20120428 Taipower denies having excess reserve capacity

Taipower denies having excess reserve capacity

TOO MUCH? Taipower said that its reserve capacity only exceeded 16% to hit a high of 28.1% after the financial crisis reduced demand for power in 2008

By Lee I-chia / Staff reporter

Deficit-plagued Taiwan Power Co (Taipower) yesterday held a press conference to explain the company’s electricity reserve capacity, saying it conformed to the 16 percent reserve designated by the Executive Yuan in 2005.

Taipower chairman Edward Chen (陳貴明) said the price difference between off-peak hours and critical-peak hours had been addressed in electricity price adjustments to discourage electricity usage in peak hours.

“The electricity reserve should be viewed from two values — the target value and the actual value,” Chen said, adding that the target value in Taiwan had been set at 16 percent since 2005, and the actual value fluctuates every year under the influence of changing economic prospects, climate and major construction projects.

Taipower Department of Power Development director Ben Wu (吳明竤) said although the target value had been set at 20 percent before 2005, the actual value had not exceeded 16 percent before 2003, and the peak of electricity reserve capacity of 28.1 percent occurred due to reduced electricity demand after the financial crisis of 2008.

Wu said that it was necessary to conform to the target value of the reserve capacity to ensure the stability of the power supply.

The proposed construction plans of new power plants are still ongoing, because the electricity reserve capacity will drop after two operating nuclear plants are retired in a few years, Chen said.

Asked whether Taipower was acting as “player and referee” by providing electricity supply and profiting from selling electricity at the same time, Chen said its power load forecasting was conducted by many governmental agencies, not solely by Taipower.

In response to complaints from manufacturing industries about a too high increase in the rates for electricity during off-peak hours, Chen said the issue should be viewed from the perspective of price difference rather than the difference in the amount of the increase.

“For example, if the electricity price during off-peak hours increased from NT$1 to NT$2, and the price during critical-peak hours increased from NT$3 to NT$4, the price difference for the two is the same — NT$1,” Chen said. “However, the increase rate for off-peak hours is 100 percent, while the critical-peak hour is only 33 percent, so the increase of electricity rates during off-peak hours is thought to be too high.”

As to requests by some industries for the price increase to be implemented in separate phases, Chen said that while the rationalization program for electricity prices had been proposed by Taipower, the ultimate decision was the Ministry of Economic Affairs’ to make.