Fri, Nov 21, 2008 - Page 11 News List

Taipower demand growth may be slowest in years

DIMINISHING SALES The government has allowed Taipower to raise electricity rates as losses at the utility widened resulting from higher coal and natural gas costs

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Taiwan Power Co (Taipower, 台電), expects electricity demand to increase at the slowest pace in seven years this year because of the global recession and higher prices.

Taiwan’s electricity demand will probably grow less than 2 percent, the least since the 0.9 percent gain in 2001, chief engineer Tu Yueh-yuan (杜悅元), said in an interview in Taipei yesterday.

The state-run utility raised prices by an average of 25.2 percent this year to cover higher fuel costs.

Slowing electricity sales at Taipower will reduce fuel purchases by Asia’s largest thermal coal importer and the nation’s biggest user of natural gas. The global financial crisis is hurting sales of computers and mobile phones, trimming demand for semiconductors produced in Taiwan and cutting power use by factories.

“Growth is slowing,” Tu said. “We’re in this economic tsunami, which is prompting technology companies to cut output.”

Taipower’s power sales increased 1.5 percent in the 10 months to last month, Tu said. That’s slower than the average 4.4 percent annual growth over the last five years, the company’s Web site shows.

Industrial users account for 60 percent to 70 percent of Taipower’s sales, Tu said. The state-utility is Taiwan’s only electricity retailer.

“It was just miserable for industrial users in October,” he said.

Taiwan’s industrial output fell 1.39 percent from a year earlier in September, the first decline since March last year, a report by the Ministry of Economic Affairs showed on Oct. 23.

Increased power prices have encouraged consumers to cut back on electricity use, contributing to slower demand growth, Tu said.

The government allowed Taipower to increase electricity rates as losses at the utility widened because of surging coal and natural gas costs.

The company may post a loss of NT$190 billion (US$5.7 billion) next year, wider than the NT$105 billion projected for this year, because the increases aren’t enough to cover costs, Clint Chou (周義岳), a Taipower spokesman, said Oct. 1.

Taiwan paid an average US$773 a tonne for liquefied natural gas in the period, 42 percent higher than a year earlier, a report by the ministry showed.

The state-run utility will probably use 4.38 million tonnes of gas this year, less than the 5.58 million tonnes forecast previously, as demand for electricity wanes, Tu said on Aug. 12.

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

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