Formulation of Purchase Price
07/12/22
Renewable energy
Renewable energy purchase price will be made in accordance with the "Renewable Energy Development Act," its sub-laws and agreements.
Applicable to a uniform price system (wind and solar power):
Purchasing fee = Purchasing rate (NT$/Per kWh) × Generation of Power Equipment (kWh)
Applicable to two-part tariff (Reservoir Power Plant)
Purchasing fee = Capacity fee + Energy fee
Capacity fee = Capacity rate × Purchased capacity
Energy fee = Energy rate × Generation of Power Equipment (kWh)
Independent Power Plant (IPP)
| Phase |
Price Determination Method |
Selected operator |
| Ⅰ&Ⅱ |
Taipower handles the bidding and bidding operations after the evaluation held by the MOEA, and each unit's competition is lower than the reserve price to win the bid |
Coal plant:
Mailiao, Ho-Ping
LNG plant:
Ever Power, Chia-Hui, Hsin-Tao |
| Ⅲ |
Taipower announces price after the evaluation held by the MOEA |
LNG plant:
Kuo-Kuang, Star Energy, Sun-Ba, Hsing-Yuan |
| Ⅳ |
Taipower handles the bidding and bidding operations after the evaluation held by the MOEA, and each unit's competition is lower than the reserve price to win the bid |
None |
| The project of commercial operation in 2020 |
Taipower handles the bidding and bidding operations in accordance with the Government Procurement Law, and each unit's competition is lower than the reserve price to win the bid |
LNG plant:
Chia-HuiⅡ |
Remark: Regardless the bidding basic price or the announced price, the power generation cost (avoided cost) of the equivalent power supply unit (coal or combined cycle unit of natural gas) of Taipower is determined by the setting-up relevant parameters, such as depreciation period and return on investment.
The Structure of Purchasing Rate
In order to stabilize the operation of IPPs, Taipower adopted fixed rate to capital expenses in agreements, and a mechanism for annual adjustment of fuel cost, operating and maintenance cost and subsidies.
- Capital expense: The cost of constructing a power plant is calculated by the estimated cost of capital (the discount rate) based on the average cost of the lifespan of a generator for 25 years.
- Fuel Costs: The coal power plants are adjusted annually according to the cost of coal-fired heat value last year; the LNG power plants are adjusted according to the latest cost of the natural gas price from CPC.
- Fixed (or variable) operating and maintenance costs are adjusted by annual Wholesale Price Index.
- Power Development Assistance Funds:
- Phase Ⅰ,Ⅱ, Ⅲ and Ⅳ: Adjust according to the average unit price of electricity purchased in the previous year and the allocation standard stipulated in the "Enforcement Guidelines for Promote Power Development Operations and Assistance Operations of Taiwan Power Company."
- The project of commercial operation in 2020: According to the "Regulations Governing the Use of Fund to Facilitate the Development of Electric Power" and the contribution rate stipulated in the "Percentage Allocation of Fund to Facilitate the Development of Electric Power on Electricity Generation, Transformation and Distribution Facilities" announced by the Ministry of Economic Affairs(MOEA).
The above-mentioned pricing mechanism of the IPPs power purchase rate is clearly stated in the agreement, as the basis of power purchase and sale. The formal agreement and its template are reported to the Competent authority (MOEA) for verification.
Cogeneration
The fee is calculated by the announced purchasing rate (transmission, distribution and operating fee is considered) of the Regulation of Cogeneration.
Non-firm capacity of Peak period
Purchasing rate = Energy rate
Purchasing fee = Energy rate (NT$/ Per kWh) × Generation of Power Equipment (kWh)
Firm capacity of Peak period
Purchasing rate = Capacity rate + Energy rate
Purchasing fee = Capacity rate (NT$/Per kW) × Reliability-firm Capacity (Per kW) + Energy rate (NT$/ Per kWh) × Generation of Power Equipment (kWh)