Taipower to spend up to US$9bn on grid upgrade














BLOOMBERG
Thursday, Sep 10, 2009, Page 11

Taiwan Power Co (Taipower, 台電), the nation’s monopoly electricity retailer, plans to spend as much as NT$300 billion (US$9.2 billion) to expand and upgrade its grid in the next six years, betting on a rebound in demand from factories.

The government has approved a budget of NT$40.8 billion for the project next year, while investment for the following years is yet to be decided, Chang Chung-liang (張忠良), director of system planning at the Taipei-based unlisted company, said in an interview on Tuesday.

A total of between NT$200 billion and NT$300 billion may be spent on the expansion, he said.

Taipower is building lines and modernizing its network to ensure supplies to factories run by companies such as Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電) once the economic recovery spurs demand for computer chips. Power consumption in Taiwan is expected to rise, growing 2.5 percent to 3 percent annually, after slumping this year, chief engineer Tu Yueh-yuan (杜悅元) said.

“We need to have a plan for our grid ready for the future,” Tu said in the same interview on Tuesday.

The project may bring contracts for equipment suppliers and cable makers including Tatung Co (大同), Shihlin Electric & Engineering Corp (士林電機) and Walsin Lihwa Corp (華新麗華), Chang said.

Taipower aims to make its network “smarter,” or more flexible and efficient in response to changes in electricity demand by upgrading computers and software, Chang said.

The utility will also build its first undersea electricity cable, a 61km link between Taiwan’s main island and the Penghu archipelago to the west, he said.

The cable will allow Taipower to build more power stations on Penghu and transmit electricity to the main island.

The utility’s sales declined 9.8 percent in the seven months to July from a year earlier amid a recession, a company newsletter said.

Taipower expects Taiwan’s power demand to return to growth as the economy improves, Tu said.

Taipower to Spend Up to $9 Billion on Grid Upgrade (Update1)



By Yu-huay Sun

Sept. 9 (Bloomberg) -- Taiwan Power Co., the island’s monopoly electricity retailer, plans to spend as much as NT$300 billion ($9 billion) to expand and upgrade its grid in the next six years, betting on a rebound in demand from factories.

The government has approved a budget of NT$40.8 billion for the project in 2010, while investment for the following years is yet to be decided, Chang Chung-liang, director of system planning at the Taipei-based unlisted company, said in an interview yesterday. A total of between NT$200 billion and NT$300 billion may be spent on the expansion, he said.

The utility known as Taipower is building lines and modernizing its network to ensure supplies to factories run by companies such as Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. once the economic recovery spurs demand for computer chips. Power consumption in Taiwan is expected to rise, growing 2.5 percent to 3 percent annually, after slumping this year, Chief Engineer Tu Yueh-yuan said.

“We need to have a plan for our grid ready for the future,” Tu said in the same interview in Taipei yesterday.

The project may bring contracts for equipment suppliers and cable makers including Tatung Co., Shihlin Electric & Engineering Corp. and Walsin Lihwa Corp., according to Chang.

“The spending will help boost the nation’s economy, and improved lines can reduce electricity losses during transmission,” said Chen Shih Hau, deputy director of energy studies at Taiwan Institute of Economic Research in Taipei.

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

Smart Grid

Taipower aims to make its network “smarter,” or more flexible and efficient in response to changes in electricity demand by upgrading computers and software, Chang said.

The utility will also build its first undersea electricity cable, a 61-kilometer (38-mile) link between Taiwan’s main island and the Penghu archipelago to its west, he said. The cable will allow Taipower to build more power stations on Penghu and transmit electricity to the main island.

The utility’s sales declined 9.8 percent in the seven months to July from a year earlier amid a recession, according to a company newsletter. Taipower expects Taiwan’s power demand to return to growth as the economy improves, Tu said.

Taiwan may return to growth in the fourth quarter following five straight quarters of contraction, the state statistics bureau said last month.

Taiwan Semiconductor and United Microelectronics are the world’s two biggest contract chipmakers.