The precarious finances of the nation’s sole electricity utility are threatening its clean energy ambitions, tarnishing its attractiveness as a manufacturing hub for the world’s biggest chipmakers and even adding to its vulnerability in the event of a conflict with China.
Taiwan Power Co (Taipower) is forecasting another massive loss for last year and does not see much of an improvement this year. The state-owned company has been unable to fully pass on higher costs for gas and coal to customers due to political pressure to keep energy prices low.
It has also made a bet on
Photo: Lin Ching-hua, Taipei Times
offshore wind, a renewable technology that is facing difficulties across the world as costs and delays increase.
If Taipower cannot make sufficient progress on clean-energy generation, the nation could potentially lose some of its allure as a destination for chip manufacturing. Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest chipmaker, that supplies the likes of Apple Inc and Nvidia Inc, has a target of 100 percent renewables use by 2040.
Taiwan’s heavy reliance on imported fossil fuels, around 80 percent of its electricity came from gas, coal and oil in 2022, also leaves it vulnerable in the event of an attack or even a naval blockade by China.
The government wants green power to make up 20 percent of the mix by 2025, up from about 8 percent in 2022 — a challenging target given that it is also aiming to phase out nuclear power generation.
“Renewable energy is in need more than ever to fill the absence of nuclear power,” said Uran-Ulzii Batbayar, an analyst at research firm Rystad Energy. Adding more green generation requires substantial capital, and Taipower’s financial situation raises concerns about potential power disruptions affecting major chip manufacturers, she said.
Taipower is forecasting a loss of NT$198.5 billion (US$6.34 billion) for last year, following an even worse result in the previous year. The utility sees another loss, of NT$188.7 billion, this year.
The company is conducting an internal financial review and will report the results to the Ministry of Economic Affairs, it said in a statement last week, in which it also said it has no plans to raise electricity prices this year.
“Taipower plays the role of a shock absorber on the front lines, absorbing the impact brought by imported inflation,” it said in an e-mailed response to Bloomberg questions, adding it has been exploring new sources of income and reducing costs to improve its financial position.
The utility did raise prices by an average of 11 percent last year and 8.4 percent in 2022, though the adjustments mainly affected industrial consumers, it was reported in the Taipei Times.
However, the increases paled in comparison to the jump in its fuel costs over the period, which was partly driven by a global energy crunch that followed Russia’s invasion of Ukraine. Asian benchmark prices for power-station coal surged almost 160 percent in 2022, and while they gave up much of those gains last year, they are still well above where they were in 2019 and 2020. It is a similar story for natural gas.
“Taipower is a state monopoly utility, so it’s under political pressure to ensure low electricity prices, regardless which party is in power,” said Wood Mackenzie director of APAC power and renewables research Robert Liew.
Taiwan is not alone in having its green ambitions threatened by a utility with threadbare finances. Others in the region, like state-owned Korea Electric Power Co, which supplies about 70 percent of South Korea’s electricity, are in a similar bind.
For now, the Taiwanese government is still hoping much of the increase in renewables would come from offshore wind, even if many of these projects are in trouble due to rising costs and worsening delays. Requirements that developers buy equipment from Taiwanese equipment manufacturers have added to the industrywide troubles.
Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫), spokeswoman Yang Chih-yu (楊智伃) and Legislator Hsieh Lung-chieh (謝龍介) would be summoned by police for questioning for leading an illegal assembly on Thursday evening last week, Minister of the Interior Liu Shyh-fang (劉世芳) said today. The three KMT officials led an assembly outside the Taipei City Prosecutors’ Office, a restricted area where public assembly is not allowed, protesting the questioning of several KMT staff and searches of KMT headquarters and offices in a recall petition forgery case. Chu, Yang and Hsieh are all suspected of contravening the Assembly and Parade Act (集會遊行法) by holding
PRAISE: Japanese visitor Takashi Kubota said the Taiwanese temple architecture images showcased in the AI Art Gallery were the most impressive displays he saw Taiwan does not have an official pavilion at the World Expo in Osaka, Japan, because of its diplomatic predicament, but the government-backed Tech World pavilion is drawing interest with its unique recreations of works by Taiwanese artists. The pavilion features an artificial intelligence (AI)-based art gallery showcasing works of famous Taiwanese artists from the Japanese colonial period using innovative technologies. Among its main simulated displays are Eastern gouache paintings by Chen Chin (陳進), Lin Yu-shan (林玉山) and Kuo Hsueh-hu (郭雪湖), who were the three young Taiwanese painters selected for the East Asian Painting exhibition in 1927. Gouache is a water-based
Taiwan would welcome the return of Honduras as a diplomatic ally if its next president decides to make such a move, Minister of Foreign Affairs Lin Chia-lung (林佳龍) said yesterday. “Of course, we would welcome Honduras if they want to restore diplomatic ties with Taiwan after their elections,” Lin said at a meeting of the legislature’s Foreign Affairs and National Defense Committee, when asked to comment on statements made by two of the three Honduran presidential candidates during the presidential campaign in the Central American country. Taiwan is paying close attention to the region as a whole in the wake of a
OFF-TARGET: More than 30,000 participants were expected to take part in the Games next month, but only 6,550 foreign and 19,400 Taiwanese athletes have registered Taipei city councilors yesterday blasted the organizers of next month’s World Masters Games over sudden timetable and venue changes, which they said have caused thousands of participants to back out of the international sporting event, among other organizational issues. They also cited visa delays and political interference by China as reasons many foreign athletes are requesting refunds for the event, to be held from May 17 to 30. Jointly organized by the Taipei and New Taipei City governments, the games have been rocked by numerous controversies since preparations began in 2020. Taipei City Councilor Lin Yen-feng (林延鳳) said yesterday that new measures by