solar systems (as green power generation facilities) above the rooftop of indoor fish farms.

The process for indoor-type projects seems more straightforward than for outdoor ones, because neither the environmental and social inspection document is required, and the 40% restriction does not apply. However, if there are no existing indoor fish farms on the project site, a developer needs to build the farm before starting work on power generating facilities. In this case, developers may face increased risks due to the requirement for additional approvals (including construction and agriculture land use permits), as well as increased construction and financing risks, including security package.

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Zhong Lun law Firm

K&L GATES
30/F, 95 Dun Hua S. Road, Sec. 2
Taipei, 106 Taiwan
Tel: +886 2 2326 5188

www.klgates.com