"It would take private investors some 10 years to get back their money. That's a bit too long," InfraVest's Chang says.
Taipower last raised electricity prices 22 years ago. Despite soaring coal, oil and natural gas prices, the company has repeatedly been ordered to cut power prices to help the government stabilize domestic consumer prices.
As a result, the company in 2005 may suffer a deficit of NT$6.1 billion (US$183.18 million) -- the first loss since the company was established 59 years ago -- according to a budget approved by parliament.
"That would put Taipower in an unfavorable position to raise funds from the capital market both here and abroad to continue with its investment projects," a Taipower spokesman says.
Taipower plans to build 546 offshore wind turbines, each with a capacity of 3.6 megawatts from 2010-2020. Each of those turbines will cost an estimated NT$200 million. Out of the 546, 176 would be built off Penghu, which Chen says is one of the best located wind farms in the world. Electricity would be transmitted to Taiwan through 40km undersea cables.
The rest of the planned offshore turbines would be located some 10-15 kilometers off the western counties of Changhwa and Yunlin.
Domestic consumption of power has risen at an average 4.5 percent a year over the past few years and Taiwan's energy companies have been exploring other alternative energy sources, like hydraulic and solar power.
"As hydraulic power is nearly saturated on Taiwan after decades of development and solar power is not really commercially viable, wind power has the most potential as a source of clean energy for the coming decade," Taipower's Chen says.
Taipower's hydraulic power plants have a combined capacity of 1,868 megawatts, just over five percent of the island's usage, while it also operates three nuclear power plants and is building a fourth, the last that will be permitted in Taiwan under an accord between the main political parties.
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