The Taiwanese state power company Taipower has said this week that it will not increase electricity prices before the end of this year in order to help Taiwan’s sluggish economy recover.

Facing pressure from the depreciating Taiwan currency and rising fuel prices, Taipower said it would absorb these increasing costs and then evaluate the situation after the end of this year to decide on its next step.

A Taipower official said it could not achieve the profit goal of NT$26 billion ($741.6 million) set for this year without price hikes. However, in consideration of the effects of higher electricity prices on Taiwan’s economy, the firm has decided not to raise electricity prices this year, he added.

Compared to other Asian countries, Taiwan weathered the financial crisis of 1997-98 well but has not been immune from the economic pressures felt by the region.

Taiwan plans to privatize Taipower, with generating assets being split up and some outside investment permitted in the electric transmission and distribution sector. Progress towards this has been slow although measures introduced in 1994 have allowed Independent Power Producers (IPPs) to provide up to 20 per cent of Taiwan’s electricity. IPPs are obliged to sell electricity to Taipower.

Figures available from Taipower indicate installed capacity of 29 634 MW at the end of 2000 of which 68 per cent was thermal and 17 per cent nuclear. The remaining production is from hydroelectric facilities. Both the nuclear and hydropower plants will remain under the control of Taipower following privatization.