Taiwan wastes electricity because it is cheap: Minister

TAIPEI - Economics Minister Chang Chia-juch yesterday said Taiwan has the highest average electricity consumption per person in Asia and electricity prices are among the cheapest in the world.

Household electricity prices are the second lowest in the world, while industrial electricity is the second cheapest in Asia and fourth in the world, Chang said.

Such a price structure is hindering the government's efforts to reduce energy consumption and carbon emissions, but at the same time encouraging waste, he said during a radio interview, as he defended the economics ministry's decision to raise electricity prices in October.

The minister did not disclose figures to support his comparison of Taiwan's electricity prices with other countries.

He did provide figures to show that state-run Taiwan Power Company (Taipower) has had fast rising electricity-generating costs.

In 2003, fuel for producing electricity accounted for 37 per cent of the total cost, but now the percentage has shot up to 63 per cent, according to the minister.

A breakdown of the fuel cost shows that over the past 10 years, oil costs have soared 29 per cent, coal 168 per cent and natural gas 100 per cent, Chang said.

In 2003, Taipower still managed to report profits, but since then it has accumulated losses of over NT$220 billion (S$9billion), the minister noted.

Taipower started revamping its business operation last year, revising its contracts with private electricity suppliers, changing its cost structure, adjusting its inventory and revitalizing its idle assets, Chang said.

These changes are expected to reduce Taipower spending by a total of NT$10 billion in the next five years, but that will still not offset rising fuel costs, he said.

Chang said he has often demanded Taipower management run the company as if it were a private enterprise rather than a state-run utility, requiring each of its units to give top priority to cost effectiveness.

The minister also maintained that the electricity business must be liberalized in the future, that is Taipower must be free of its political burden and the responsibility to promote government policies.

Taipower must not continue to be burdened with sponsoring public events, sports teams and social welfare, as well as subsidizing electricity use by state businesses, he said, adding that the government must find other financial sources, such as a portion of the central government's annual budget, for such spending.

Chang left the government eight years ago, but returned as economics minister in February this year. He noted that he has often felt frustrated since his return because of what he called unfair criticism by a section of the media.

He said many policies have already achieved a consensus among the general public, but the government has been finding it very difficult to implement them because of objections from small groups of people.