Reporting Principles This is the eleventh issue of the annual Sustainability Report published by Taiwan Power Company (Taipower). This year, the statistics and disclosures in the report have been compiled in accordance with the “Core” option of the G4 Guidelines of the Global Reporting Initiative (GRI). This report has been verified by SGS Taiwan to ensure that the report meets the requirements of both the Core Option of the GRI G4 and the GRI Electric Utilities Sector Disclosure guidelines, as well as the accountability principle standards (APS) in AA1000 (Type 1 Moderate Level). The contents featured in this Sustainability Report have been compiled from data submitted by relevant units of Taipower. To ensure the accuracy of the report's contents and compliance with stakehold- ers’ expectations, a yearly editorial meeting is held upon the completion of the report’s initial draft in which all data-submitting units review the contents of the report and provide feedback. All contents of the report must be approved by the corresponding unit supervisor, the President and the Chairman before publica- tion. As a result of the requirements of the Electricity Act, the ongoing transition of Taipower’s business departments, and the development of international green energy trends, Taipower’s 2017 Sustainability Report adopt “Light up the Green Future” as its theme. This will allow Taipower to present its intended responses to the government's green objectives and policies in Taiwan and ongoing trends emerging abroad, with Taipower’s future prospects as the focus for chapter layout and content presentation in this report. Period Covered by the Report From January 1 to December 31, 2016 (For the sake of complete disclosure and comparability, the report also includes some historical data.) Scope of the Report This report covers Taipower’s data and information regarding sustainability issues and achievements within the areas of economic management, social responsibility and environmental sustainability. Inquiries In 2015, Taipower established a new administrative unit focused on Sustainable Develop- ment to communicate with stakeholders about the company's performance on sustainability issues (including issues of lower materiality such as “Contribution to Society,” which are not covered by this report). The company has also added an administrative section that deals with stakeholder relations. The section conducts information gathering through questionnaires in order to communicate with our stakeholders. The Sustainable Development section was revamped in 2017 in an effort to present more diverse and interactive contents to stakeholders. This report is also available in Chinese, and the full version of the Chinese report can be down- loaded from Taipower’s website. In addition, the Information Disclosure section on Taipower’s website is updated regularly to provide the latest statistics on six major aspects of the compa- ny’s operations, including management, power generation, environment and so forth. The company is eager to receive any feedback regarding this Sustainability Report. Your input will enable Taipower to better meet your requirements and publish our next Sustainability Report in the third quarter of 2018. You can reach us by the following methods: 1 Taiwan Power Company Contact: Department of Corporate Planning Address: 12F, No.242, Sec.3 Roosevelt Rd., Taipei City Taiwan (R.O.C), 10016 Telephone: +886-2-2366-6463 Email: [email protected] Website: http://www.taipower.com.tw Sustainable Development Website: http://csr.taipower.com.tw Sustainability Report 2016 Sustainability Report 2015 Sustainability Report 2014 Sustainability Report 2013 Sustainability Report 2012 Sustainability Report 2011 Sustainability Report 2010 Sustainability Report 2009 Sustainability Report 2008 Sustainability Report 2007 2 Statement from the Chairman The year 2016 marks Taipower’s 70th anniversary and bears special significance as the company considers its past and moves into the future. During the last 70 years, Taipower has accumulated experience and wisdom and has developed its talents through the company’s efforts in developing various power generation technologies from scratch. This has been diligently accomplised with a spirit of professionalism and a down-to-earth commitment to overcoming various hardships and setbacks.The company has delivered safe and reliable power throughout Taiwan for 70 years and has a history of caring for the general public. The company makes a point of ensuring that “Taipower exists for your sake, each and every second,” something that is evidenced every time a member of the public flicks a switch. As for ushering in the future, with regards to current affairs in the international community, the Paris Agreement came into effect on November 4, 2016 and continues to promote low carbon emissions around the world. In keeping with this trend, the domestic power industry has also faced petitions for low-carbon emissions and nuclear-free homeland policies. At the same time, amendments to The Electricity Act were promulgated with a Presidential executive order on January 26, 2017 and will no doubt result in significant changes to Taipower’s development for the foreseeable future. In facing these challeng- es, everyone at Taipower will unite as one to realize the government’s policy of “Energy Transition – Green Energy First” for promoting low-carbon energy transition while creating a friendly environment to make way for grid-connectedgreen energy , so as to help Taiwan achieve the vision of nuclear-free and carbon reduction by fulfilling our goal of “Spreading love for a better future of green power.” On a related note, 2016 was a year of diligence and hard work as Taipower achieved significant gains in terms of gover- nance, environment and social responsibility that are summarized as follows: Improving Operational Efficacy Power generation and reliability are vital indicators of operational efficacy for a power company. In 2016, the thermal efficiency of our fossil-fuel power plants’ gross Higher Heating Value (HHV) reached 39.14%, with net generation reaching 134.1 TWh. The average number of power interruptions also fell by a margin of 0.012 (compared with 2015) to 0.208 (times/- customers) in 2016. These results have been Taipower’s most outstanding performance in past years and they reflect the joint efforts of our power generation, power transmission and power distribution units. In the Getting Electricity Index in Doing Business 2017 (published by the World Bank), Taiwan was ranked 2nd among 189 economic entities worldwide for three years running and this reflects the success Taipower has achieved in the area of improving power accessibility. With regards to innovation, Taipower received 5 awards (1 gold medals, 1 silver medal and 3 bronze medals) at the Asian Power Awards 2016. These included the Energy Industry Gold Award, the Taiwan Corporate Sustainability Award, the Corporate Sustainability Award in Corporate Overall Performance and the “Social Inclusion Award” in the “Best Single Performance Award” category. These prestigious awards are illustrative of the recognition and industry acknowledgment that Taipower has received from society. Promoting Organizational Reform and Energy Transformation On January 1, 2016, Taipower officially established four divisions: Power Generation, Nuclear Power, Transmission Systems, and Distribution and ServicesThrough this divisional structure, the company aims to raise cost awareness for all employees at Taipower and clarify the balance of payments. In light of the amendments to The Electricity Act, Taipower has established a Power Industry Liberalization Coping Strategies Task Force,” with 6 subordinate task forces for Power Genera- tion Coping Strategies,” Power Distribution Coping Strategies,” Transfer and Direct Supply,” Power Dispatch,” Accounting Separation and Resource and Transition Planning. These groups will be responsible for issues such as formulating measures for the liberalization of renewable energies, developing power transmission/transfer contracts and procedures, preparing to establish spin off holding companies, implementing accounting separation for the company, adjusting dispatch opera- tions in response to renewable energy liberalization and so forth. In addition, the company has organized 16 employee communi- cation seminars to adequately communicate and foster a consensus for organizational transformation within the company. Developing Creative Communication In this new media era, the company has sought to close the gap between Taipower and the general public by initiating a “New Media Task Force” in 2015 to reshape the company’s model of network media operations. This has been achieved by creating lively virtual characters with “human-like” personalities to deliver relevant information and to shape Taipower’s corporate image so as to boost the company's capacity for external communications and information disclosure. In 2016, Taipower’s Facebook page reached out to approximately 14.2 million users, which was double the number reached in 2015. 3 At the same time, Taipower has also stayed abreast of trends by organizing two hackathons in 2016 in the hopes of facilitat- ing communication among different stakeholders concerned with energy issues. This will in turn improve the transparency of Taipower’s information and through “open power information” and “collective intelligence” will boost the potential of power data analysis and innovative applications