Letter from the Chairman and the President
The past few years have seen Taipower come under mounting pressure on many fronts: the inability of tariff schedules to reflect rising fuel costs, the difficulty involved in promoting power construction, the continued challenge of GHG emission reduction, and various other challenges. The 3-11 Fukushima nuclear accident that happened in Japan in 2011 leading to the new energy policy unveiled by the government at the end of 2011 added even more to the company’s management challenges and uncertainty.
Owing to the fact that tariff schedules couldn’t reasonably reflect various management costs, Taipower suffered a loss of NT$43.3 billion in 2011. The accumulated loss listed on the financial statement reached NT$117.9 billion. The company’s financial status has thus been worsening year by year. Thanks to the concerted efforts of all Taipower employees to bravely confront such adversities, the company is finding new ways to expand sources of income and reduce expenditures. In 2011, the following various outstanding accomplishments were achieved, including:
■ Energy sales and peak load both set new company records. Energy sales reached 198,637 GWh, a 2.8% increase over the previous year and peak load reached 33,787 MW, a 2.3% increase over the previous year.
■ The net thermal efficiency of all thermal power plants reached 37.99% (HHV net), and the power supply reached 115,200 GWh. The power generation of the 6 nuclear units amounted to 40,522 GWh. All of the above 3 figures were new company records.
■ The Taichung Thermal Power Plant Unit 2 operated continuously for 708 days from December 20, 2009 to November 28, 2011, breaking the record of the longest continual operation period for steam units. The nuclear units kept the same record of 2010 with no scrams occurring throughout 2011. This demonstrates Taipower’s remarkable achievements in nuclear operational safety.
■ The Youngan Salt Beach Solar Power Station was completed with a total installed capacity of 4.6 MW, the largest one in Taiwan. It can reduce 3,624 tons of CO 2 emissions annually. The project is truly a landmark renewable energy project.
■ The amount of low-level radwaste reduction demonstrated a remarkable achievement. In 2011, the production of solidification and non-solidified radwaste of the 3 nuclear power plants was 162 and 2,615 drums, respectively. After being treated by volume reduction facilities, the 2,615 drums of non-solidified radwaste will be reduced to about 564 drums, which will reduce the total amount of radwaste to 726 drums. This was the lowest record in Taipower’s history.
Power Transmission and Distribution Systems
In 2011, in regard to the transmission system, 7 substations, a length of 349 ckt-km of transmission lines, and main transformers with a apacity of 4,224 MVA were completed. In terms of the distribution system, 1,574 automated feeders were completed. The total number of feeders being automated reached 6,351, accounting for more than 68% of the total. This improvement can greatly reduce the duration of forced power outage.
Power Supply Quality
The SAIDI (System Average Interruption Duration Index) was 18.224 min./customer-year and the SAIFI (System Average Interruption Frequency Index) was 0.204 freq./customer-year. Both were the second-best records in Taipower’s history. Despite the increase of power supply from the south to the north, the line loss was controlled at a high standard of 4.76%.
Per employee average kWh sales increased from 8.55 GWh in 2010 to 8.79 GWh in 2011, at a growth rate of 2.9%. Per employee average revenue increased from NT$22.60 million to NT$23.17 million, at a growth rate of 2.5%.
ERP System Officially Online
In order to upgrade management efficiency, Taipower proactively introduced the ERP system to the company. The first release of the first phase was officially put online in November 2011. Based on this foundation, the company will continue to promote the 2nd and 3rd releases of the first phase. These actions are taken in the hope that the 3 releases of the first phase will be smoothly put online in 2012, thereby establishing a significant milestone in the company’s corporatized management.
Other Outstanding Achievements
■ The Taipower 2011 Sustainability Report was awarded a gold medal in the non-manufacturing category in the “2011 Taiwan Corporate Sustainability Report Awards” held by the Taiwan Institute of Sustainable Energy. This was the best performance among the national enterprises.
■ Asian Power magazine held the “Asian Power Awards 2011” in Singapore. Taipower was awarded with a gold medal for the “Most Innovative Power Technology of the Year” –Development of a Lightning Strike Information Platform for Transmission Lines Using Google Maps, and was awarded with a silver medal for the “Asian Power Plant of the Year”- Tatan Gas Combined-Cycle Power Project.
■ In the “Doing Business 2012” report released by the World Bank, in the newly set indicator “getting electricity”, Taiwan was ranked 3rd globally among the 183 economies worldwide and the 1st in Asia. In response, the Council for Economic Planning and Development, Executive Yuan sent a letter recognizing the dedication of Taipower employees that helped bring about such positive transformation in the local business environment.
President Ma Ying-jeou announced our new national energy policy in November 2011, with the following highlights: based on the principles of “no power rationing, maintaining reasonable power prices, and fulfilling the nation’s commitment to the international community to reduce carbon emissions”, the government shall promote an energy development vision of “ensuring nuclear safety, gradually reducing reliance on nuclear power, and creating a low-carbon economy in order to gradually become a nuclear-free country”. Furthermore, he specified that there will be no life extension for the 3 nuclear power plants and that the Lungmen Nuclear Power Plant currently under construction will not start commercial operation until all the safety elements have been ensured. Taipower will comply with this new policy to formulate a main direction for long-term strategic planning. For the power supply-side, natural gas power generation will be expanded, the use of renewable energy will be maximized and nuclear safety will be ensured. For the power consumption-side, demand-side management and reasonable tariff schedules will be promoted, and the following measures will be actively undertaken:
■ Improving Energy Source Mixture
Taipower proactively continues to promote retrofit projects in its Linkou, Tunghsiao, and Shenao Thermal Power Plants, as well as strengthen the monitoring of the construction quality of the Lungmen Nuclear Power Project to substantiate nuclear safety, reinforce control on important checkpoints and complete the project based on the premise that nuclear safety must be ensured. Completion of the project will increase the ratio of energy source for base load. In the meantime, the company is engaged in the development of the integration of renewable energy power generation along with the power grid and related technologies, such as energy storage facilities. With the gradually increasing ratio of renewable energy power generation, the power supply quality can be maintained.
■ Complying with Government Policy to Promote a Smart Grid
Taipower is responsible for implementing the major part of the “National Smart Grid Master Plan” set up by the Bureau of Energy, MOEA , including the establishment of an Advanced Metering Infrastructure (AMI). The company will carefully review the possible and foreseeable problems involved in carrying out the “Taipower Smart Grid 5-year Implementation Plan” and collect comprehensive operation information to evaluate its cost-effectiveness. The results will serve as a basis for making adjustments during implementation so that the plan can be promoted in an orderly and pragmatically fashion.
■ Promoting Energy Conservation and Carbon Reduction
In order to fulfill mid- and long-term carbon reduction goals, the company will map out the steps involved in the promotion of mid- and long-term strategic directions and target milestones of key items required to achieve energy conservation and carbon reduction. Taipower will uphold the concept of cost-effectiveness to systematically and efficiently promote the implementation of significant technologies and important issues, including smart grid, remote islets wind power, biomass energy, carbon capture and storage (CCS), demand-side management, reasonable tariff schedules, etc.
■ Improving Financial Structure
Owing to the fact that tariff schedules cannot completely reflect costs, and self-owned capital is seriously insufficient, the company has to ask for a loan to compensate the deficiency. The company’s financial structure has been continually worsening. Reasonable tariff schedules are the fundamental solution to this financial adversity. In the future, Taipower will draw up timetables that suit its proposals and establish a more precise model for evaluating the trend of tariff schedules in order to provide necessary information to the public, enabling them to understand the necessity of reasonable tariff schedules. Taipower will work with the government to enact timely adjustment of reasonable tariff schedules.
■ Introducing New TechnologiesThe company’s R&D and application of low-carbon power technologies includes the following 6 important categories: ①advanced material and water treatment of ultra supercritical power generation, ②clean coal generation testing and evaluation, ③CO 2 capture and storage and microalgae CO 2 fixation, ④renewable energy and distributed power energy, ⑤power storage and ⑥smart power grid. In addition to making timely application transformation in line with the maturity of new technologies, it is important that Taipower should do its utmost to position itself as a leader in low-carbon power generation.
Taipower is a state-run enterprise and a public utility. In addition to its corporate goals, the company also bears a political mission and social responsibility. The company should cope with changes in the operation environment and abide by the government policy to make adjustment to the company’s management goals and strategies at proper times. In light of the aforementioned financial difficulties and the government’s new energy policy, and despite the power industry being confronted with unprecedented challenges and tests, Taipower employees will maintain their high commitment to the company’s mission and the good tradition of offering service to the public. We will work together wholeheartedly to improve management efficiency, enhance power supply quality, fulfill social responsibility and upgrade the corporate image, setting a good foundation for sustainable management development.