The Cabinet has approved a series of new measures aimed at partially deregulating the power market.
The measures, approved Thursday, are also expected to rationalize electricity prices, raise efficiency in the power industry and promote consumers’ rights.
Under previous regulations, independent power producers could only sell to Taiwan Power Company (Taipower), Taiwan’s public utility company. Consumers were also restricted to buying electicity from Taipower.
The new rules will leave Taipower in charge of Taiwan’s existing power grid, but allow independent power generators to enter directly into power supplying contracts with consumers.
On Thursday, Deputy Director-General of the Bureau of Energy Wu Yu-chen explained the system the new rules will create in detail.
"The power generation industry will be opened up to competition. Private generators can choose to sell to Taipower, or they can sign contracts directly with consumers with the right to choose their power supplier," said Wu.
"They will determine the price of their power. As for supplying power, they can set up their own power lines if the distances are short. If the cost of setting up their own lines is too high, they can route the power through Taipower’s grid. Of course, they will have to cover the costs of using Taipower’s lines. Power sellers can match up independent generators and consumers who have the right to choose suppliers."
Only Taipower will be able to generate nuclear and hydroelectric power in Taiwan, but private enterprises and companies financed with foreign capital will be allowed to generate power by other means. Only companies funded with Chinese capital will be locked out of the market.
The new rules also set up a government body to monitor competition, ensure fair use of the power grid and regulate prices.