Deputy Minister of Economic Affairs Tseng Wen-sheng (second from right) poses for photo with other panelists at the 2024 CommonWealth Economic Forum in Taipei on Thursday. ( CommonWealth Magazine.)
Taipei, Jan. 18 (CNA) Deputy Minister of Economic Affairs Tseng Wen-sheng (曾文生), who doubles as chairman of Taiwan Power Company (Taipower), on Thursday responded to pressing inquiries about the company's substantial financial losses, renewable energy expansion, and operation of the country's nuclear power plants.
Asked about huge losses incurred by Taipower in recent years at the 2024 CommonWealth Economic Forum in Taipei, Tseng stressed that the company operates as a state-run enterprise and is not governed by free market principles. It has an electricity price review committee that adjusts the price of its product if and when necessary, he said.
In 2022, Taipower reported losses of NT$267.5 billion (US$8.48 billion), followed by further losses of NT$198.5 billion in 2023, despite a government subsidy of NT$50 billion, resulting in a total accumulated loss of NT$466 billion over the two years.
Starting in 2022, international fuel prices were "significantly impacted" by the Russia-Ukraine war and extreme weather conditions, leading to a "sharp increase" in generation and purchased electricity fuel costs for Taipower, the company said in a press release last June.
The deputy minister stressed that adjustments of the country's electricity prices "always take fairness, price controls, inflation, and [the country's] competitiveness into consideration."
The company has an electricity price that is "universally generous" to the public, he said.
Tseng also pointed to recent global inflation as a reason why the company has not made major moves to increase energy prices to compensate for its operational losses. He added that potential increases will be considered once commodity prices stabilize.
In discussing competitiveness, Tseng noted that Taiwan's economy relies heavily on the manufacturing industry. He said that Taipower has consistently looked to Korea Electric Power Corporation (KEPCO), a state-run South Korean power company, as a benchmark for setting its own prices.
South Korea has long been considered a major competitor of Taiwan in terms of manufactured goods exports.
KEPCO has accumulated losses even higher than Taipower, Tseng said. According to a report by Reuters in November 2023, KEPCO's debt hit 201 trillion won (US$154 billion) at the end of June 2023.
As a result, KEPCO had to increase industrial electricity prices before Taipower. "Our price is about NT$3.4 (per kilowatt hour), South Korea's is NT$4.3," Tseng said.
On the goal of having renewable energy account for 30 percent of Taiwan's energy mix by 2030, the deputy minister said the government has not only made progress in solar and wind power sources -- with many wind farms expected to connect to the power grid in 2025 and 2026 -- geothermal energy, hydrogen, and marine energy are also being explored.
For example, ocean thermal energy conversion projects have already been undertaken by TCC Green Energy Corporation, the deputy minister said.
Tseng noted that the company will add four more combined-cycle gas turbines this year, for a total installed capacity of 4,436MW (megawatt), a record annual expansion.
This increase will not only meet greater demand for electricity, but also facilitate the retirement of coal-fired generators at an even faster pace and allow more renewable energy, which is intermittent, to be connected to the grid, he said.
The deputy minister also responded to recent talk about extending the operational life of Taiwan's nuclear power plants in the wake of the elections on Jan. 13, with the pro-nuclear Kuomintang (KMT) now the largest party in the Legislature.
The Legislature could make a difference because the operational lifespan of nuclear power plants is regulated by existing laws, and extending their lifespan requires applications submitted five to 15 years before their legal operating period expires.
However, the question of nuclear power plants ultimately comes down to the problem of handling nuclear waste and public consent, Tseng said.
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