In order to secure the stability of fuel supply, Taipower has adopted the following strategies on fuel procurement:

■ Short-Term Strategies

● Diversifying fuel supply sources.

● Establishing a safety inventory.

● Basing strategies on term contracts for supply.

● Stabilizing coal shipping operation and cost and expanding the Taipower-owned shipping fleet. Taipower has ordered the construction of 4 more new coal vessels which will all be delivered by the end of 2011 to upgrade fuel supply stability. Starting from 2012, the annual carrying capacity will be about 8 million tons. The rate of shipment by Taipower-owned vessels will reach 30%.

■ Mid- and Long-Term Strategies

● Seeking opportunities to invest in overseas coal development projects and setting up the goal of one third of the coal demand to be supplied by the coal mines in which Taipower holds investment.Currently, Taipower has successfully taken a 10% interest in Bengalla coal mine in Australia which produces around 7.8 million metric tons of ROM coal per annum. Bengalla joint-venture participants unanimously approved the first phase development of the project on November 30, 2010 to expand annual production capacity from the current 7.8 million tons to 9.3 million tons in 2012. As of the end of 2010, Taipower's profit from Bengalla project reached NT$2.1 billion.

● Introducing advanced nuclear fuel design to enhance the effectiveness and reliability of the utilization of nuclear fuels.

● Reinforcing long-term supply stability. Taipower itself intends to import a certain amount of its own natural gas demand and build its own LNG receiving terminal once the common-carrier system for natural gas is approved by the government.

● Strengthening fuel coal supply stability.