The analysis of renewable energy policies for the Taiwan Penghu island administrative region

Abstract Taiwan dependents on thermal power for 70% of its total energy supply. The high consumption of fossil fuel increases the carbon dioxide (CO2) emissions and consequently causes global warming and climate change. Thus, Taiwan has proposed new regulations and measures such as “The Framework for Sustainable Energy Policy – An Energy Saving and Carbon Reduction Action Plan“and” The Master Plan of Energy Conservation and Carbon Mitigation” for domestic carbon reduction. These regulations indicate that the urgency to promote renewable energy to the public to achieve sizable reduction of CO2 emissions. The objective of this paper is to develop a cost–benefit evaluation methodology based on system dynamics (SD) modelling for any given administrative region to evaluate renewable energy policies. This research develops specific SD models with causal feedback loops to assess the effectiveness of policies and the corresponding benefits for solar energy carbon reduction. The solar energy applications on Taiwan's largest island, Penghu, are used to demonstrate the proposed methodology. The SD approaches and the evaluation of the results serve as a reference to promote solar energy in the other regions with reduced costs and reliability.