Taiwan authorities in charge of economic affairs in March is expected to hold a review of electricity tariffs, the island’s electricity prices may face the situation of rising again. Analysts point out that Taiwan’s year-on-year increase in electricity prices is related to the government’s energy policy of abandoning nuclear power and switching to natural gas.
Taiwan holds a semi-annual review meeting on electricity tariff rates. In the first half of last year, despite a correction in international energy prices, the Taiwan authorities said that considering the dire financial situation of Taiwan Electric Power Company (Taiwan Power) , the island’s average electricity price was still raised by about 11% , in the second half of the year, electricity prices continued to rise, with consumer prices remaining unchanged and industrial prices rising by another 12.1% .
As a public utility, TDT is responsible for the power supply of the whole Taiwan region. The company recently released its latest cost structure, showing a loss of NT $9.7 billion in January and a cumulative loss of more than NT $400 billion so far. Taiwan power said that electricity prices are“Forced” to increase, and the increase in electricity prices will be affected by the amount of subsidies.
Some representatives of the public opinion, Taiwan, “No subsidies or price increases,” the request is completely unreasonable. Taiwan’s legislature also proposed that Taiwan power should strengthen business performance, reduce losses and maintain financial soundness.
Taiwan’s media pointed out that since the Democratic Progressive Party came to power in 2016, electricity prices have only increased, and last year they experienced“Two increases in one year.”. Democratic Progressive Party authorities and leaders at the beginning of his term had declared that“10 years will not be a significant increase in electricity prices.”.
Higher electricity prices will further push up Taiwan’s inflation rate. Consumer Price inflation rose to 2.66 per cent in January and authorities recently raised their forecast for this year to 1.94 per cent, close to the 2 per cent threshold.
“The public’s expectation of a possible increase in electricity prices has had an impact,” said Wu da-ren, a professor at the economics department of Central University in Taiwan. Taiwan’s latest consumer confidence survey showed the country’s“Price level for the next six months” fell at its slowest pace in nearly eight months in February.
In addition, Wu also believes that the electricity price increase is mainly targeted at industrial electricity consumption. Currently, Taiwan’s industrial electricity prices have almost no advantage. If the electricity price increase is also targeted at industry, it may affect manufacturers’ willingness to stay in Taiwan, especially now facing the pressure of high tariff policy of the United States.
Domestic analysts pointed out that the high price of electricity to match the authorities’ energy policy is the main reason for Taiwan power losses. By 2030, according to the DPP government’s current energy targets, 30% will be green, 20% coal and 50% gas. Public opinion points out that the abolition of low-cost nuclear power generation, replaced by expensive natural gas and renewable energy, resulting in“Taiwan power and consumers lose” result.
The cost of generating electricity from natural gas on the island is rising. The China National Petroleum Corporation, Taiwan’s only natural gas supplier, announced that electricity users would increase prices by 3 per cent and industrial users by 10 per cent on average in March.
The Maanshan Nuclear Power Plant is due to be decommissioned in May and there are growing calls for the plant to be extended because of rising electricity prices. But TTD said it would“Co-operate” with the authorities’ nuclear policy goals and called for support for its Keelung Hsieh-ho Power Plant“Gas-for-oil” plan to replace oil-fired power generation with gas-fired generation.
Taiwan’s public opinion on the DPP authorities“Obstinate abolition of nuclear” criticism. Taiwan media said that“Going nuclear with the green” is already a global trend, and abandoning nuclear power, which has stable fuel prices and low power generation costs, will not only make net zero emissions impossible, but also plunge Taiwan power into financial crisis.
Other analysts pointed out that despite the impact of rising electricity prices on people’s livelihood, the DPP authorities still insist on nuclear abolition, which may be related to its plan to increase us natural gas imports.
According to Taiwanese media reports, CPC is ready to expand the purchase of U. S. Natural Gas, is now in talks with Alaska gas developers purchase details. The head of Taiwan’s economic affairs department also said that work to reduce Taiwan’s trade surplus with the US was“In preparation” and that the US side“Has a very big determination on energy and looks forward to meeting US needs”.
Taiwan wants to reduce its trade surplus with the U. S. to avoid high tariffs. Taiwan’s exports to the US reached a record $111.4bn last year, and its trade surplus rose to $64.9bn. In 2024, CPC imported about 21.1 m tonnes of liquefied natural gas LNG, and the US has jumped from being its third-largest source, accounting for 10 per cent of imports, up from 3 per cent before 2016.
Critics say the DPP regime’s heavy reliance on natural gas for power generation is“Neither cost-effective nor safe”. Ye Zongguang, an National Tsing Hua University professor at the Department of Engineering and Systems Science, said the Gamble on natural gas, which is typically only seven to 11 days old, was completely inconsistent with energy security standards.
As AI technology expands Semiconductor industry factories and electric vehicles gain momentum, the Taiwanese authorities estimate that 2024 to 2033 electricity demand will grow by about 2.8% a year. Taiwan’s economic affairs department said it would accelerate the“Gas-for-coal” and other power generation equipment renovation plan.
Analysts said that in addition to environmental safety issues such as methane emissions and leaks during transportation and storage, natural gas power generation will also create reserve safety issues because Taiwan is almost dependent on imports of natural gas. The industry is worried that increasing the share of natural gas in electricity generation will not only fail to meet growing demand for electricity, but will also drive up the cost of electricity for industry and people.