Corporate Governance ｜ Performance Highlights
Task Force on Climate-related Financial Disclosures (TCFD)
Taipower follows the framework of the Task Force on Climate-related Financial Disclosures (TCFD) when gradually incorporating climate change risks into its climate change management. It discloses information regarding climate risks and opportunities in line with its principles.
As a provider of electricity in Taiwan, Taipower's Board of Directors recognizes that addressing medium- to long-term climate change is a significant management challenge. Predicting future climate change and accurately assessing the potential social changes and their impacts on Taipower's business environment is highly challenging. However, despite the high level of uncertainty, Taipower strives to avoid or mitigate future losses through highly accurate risk assessment and analysis. Through this process, Taipower aims to identify new business opportunities and achieve sustainable operations that align with society's expectations.
Taipower upholds operational transparency and believes that a sound and efficient board of directors provides a solid foundation for corporate governance. In driving climate change and sustainability management strategies, the board also plays supervisory and guiding roles, authorized the establishment of the Sustainable Development Committee to assist in overseeing corporate sustainability and climate change-related practices and regularly reporting its activities and resolutions to the board.
Climate-related risks and opportunities
|Risk/Opportunity Description||Potential Financial Impact||Potential Timing of Occurrence|
Climate change-induced catastrophic weather risks, such as destructive typhoons and floods, may lead to damages at power generation and electricity transmission/distribution facilities, resulting in supply interruptions including blackouts and increased costs. For example, in 2022, Typhoon Surigae caused power outages for over 7,000 households in Yilan.
Climate risk analysis
Taipower utilized the Representative Concentration Pathways (RCPs) proposed by the Intergovernmental Panel on Climate Change’s (IPCC) Fifth Assessment Report (AR5), including the RCP2.6, RCP4.5, RCP6.0, and RCP8.5 scenarios. Using publicly available data from the Taiwan Climate Change Projection and Information Platform (TCCIP), Taipower analyzed the "average change rate of annual maximum daily rainfall" (as shown in the figure below) to identify potential near term (-2035), medium-term (2046-2065), and end of century (2080-2100) scenarios. Compared to the reference period (1986-2005), Taiwan, in the worst-case scenario (RCP8.5), may experience an increase of 35.34 millimeters (mm) in the maximum daily rainfall, potentially reaching 221.34 mm. This increase raises the chances of "short-duration heavy rainfall" situations that pose the risk of inundation of existing urban drainage systems, power plants, and power grids.
|Increased operating costs and capital expenditure||Short term|
Climate change leads to an increased frequency of drought, which can result in the shutdown of hydroelectric power facilities. For example, in 2021, the Techi Dam power plant, which relies on water from the Dajia River for hydropower generation, had to suspend operations for the first time due to low water levels caused by drought.
Climate Risk Analysis
Taipower utilized scenarios proposed by the Intergovernmental Panel on Climate Change (IPCC) in their Fifth Assessment Report (AR5), including RCP2.6, RCP4.5, RCP6.0, and RCP8.5. By leveraging the information and adaptation knowledge available in the Taiwan Climate Change Projection Information and Adaptation Platform (TCCIP) from publicly accessible data, an analysis of the "average change rate of annual maximum consecutive dry days" across Taiwan was conducted for the near-term (-2035), medium-term (2046-2065), and end-of-century (2080-2100) periods under different scenarios (see figure below).
|Increased operating costs and capital expenditure||Short term|
-Policy and Legal
|Taiwan officially enacted the Climate Change Adaptation Act in 2023, which includes the target of achieving net-zero emissions by 2050. In response to this law, adjustments to the energy structure are expected to align with the requirements of the Climate Change Adaptation Act.||Increased operating costs||Short to medium-term|
|Energy transition will render traditional technologies or assets obsolete. To align with Taiwan's net-zero transition plan and implement the "Increase Gas, Reduce Coal" policy, Taipower aims to increase the use of natural gas while decreasing coal consumption. Additionally, Taipower plans to expand the capacity of renewable energy installations, prioritizing mature technologies such as wind power and solar power. In the long term, Taipower aims to maximize renewable energy generation, with an eventual target of 60% of power generation. This will be achieved through the integration of gas-fired units with carbon capture, utilization, and storage (CCUS) technologies, as well as the introduction of hydrogen-based power generation to establish a carbon-free electricity system.||Increased operating costs||Medium to long-term|
|As the challenges related to climate change intensify, there is an increased risk of accidents, delayed responses to natural disasters, changes in taxation, and other practices, all of which contribute to rising operational costs.||Decreased revenue||Medium to long-term|
|The feasibility study of the gas combined cycle power plants planned for an increase in net efficiency from 60.7% in 2019 to 62.5% in 2022 (Note: Net efficiency of the power plants is based on the site conditions, LHV).||Decreased operating costs||Short to medium-term|
|Since the Paris Agreement, there has been a growing global demand for carbon capture and storage technologies, presenting potential new revenue sources for Taipower. Internationally, emerging carbon-free power generation technologies are being developed, such as the use of hydrogen or ammonia as alternatives to fossil fuels, or implementing carbon capture, utilization, and storage (CCUS) to capture, store, and reuse CO2 emitted from power generation processes. Taipower is actively planning to demonstrate and eventually adopt Hydrogen (Gas-fired power plants) and Ammonia Blending (Coal-fired power plants) as well as Carbon Capture, Utilization, and Storage (CCUS) technologies. Taipower is also collaborating with international technology-leading companies to drive these initiatives forward. In order to achieve net-zero carbon emissions by 2050, Taipower is planning a pilot demonstration project for carbon capture at the Taichung Power Plant, which involves the installation of carbon capture equipment.||Increased revenue and decreased operating costs||Medium to long-term|
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