Fri, Oct 21, 2016 - Page 1 News List

Cabinet approves Taipower break-up

KINDERGARTEN QUOTA:The Executive Yuan also said that NT$6.2 billion would go to establishing non-profit kindergartens to encourage women to enter the workforce

By Chen Wei-han  /  Staff reporter

Windmills turn at a wind farm off the coast of Penghu Island in an undated photograph. The Executive Yuan yesterday passed legislation to deregulate the power market.

Photo courtesy of Taiwan Power Co

The Executive Yuan has approved measures to liberalize the power market and break up state-run Taiwan Power Co (Taipower, 台電), as well as increase the number of public kindergartens by 1,000 by 2020 to expand childcare coverage and increase women’s participation in the workforce.

The Executive Yuan yesterday passed an amendment of the Electricity Act (電業法) that would deregulate the power market and promote “green” energy.

The proposal calls for Taipower to transform into a holding company with subsidiaries.

According to the draft amendments, “green” energy firms will be allowed to sell and transmit electricity to users directly, with pricing being freely negotiated between generating companies and clients, Bureau of Energy Director-General Lin Chuan-neng (林全能) said.

Currently, firms can only sell power to Taipower, Lin said.

Businesses will be permitted to operate traditional power plants, but they can only sell electricity to Taipower, he said.

To complete the separation of power generation and electricity distribution, Taipower has to be divided into subsidiary companies in six to nine years following the passage of the draft amendment by the Legislative Yuan, with a company responsible for power generation and another for distribution and retailing, Lin said.

The “public electricity retailing industry,” which is to be composed of Taipower spinoffs, would be obliged to supply power to the public, which will also have the choice to purchase “green” energy, he said, adding that “non-renewable” electricity rates would be regulated to offset price fluctuations due to global fuel costs.

The Executive Yuan was planning an across-the-board liberalization to deregulate both the traditional and renewable energy markets, but the latest amendment is mainly focused on the “green” energy sector, Executive Yuan spokesman Hsu Kuo-yung (徐國勇) said.

The traditional power sector would be liberalized in the next round of legislation to allow operators to freely enter electricity retailing, Hsu said.

“The government has adopted a gradual approach to liberalization to prevent the legislation from being stalled,” he said.

The legislation is necessary, as Taipower’s monopoly of the industry is what is prohibiting rapid growth in the renewable energy industry, Premier Lin Chuan (林全) said, adding that it is the government’s priority to liberate the “green” energy market during this legislative session.

“Criticism saying that the legislation would lead to higher electricity prices and the monopolization of the power market by business groups is incorrect,” Hsu quoted the premier as saying.

“The percentage of green energy in the nation’s power grid is too low and even if the price of green energy increases several times over [following the liberalization], it would not affect electricity supply,” Minister of Economic Affairs Lee Chih-kung (李世光) said.

Hydroelectric and nuclear power plants will continue to be state-run.

Meanwhile, the Executive Yuan is to budget NT$6.2 billion (US$196.6 million) to establish 1,000 kindergartens in the next four years.

Minister of Education Pan Wen-chung (潘文忠) said the plan is to boost the number of “non-profit kindergartens” — facilities run privately on refurbished public properties — and public kindergartens.

The plan is expected to raise the percentage of children enrolled in public or non-profit kindergartens from 30 percent to 40 percent by 2020, Pan said.

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