Electricity prices would increase by up to 10 percent if the nation phases out nuclear power by 2025, Minister of Economic Affairs Lee Chih-kung (李世光) said on Saturday, rejecting projections of a 40 percent hike.
President Tsai Ing-wen’s (蔡英文) administration has set a goal of creating a nuclear-free nation by 2025, while a law was amended this year to allow “green” energy to be supplied directly to consumers and for the restructuring of state-owned Taiwan Power Co (台電).
In keeping with the government’s goal, the ministry earlier this month released a plan for electricity generation, saying that by 2025, natural gas should contribute 50 percent, coal 30 percent and renewable energy sources 20 percent of the nation’s energy.
Natural gas prices have dropped with the increase in shale gas production, while international trends have been showing a steady decline in the cost of renewable energy, Lee said in an interview with the Central News Agency.
He said the claims made by an academic that electricity prices would rise 40 percent by 2025 “were wrong.”
The primary factor determining electricity prices is the cost of fuel, Lee said.
If fuel prices remain steady, electricity prices would increase by no more than about 10 percent if the government’s 2025 power generation plan succeeds, Lee said.
“If we analyze the costs carefully, we could take a comprehensive approach from the cradle to the grave,” he said.
Lee said that although the Electricity Act (電業法) has been amended to facilitate the development of “green” energy, there is much work to be done, such as building an environmentally friendly energy industry and addressing the problem of air pollution.
He said the government’s investment in the “green” energy industry is expected to create many business opportunities and high demand for professionals.
“It would be a mistake” to let such an opportunity slip, Lee said.
Meanwhile, the outstanding loans extended by local banks to the “green” energy industry hit NT$1.02 trillion (US$33.86 billion) as of the end of last month, according to statistics compiled by the Financial Supervisory Commission.
Commission Chairman Lee Ruey-tsang (李瑞倉) said that the financial sector has served as a driver for “green” energy development by providing capital at a time when the government has listed renewable energy development at the top of its agenda.
Lee Ruey-tsang said that fund demand from solar and offshore wind power developers are expected to total about NT$1 trillion and NT$540 billion, respectively, by 2025.
In addition to banks, the commission has also encouraged local insurance companies to provide loans to the “green” energy sector.
As of the end of last month, the commission had approved “green” power plant investment plans worth NT$4.62 billion submitted by Cathay Life Insurance Co (國泰人壽), Fubon Life Insurance Co (富邦人壽), Taiwan Life Insurance Co (台灣人壽) and Tokio Marine Newa Insurance Co (新安東京產險).
The commission said it has also relaxed restrictions on “green” energy developers’ stock listings in the local bourse in a bid to allow them easier access to the capital market for funding.
The nation’s first “green” bonds worth about NT$5.17 billion were issued last week by E. Sun Commercial Bank (玉山銀行), CTBC Bank (中信銀行), KGI Bank (凱基銀行) and Bank SinoPac (永豐銀行), the commission added.
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