In a move to maintain economic stability and control inflation, the Ministry of Economic Affairs (MOEA) announced that electricity rates will remain unchanged for the first half of 2025. The decision, made unanimously by the Electricity Price Review Committee, is intended to shield consumers and industries from rising costs due to global economic uncertainty.
Electricity Rates to Remain Steady Despite Taipower’s Mounting Losses
The Electricity Price Review Committee met on Friday to discuss the adjustment of electricity tariffs for the first half of 2025. After thorough deliberation, the committee unanimously decided to freeze rates, citing global economic fluctuations, geopolitical risks, and commodity price instability as primary concerns.
According to Deputy Minister of Economic Affairs Lai Chien-hsin (賴建信), the global energy crisis, geopolitical conflicts, and changes in international tariff policies have created a volatile economic environment. The committee, therefore, deemed it necessary to keep electricity prices stable to support businesses and consumers, ensuring Taiwan’s economic competitiveness.
Despite the soaring costs of energy procurement, the government will continue to subsidize Taiwan Power Company (Taipower), the state-owned electricity provider, which has already accumulated a staggering NT$422.9 billion (US$12.76 billion) in losses by the end of 2024 due to bearing the cost burden.
Why Taiwan is Freezing Electricity Rates?
Many countries have resorted to electricity price hikes in response to rising fuel costs. Between 2022 and 2024, global fuel prices surged, causing electricity bills to skyrocket in various nations. However, Taiwan has adopted a more conservative approach, implementing only moderate adjustments to electricity prices to shield households and industries from financial strain.
The government’s rationale for keeping electricity rates unchanged includes:
- Economic Stability – Avoiding a rise in electricity costs helps control inflation and maintain affordability for consumers and businesses.
- Industrial Competitiveness – Stable energy prices ensure that Taiwan’s industrial sector remains competitive in the global market.
- Geopolitical Uncertainty – The government is cautious due to potential global trade tensions, conflicts, and changes in international policies.
Government’s Plan to Support Taipower’s Financial Crisis
As a result of keeping rates low while energy costs remain high, Taipower has suffered massive losses. The Executive Yuan is now seeking approval from the Legislature for an additional NT$100 billion budget in 2024 to help ease Taipower’s financial burden.
Premier Cho Jung-tai (卓榮泰) expressed his gratitude to Taipower for cooperating with government policies that have kept Taiwan’s inflation rate moderate compared to other countries. He also emphasized that price stabilization remains a priority for his administration.
“The government will continue working on financial aid for Taipower to ensure it can maintain stable operations while protecting consumers from electricity price fluctuations,” said Executive Yuan spokesperson Michelle Lee (李慧芝).
Current Electricity Rates in Taiwan
As electricity prices remain unchanged, the official rates for the first half of 2025 are as follows:
| Category | Rate (NT$/kWh) |
|---|---|
| Household Electricity | NT$2.77 |
| Industrial Electricity | NT$4.27 |
| Average Rate | NT$3.7556 |
These rates reflect the government’s commitment to affordability while balancing Taipower’s financial strain.
Potential Risks of Maintaining the Rate Freeze
While freezing electricity rates benefits households and industries, it poses significant challenges for Taipower’s long-term financial stability. Experts warn that continued losses could hinder investments in Taiwan’s power infrastructure, potentially affecting future electricity supply and quality.
Possible Consequences:
- Increased Government Debt: The financial burden of subsidizing Taipower may lead to higher national debt.
- Delayed Energy Transition: Taiwan’s push towards renewable energy could slow down due to financial constraints.
- Future Price Hikes: If Taipower’s losses continue, Taiwan may face a sharp electricity rate increase in the future to compensate for prolonged deficits.
FAQs
Why is Taiwan not increasing electricity prices when other countries are?
Taiwan aims to control inflation and maintain industrial competitiveness by keeping electricity rates stable, even though global fuel prices have risen.
How is Taipower managing its financial losses?
The government is allocating additional financial support to Taipower and has proposed a NT$100 billion budget to ease the company’s debt.
Will electricity prices remain unchanged throughout 2025?
Currently, the decision applies only to the first half of 2025. A new review will take place mid-year to assess whether rates should be adjusted.
How do Taiwan’s electricity rates compare globally?
Despite economic challenges, Taiwan maintains some of the lowest electricity rates in Asia, ensuring affordability for consumers and businesses.
Could Taipower’s financial losses lead to power shortages?
Experts warn that continued financial strain may affect infrastructure investments, but the government is committed to preventing power disruptions.
