Fri, Feb 09, 2007 - Page 11 News List

Taipower plans Taoyuan County natural gas plant

PROS AND CONS A gas-fired facility takes less time to build than a coal-fueled plant, but production costs per kilowatt-hour are higher, eating into company profits

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Taiwan Power Co (Taipower, 台電), which supplies 75 percent of the nation's electricity, plans to build a natural gas-fired plant because of delays in the construction of a coal-fueled facility.

The state-run utility is seeking government approval for a NT$38.1 billion (US$1.2 billion) facility with a capacity of 1,440 megawatts, Justin Lin, planning section chief of the Taipei-based company, said by telephone today.

"The project is a contingency plan for delays" in the 1,600 megawatt coal project, Lin said.

Generating more electricity from gas-fired plants could push up costs for Taipower. The company spends an average NT$2.5 to generate a kilowatt-hour of power in these facilities, more than double that in coal plants, said Tu Yueh-yuan (杜悅元), the utility's chief engineer.

A gas-fired project takes about five years to complete, but a coal-fired plant development takes more than 6.5 years, Lin said.

The government owns 97 percent of Taipower, which generates about 75 percent of the electricity the nation uses and monopolizes transmission in Taiwan.

Lin said Taipower expected to start building the gas-fired generator in northern Taoyuan County next year and begin operating it in 2012.

The company will not meet its target to start operating the coal-fueled plant in 2012, Lin said.

The company had planned to start constructing the coal plant in Changhua County in 2005. The project has yet to pass an environmental impact review, Lin said.

Separately, Formosa Petrochemical Corp (台塑石化), the nation's only publicly traded oil refiner, plans to start one of Asia's largest naphtha processing plants, known as a cracker, in the second quarter.

The cracker, with an annual capacity to produce 1.2 million tonnes of ethylene, will commence operations between April and June, said Lin Key Yen, a company official, by telephone from Taipei yesterday. The new plant will boost the nation's ethylene capacity by 42 percent to 4 million tonnes a year.

Petrochemical makers in Asia, including Formosa and Yeochun NCC Co, are boosting ethylene capacity to tap Chinese demand for chemicals as consumption in Taiwan and South Korea stagnates.

Ethylene is the building block of many plastic products.

Yeochun NCC, South Korea's biggest ethylene maker, in December restarted a cracker after increasing its ethylene capacity.

Mailiao-based Formosa Petrochemical operates two crackers with a combined annual capacity to make 1.73 million tonnes of ethylene.

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