TAIWAN-ENERGY-ELECTRICITY
TSMC estimates that if natural gas prices for electricity remain at current levels until the end of the year, fuel costs in 2026 will increase by more than NT$160 billion compared to before the Middle East conflict. Whether the supplementary budget is approved and subsequent electricity pricing policies will affect Taipower's finances and energy cost sharing. The image shows a diagram of Taiwan's power infrastructure.

The conflict in the Middle East has driven up international energy costs. Taiwan Power Co. (Taipower) said on Oct. 22 that if current natural gas prices for power generation remain unchanged through the end of the year, its annual fuel costs could be more than NT$160 billion higher than before the conflict. Taipower said cumulative losses could exceed NT$420 billion by year-end if it does not receive funding from the government's supplementary budget, leaving the company under considerable financial pressure.

According to a Oct. 22 report by the Central News Agency, the Executive Yuan has approved a 2026 supplementary budget proposal that allocates NT$71.1 billion to Taipower. The company urged the public to support the budget, saying the funding would help maintain stable electricity supplies and industrial operations.

Taipower said natural gas prices for power generation have risen by more than 70% cumulatively since April 2026 as a result of developments in the Middle East. Based on the latest conditions, and assuming October's natural gas price for power generation remains unchanged through the end of the year, annual fuel costs could be more than NT$160 billion higher than before the conflict. Taipower estimates that natural gas costs from March through August were about NT$71.1 billion higher than before the conflict.

On its finances, Taipower reported a loss of NT$20.3 billion in the first eight months of the year, bringing cumulative losses to NT$371.2 billion. If natural gas prices remain at current levels through the end of the year, the full-year loss could exceed NT$70 billion. Without funding from the supplementary budget, cumulative losses by year-end could exceed NT$420 billion. Taipower also said that because electricity rates do not fully reflect fuel costs, while the company must make substantial capital investments each year, its outstanding debt has reached about NT$1.85 trillion.

Whether electricity rates will be adjusted is also drawing attention. In another report, the Central News Agency quoted Taipower as saying that failure to secure the supplementary funding could affect the direction of electricity rates in December. If rate adjustments become necessary in the future, the government may discuss rates for households and industries separately, taking into account their ability to bear the burden and electricity consumption. Taipower stressed that the matter still depends on the budget and changes in costs, and that no rate increase has been decided.

Taiwan's electricity-rate policy involves multiple considerations, including energy supplies, price stability, industrial competitiveness and Taipower's financial health. If electricity rates fail to reflect fuel costs over the long term, the financial burden on state-owned enterprises could grow. But directly raising rates could also increase expenses for households and businesses and put upward pressure on prices.

Developments to watch include the Legislative Yuan's review of the supplementary budget, international energy-price movements and whether the government proposes new electricity-rate arrangements. The cost figures released by Taipower are scenario-based estimates; actual annual spending and financial results will continue to vary with fuel prices, exchange rates and policy decisions.