Taiwan Power Company (台灣電力公司)

Taipower is adapting parts of its business model to the low-carbon economy. It is expanding its renewables portfolio, from 2.11 GW in 2018 (6.4% of total 2018 capacity) to 3.05 GW by 2025 and 5.4 GW by 2030. It is supporting this with investment totalling approximately US$14 billion between 2015 and 2030. The impact of this on emissions may be limited by the decommissioning of nuclear electricity generation assets and further growth of gas and coal capacity. Taipower has also set a target for 2030 to achieve smart electricity management coverage of 82% and installation of smart meters in 6 million households. This will further enable its demand-side management services, which helped reduced the daily peak demand in 2018 by 3.93 GW.

Taipower has a target to reduce emissions intensity by 7% by 2021, 15% by 2025 and 20% by 2030, compared to a 2016 baseline. However, this target only covers thermal (fossil fuel) unit intensity and does not include its nuclear or renewable generation. Consequently, this target could not be assessed in the performance assessment as it excludes a significant proportion of Taipower’s generation, though it was considered in the narrative and trend assessments. This target is likely to incentivise efficiency improvements and a shift from coal to gas but will not reflect any renewable generation Taipower develops. Also, given the lack of clear plans to develop carbon capture and storage, the development of new gas generation will not guarantee long-term decarbonisation. Taipower should establish a science-based target covering all its generation, with a long time horizon to enable strategic consideration of the lifetime impact of current and planned coal and gas assets on its decarbonisation.

Taipower set a target of investing approximately 0.53% of its revenue in ‘energy saving, carbon reduction and green power industry research’ in 2019. This provides an opportunity to publicly disclose the amount it invests in low-carbon R&D, thereby demonstrating its commitment to bringing the most innovative technology to market. It should also provide a breakdown of mature and non-mature technologies and aim for 5% of its capital expenditure to be invested in low-carbon R&D. Taipower’s current low-carbon R&D includes innovative projects such as a renewable energy forecasting system and an offshore wind monitoring system.

Taipower is continuing to build new gas electricity generation assets, with expected lifetimes into the 2050s and 2060s. Locked-in emissions from current and planned coal and gas assets mean the company is expected to exceed its carbon budget. Indeed, Taipower’s annual absolute emissions are expected to rise from 120 MtCO2e in 2018 to a peak of 129 MtCO2e in 2026, whereas the decarbonisation pathway expects emissions to fall to 90 MtCO2e in 2026. Since Taipower lacks a clear plan to implement carbon capture and storage, stronger climate policy could make its coal and gas generation stranded assets, which have premature write-downs or devaluations.

Taipower has set targets to reduce the emissions intensity of its thermal units (coal and gas-fired power plants) by 20% by 2030, as compared to 2016. Additionally, it has renewable capacity targets of 3.05 GW by 2025 and 5.4 GW by 2030. It also has targets for smart management, circular innovation and air pollution.

Taipower’s focus will be on reducing coal use and increasing gas use and renewable energy. It will be decommissioning older coal, oil and nuclear plants and adding gas capacity. The company is investing approximately US$14 billion in renewable energy between 2015 and 2030, and has set short-term, intermediary targets for all its commitments.

Taipower is upgrading to more efficient coal generation units and is constructing new gas generation as well as offshore wind and solar. The company recently established a business to sell its self-generated renewable electricity on the ‘green electricity’ market.

Taipower’s emissions intensity rose from 497 gCO2e/kWh in 2013 to 537 gCO2e/kWh in 2018. This was driven by an increasing share of coal and gas in the company’s electricity generation and a reduced share of nuclear. Social acceptance of nuclear power has fallen in Taiwan since Fukushima, and the government is not building or extending the lifespan of nuclear power plants.

Taipower has a detailed transition plan, which includes consideration of the future generation mix and a commitment to invest approximately US$14 billion in renewable energy between 2015 and 2030. However, the company’s emissions intensity target only covers its thermal units. In the absence of a clear plan for carbon capture and storage, it is unlikely this target will drive long-term decarbonisation.