Taiwan’s Ministry of Economic Affairs, cited by Bloomberg, this week announced an upcoming increase in electricity tariffs for industrial consumers from mid-October. On average, the increase will reach 12.5%, this will be the second such step by electricity suppliers since the beginning of the year; the last time tariffs were increased was in April.
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TSMC, as one of the flagships of the Taiwanese industry, will also face an increase in electricity tariffs, and since the bulk of its enterprises are concentrated in Taiwan, the increase in costs will inevitably be transferred to one degree or another to the cost of its products. Taiwan authorities expect local industry energy consumption to grow at an average rate of 2.8% per year over the next ten years. In April of this year, electricity tariffs for industrial consumers in Taiwan were already increasing by 15–25%.
The energy company Taiwan Power has been forced to operate at a loss over the past two years, since it uses mainly imported raw materials to generate electricity, and its cost has increased significantly. At the same time, the island authorities did not allow a proportional increase in electricity tariffs, which is why losses were generated. At the end of last year, they exceeded $6.2 billion. Recently, the cost of imported energy resources has decreased, but it still remains at a level exceeding the values at the beginning of 2022. The rate of growth in electricity tariffs on the island over time has lagged behind other countries, as noted by Taiwanese officials. Taiwan is also set to shut down its nuclear reactor next May, adding to the woes of the local energy industry.