State-run Taiwan Power Co (Taipower, 台電) has estimated its losses for this month will exceed NT$6 billion (US$199 million), increasing the company’s accumulated losses to NT$195.7 billion.
Taipower chairman Hwang Jung-chiou (黃重球) said on Friday the loss estimate, which was higher than a previous forecast, reflected higher operating costs due to a 2.99 percent hike in natural gas prices by state-run oil refinery operator CPC Corp, Taiwan (台灣中油).
The utility company had previously expected its bottom line to improve last month after the government implemented a phased-in hike in electricity rates.
Taipower’s losses for May reached NT$16.5 billion and the figure fell to NT$9.74 billion for last month. In the first half, Taipower incurred NT$58.3 billion in losses.
As the economies of China and India, two of the world’s major coal consumers, will continue to grow — albeit at a slower pace — a coal shortage in the Asia-Pacific region is expected to continue and therefore there is little room for coal prices to fall this year, Huang said.
Taipower will maintain its level of coal purchases for next year, with 75 percent of the buying on long-term contracts and the remaining 25 percent from the spot market, Huang said.
Every long-term contract will include options to raise or cut purchases by 20 percent in a bid to increase flexibility to reflect market reality, he said.
Starting from January next year, Taipower will lower its coal inventory to 40 days from the current 45 days, hoping to cut the number to 30 days in the future, he added.