The Ministry of Economic Affairs announced the results of the electricity price review for the second half of 2025. Starting October 1, residential electricity prices will increase by an average of 0.71%, equivalent to an additional $70 per month for a four-person household. Industrial electricity prices, however, will remain unchanged based on the principle of “supporting industry.” After the adjustment, the average residential electricity price will be $2.89 per kilowatt-hour, still lower than in South Korea, Singapore, and Japan. According to the Directorate-General of Budget, Accounting and Statistics, the impact on consumer prices is expected to be minimal, with the Consumer Price Index (CPI) rising by only 0.0133%.
Ruei-He Jheng, Senior Analyst at the Third Research Division of the Chung-Hua Institution for Economic Research (CIER), noted that prolonged price freezes or minimal increases have deteriorated Taiwan Power Company’s financial position, resulting in a debt of $4.7 trillion. This financial strain hampers grid upgrades and the integration of renewable energy, potentially undermining Taiwan’s energy resilience. The Ministry of Economic Affairs should expedite the adoption of smart meters and time-of-use pricing to reflect true costs and encourage energy conservation, thereby avoiding the risks of supply disruptions observed abroad due to aging power grids.
Establishing a Quasi-Sovereign Fund to Spearhead Service Sector Upgrades
In the face of international challenges, Vice President Jiann-Chyuan Wang of the CIER pointed out that Taiwan’s traditional industries are enduring fivefold pressures: exchange rate fluctuations, rising costs of overseas operations, low-price competition from China, a strong New Taiwan Dollar, and a new wave of U.S. tariffs. Relying solely on upgrades makes it challenging to overcome these constraints. Only through cross-domain transformation—integrating machine tools with emerging sectors such as artificial intelligence, automation, and heavy electrical equipment—can we overcome the bottlenecks.
Vice President Jiann-Chyuan Wang proposed that enterprises must simultaneously address 3 major structural challenges: financial costs, carbon emission costs, and additional risk costs. Future strategies should focus on the following key areas: (1) Advance green and digital transformations by integrating environmental, social, and governance (ESG) principles as well as carbon emission management into core operations. (2) Promote deregulation and improvements in the service sector while introducing insurance funds to support the development of high-end service industries, such as long-term care, medical services, finance, and tourism. (3) Establish a “quasi-sovereign wealth fund” led by the private sector, with partial government involvement. This fund should balance investment returns with transformation initiatives to provide sustained momentum for industry upgrades.
Author: CIER Editorial Team
Date: September 23, 2025