The Ministry of Economic Affairs (MOEA) yesterday said it was still studying how to maintain a stable electricity supply as the nation targets a reduction in carbon emissions coupled with a healthy economic development, denying a newspaper report that it was secretly working on a project to open up more power production capacity to private firms.
“The ministry has yet to decide whether to open more power plants built by private companies,” Bureau of Energy Deputy Director-General Wang Yunn-ming (王運銘) said in a statement. “The ministry will only do so when there is a concern about insufficient power supply and [the nation is facing] a threat of power rationing.”
The remark came after a report in the Liberty Times (the Taipei Times’ sister newspaper) said yesterday that the ministry was mulling opening to more independent power producers (IPP) at a time when the nation’s reserve margin remains way too high.
The newspaper said the new opening to IPPs to supply power to areas north of Miaoli County, if approved by the Cabinet, would mean a new power capacity of 900,000 kilowatts would come online in 2015, adding to the financial burdens to loss-making Taiwan Power Co (台電, Taipower).
The paper also speculated that the planned opening would mostly benefit Taoyuan County-based Kuo Kuang Power Co (國光電力) — which is a subsidiary of Taipower’s reinvestment entity, Taiwan Cogeneration Corp (台灣汽電共生).
Taiwan has been promoting market openings to IPPs since 1995 to allow private companies to generate and sell their power to Taipower, complementing the supply by the state-run utility amid increasing demand.
Following a first-phase opening in January 1995, the government opened the domestic market to IPPs for a second phase in August 1995, the third in January 1999 and the fourth in June 2006.
Last week, the ministry announced that effective May 15, Taipower would raise household electricity rates by an average of 16.9 percent, commercial electricity rates by 30 percent and those for industrial users by 35 percent — the first rate increase since 2008.
However, the announcement has been followed by increasing complaints about Taipower’s management efficiency, transparency in the company’s pricing and its purchasing contracts with IPPs. Opposition legislators have also criticized Taipower’s practice of maintaining a reserve margin of more than 20 percent during President Ma Ying-jeou’s (馬英九) first term, including an all-time high of 28.1 percent in 2009 — much higher than a target of 16 percent adopted by the previous Democratic Progressive Party administration.
The ministry yesterday said Taipower’s reserve margin, also known as reserve capacity, is expected to fall to below 17 percent next year from 18.1 percent this year. It was 20.6 percent last year.