THE LONG-TERM ENERGY SUPPLY

AND DEMAND OUTLOOK IN TAIWAN

ENERGY COMMISSIONMINISTRY OF ECONOMIC AFFAIRS

AUGUST 2001

MOEA

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Contents

I. Energy Demand and Supply in Taiwan

II. Current Energy Policy

III. Key Issues and Challenges

IV. Closing Remarks

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I. Energy Demand and Supply I. Energy Demand and Supply

in Taiwanin Taiwan

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1. Structure of Energy Supply106.3

Million KLOE

Coal

Petroleum

Natural Gas

NuclearHydro

Percentage of Imported Energy in 2000 : 97%

Average Annual Growth Rate from 1980 to 2000 : 5.8%

1980 2000 yearDependence on imports:

86.4% 97.1%

2 7

51

31

9%

58.6

Million KLOE

34.3Million KLOE

93.4%

1990

6 %267115

14 %44

55

23

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2. Structure of Energy Consumption - by energy forms90.9

52

29.6

Million KLOE

Million KLOE

Million KLOE

1980 2000 year1990

Coal

Petroleum

Natural Gas

Electricity

Total yearly electricity consumption increases

34 % 6

52 8

40 %

3

44

13

49

3

37

11

%

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3. Structure of Energy Consumption - by sectors

90.9

52

29.6

Million KLOE

Million KLOE

Million KLOE

1980 2000 year1990

Industrial

Transportation

Agricultural

Residential

Commercial

OthersNon-energy Use

Energy consumption by the industrial, residential, and transportation sectors has increased substantially since 1980.

2%632

10 %12

65

2% 6 3 411 6

58

3% 6 2 6

12

16

55

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4. Installed Capacity of Power Stations

1990 - 2000 Average Annual Growth RateTotal Installed Capacity: 7.3%Peak Load: 5.9%

Reserve Margin: 8.2 % 7.4 % 12.6 %1980 1990 2000

IPP

Cogeneration

Nuclear

Hydro

Gas-Fired

Oil-Fired

Coal-Fired

17,809MW

9,056MW

34,773MW

14%155911

5 % 291442721

6 %

15

15

13

13

15

23

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5. Forecast of Energy Supply

-5

15

35

55

75

95

115

135

155

175

2000 2010 2020

Coal Petroleum Natural Gas Hydro Power Nuclear Power New Energy

Million KLOE

year

138.6

106.2

167.1

9.62.27.1

54.6

32.7

2.3

13.02.819.6

70.3

30.6

4.3

19.62.9

24.0

78.7

37.6

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6. Forecast of Energy Demand

10 9.4 8.8

33.9 45.257.4

2.85.4

8.144.2

53.5

73.72.1

2.7

0

20

40

60

80

100

120

140

160

2000 2010 2020

Coal Petroleum Natural Gas Electricity New Energy

Million KLOE

90.9

115.9150.7

year

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II. Current Energy PolicyII. Current Energy Policy

Stabilizing Energy Supply

Increasing Energy

Efficiency

Deregulating Energy

Enterprises

EnhancingEnergy Safety and

EnvironmentalProtection

ReinforcingEnergy Researchand Development

Promoting Energy Education and

Dissemination

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1.Intensification of integrated energy planning.

2.Promotion of diversification of primary energy.

3.Construction of energy infrastructure.

4.Maintenance of proper energy security stockpile.

5.Promotion of exploration in energy resources.

Increasing Energy

Efficiency

EnhancingEnergy Safety and

EnvironmentalProtection

Stabilizing Energy Supply

ReinforcingEnergy Researchand Development

Promoting Energy Education and

Dissemination

Policyguidelines

Policy contents

Deregulating Energy

Enterprises

Free, Orderly, Efficient, and Clean Energy Demand and Supply System

Master goal

1.Promotion of energy education in schools, industry and to the public.

2.Training professional personnel.

1.Enhancement of energy safety.

2.Active introduction of clean energy.

3.Promotion of high-efficiency and low pollution equipment and technologies.

4.Formulation of appropriate strategies to cope with the development of international environ-mental protection.

1.Promotion of R&D in energy conservation technologies.

2.Promoting the application of new and renewable energies.

3.Strengthening international cooperation.

1.Revision of related laws and regulations.

2.Establishment of a fair and competitive environment.

3.Promotion of the liberalization and privatization of energy enterprises.

1.Enhancement of energy productivity.

2.Stress on energy conservation.

3.Laissez faire determination of market mechanism.

4.Reasonable reflection of social cost in energy prices.

Change in Energy Situation Trend in Deregulating Energy Enterprises Pressure in Environmental Protection

Energy Policy

Back-ground

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III. Key Issues and ChallengesIII. Key Issues and Challenges

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1. Major Conclusions of National Energy Conference

To prioritize the implementation of energy conservation and promotion of energy efficiency, as "no regret strategy", with target of 28% energy saving by year 2020.

To promote the use of LNG, from annual consumption of 3.9 million tons in 1998 to 13 million tons in 2010. The price difference between natural gas and coal will be reduced.

To promote the use of co-generation, renewable energy, hydropower, and also to increase the weight of clean energy in energy portfolio.

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Set the structure of the primary energy supply for the year 2020 at

Coal 27-30%

Petroleum 37-40%

National Gas 14-16%

Hydro 1-3%

Nuclear 13-15%

New Energy 1-3%.

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Set the structure of the installed capacity for the year 2020 at

Coal-fired 35-37%

Oil-fired 4-5%

Gas-fired 27-29%

Hydro 9-11%

Nuclear 19-20%

New Energy 1-3%.

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1. Deregulating Energy Enterprises: Within three months after the legislature approves

the Petroleum Administration Law, all varieties of oil products shall be allowed to import.

The revised draft of the Electricity Law will widely open the operating pattern of power generation. When the legislature approves the draft, the monopoly of Taiwan Power Company will be eliminated.

2. Key Issues and Challenges

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2. Augmenting Research & Development on Renewable Energy: Implementing the Measures for Promoting Solar W

ater-Heating Systems (15-20% subsidized)

Implementing the Measures for Promoting Solar Photovoltaic Systems (up to 50% subsidized)

Implementing the Measures for Promoting Wind-Power Generators (up to 50% subsidized)

Formulating the law and the program for developing renewable energy respectively

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3. Strengthening Energy Efficiency & Energy Conservation: Establishing an energy efficiency index and

auditing systemImplementing an auditing system for energy

usersRaising the energy efficiency standards of

equipment and revise fuel economy standards for vehicles

4. Establishing a Nuclear-Free Taiwan:Formulating a statute for the early decommission

of the existing three nuclear power plants

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5.Promoting Privatization of Electricity Sector :

On September 3,1994, the MOEA published the

"Guidelines for the Opening of the

Independent Power Generation Industry". The MOEA then called for IPP projects in

January 1995, August 1995, and January 1999, respectively. So far, eight IPP projects with a total capacity of 7,220 MW have begun operation or are under construction.

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The energy policy in Taiwan aims at sustainable development through the integration of the 3E (economic development, environmental protection, and energy security).

Our priorities are to promote energy conservation, energy efficiency, and open market, thereby strengthening our international competitiveness.

We welcome international energy cooperation to achieve these common goals.

IV. Closing RemarksIV. Closing Remarks

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THANK YOU

ENERGY

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