A Study on Deregulation of the Electricity Market in Chinese Taipei

Abstract

After years of ideological contest, the world has now embarked on the path of market-driven economic development. Many utility industries in advanced countries have shifted from the conventional regulated system to a more liberalized one. Among these industries, the electric power industry is one which is rapidly evolving toward a more competitive market. For example, the electric power industries of more than twenty countries such as United Kingdom, New Zealand, United States, and Singapore have undergone drastic changes over the last five years.

This international tendency in the development of the electric power industry has definitely influenced the electric power industry in Chinese Taipei, which is currently consists of a vertically integrated power company run by the government, to move gradually toward a more open and liberalized market system. Independent power producers (IPPs) and cogenerators have been encouraged by the government to create more competition in power generation. Yet, related regulations and laws are quite incomplete and the existing legal system which regulates the power market has many deficiencies. Therefore, it is very important to examine the current problems and their relation to future regulatory reform of the electric power market in Chinese Taipei.

The main purpose of this study is to identify the key issues in the regulatory reform of the electric market in Chinese Taipei and to propose a system for the appropriate management of the electricity market in Chinese Taipei. In order to achieve the above objectives, this study first focuses on current regulatory theory and practice in the electric power industry and on the experience of the electric power industry evolution in some advanced countries. Next, structure of electricity market liberation is proposed for intermediate and long-term strategies. Finally, suitable regulatory system and relevant policy recommendations are presented.