Taipower to use less gas as tariffs cut power demand

The state-run utility will probably use 4.38 million metric tons of gas, less than the 5.58 million tons forecast previously, Chief Engineer Tu Yueh-yuan said by phone in Taipei yesterday.

Taiwan Power, known as Taipower, raised prices by 12.6 percent in July, leading to a 6 percent drop in the island’s electricity use that month from a year ago.

The power producer plans to increase tariffs by an additional 12.6 percent in October to better reflect fuel costs. The cost of importing liquefied natural gas soared 30 percent in the first half.

“We cut our fuel consumption forecast because electricity sales are lower than projections,” Tu said yesterday.

Taipower’s oil demand this year may total 2.45 million kiloliters, about 15.4 million barrels, less than the 3.48 million kiloliters forecast late last year, according to Tu.

The cost of fuel oil containing a maximum sulfur content of 0.5 percent climbed 30 percent in June from a year earlier, the Bureau of Energy said in a faxed statement last week.

Natural gas-fired generators accounted for 33 percent of the island’s installed capacity as of June, coal-fueled plants 31 percent and oil-fired plants 9.5 percent, Taipower said on its Web site. Nuclear reactors had a 14 percent share.

Taipower’s forecast for coal consumption remained unchanged, according to Tu, who said in December the company may need 27.5 million tons in 2008. Taiwan’s power producers paid 70 percent more for coal than a year earlier in the first half, the energy bureau said.

The utility’s new fuel demand forecast is based on the assumption that Taiwan’s electricity demand in 2008 will be little changed from last year, she said. Taipower’s electricity sales grew at an average 4.4 percent annually over the past five years, according to the company’s Web site.

The administration of President Ma Ying-jeou, who took office in May, allowed Taipower to raised tariffs for the first time in two years in July after the company posted a loss of NT$47.9 billion between January and May.

The government owns 97 percent of the utility, which generates about 75 percent of the electricity the island uses and monopolizes transmission in Taiwan.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 259 Fahrenheit), for transportation by ship to destinations not connected by pipeline.

On arrival, it’s turned back into gas for distribution to power plants, factories and households.

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