Taiwan raises electricity rates from October

TAIWAN, home to some of the world’s biggest chipmakers, will raise its electricity rates again from mid-October in a move that will impact the island’s industrial users.

Industries will face an average 12.5 per cent hike in power prices, said Taiwan’s Economics Ministry on Monday (Sep 30). The decision will push up prices for bigger users, including Taiwan Semiconductor Manufacturing Company (TSMC).

The increase comes as the island expects power consumption to grow by an average of 2.8 per cent a year until 2033, mainly due to demand from the artificial intelligence sector.

Taiwan last raised its power rates in April, when industrial users saw their power bills go up 15 to 25 per cent. TSMC had the highest increase, which was expected to weigh on the company’s bottom line. 

State utility Taiwan Power faced hefty losses over the past two years as it tried to keep prices low, even as fuel grew more expensive. The utility announced a second consecutive annual loss of NT$198.5 billion (S$8 billion) in 2023, after an even greater shortfall in 2022.

Taiwan Power blamed its losses on the sharp rise in international fuel costs, following Russia’s invasion of Ukraine.

Although those prices have fallen, they are still higher than before the war, the utility company said last week. Compared with the rest of the world, Taiwan’s tariff adjustments are slower, it added. 

The island is largely reliant on imported coal and gas to power its tech-dominated economy.

Efforts to build out new energy such as offshore wind, which the island is betting on to diversify its energy mix, are facing increasing delays and challenges.

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The island will also shut its final nuclear reactor next May. BLOOMBERG