The nation's high dependence on imported energy renders its economy vulnerable to any oil price shock. An increase in electricity fees is already in the pipeline due to higher oil prices, and so the cost of living goes up and the public complains.
The recent calls, again, by the government to encourage fuel conservation and to develop alternative sources of energy, makes it clear that policy makers actually know what energy strategy the nation needs. What's missing is an action plan to get us from here to there.
As part of such a plan, it is imperative that the domestic energy market be given a free hand by the government. This will allow price fluctuations to reflect the actual level of oil supply and consumer demand -- and as prices rise, the public will have a natural incentive to conserve fuel.
The Ministry of Economic Affairs and its Bureau of Energy have been active in promoting energy conservation, allocating billions of dollars every year to publish material on resource conservation and to arrange public seminars -- including the national energy strategy conference last June.
But the government's efforts have been ineffectual, for it lacks the mandate to insist that manufacturers and households make the necessary behavioral changes to conserve energy. Efforts to promote the development of renewable energy sources have also been unimpressive as the financial incentives and tax credits offered by the government are insufficient.
Last week, Minister of Economic Affairs Morgan Hwang (黃營杉) expressed concern over the nation's high dependence on imported oil and demanded higher fuel efficiency standards industry-wide. He also urged state-run Taiwan Power Co to develop solar energy technology and talked about a future where rooftop solar systems are widely used to help reduce electricity demand during peak hours.
But despite Hwang's call, the government itself hasn't demonstrated much interest in making alternative energy sources viable. For instance, few government buildings include solar-electric systems to save energy or even use electricity-management systems to help monitor and control energy use.
Development of solar-energy systems is maturing, compared with other forms of alternative or renewable energy. But it is still some way from becoming commercially viable for business or residential users. High production costs are just one of a few reasons solar energy hasn't become a major source of electricity.
Like other countries, Taiwan is developing renewable energy sources like solar, wind and hydro power. But as Academia Sinica President Lee Yuan-tseh (
Nevertheless, so long as the government imposes price controls on oil and electricity in an effort to fight inflation, people will not wake-up to the urgent need for serious conservation work.
If the government is determined to bring inflation under control by requiring state-owned power companies to absorb the cost of higher oil imports and thus keep retail fuel and power prices comparatively low, not only will the government see its budget deteriorate, but power companies will also feel no urgency to become more efficient in terms of production and cost control.