Taiwan Power Company Sustainability Report Taiwan Power Company Sustainability Report Corporate Highlights Installed Capacity(40,977MW) Total Assets(million) 1,624,314 Pumped storage Hydro 1,650,000 2,602, 6.3% Nuclear Renewble Energy 1,600,000 5144, 12.6% 2,089, 5.1% 1,550,000 IPPs 1,500,000 7,707, 18.8% Purchased 1,450,000 9,022, 22.0% Cogenration Thermal 622, 1.5% 1,400,000 22,120, 54.0% Others 404, 1.0% 1,350,000 2008 2009 2010 2011 2012 Hydro 289, 0.7% Operating Revenues(million) 600,000 547,164 500,000 Power Generation(211,708GWh) 400,000 Pumped storage Hydro 300,000 2,924, 1.4% Renewble Energy 200,000 5,437, 2.6% Cogenration Nuclear 7,209, 3.4% 100,000 38,887, 18.4% Hydro 0 961, 0.5% 2008 2009 2010 2011 2012 Purchased 46,385, 21.9% Stockholder's Equity(million) Thermal IPPs Others 118,075, 55.8% 37,337, 17.6% 878, 0.4% 600,000 500,000 400,000 300,000 282,642 200,000 100,000 Customers(12,977 Thousand) Sales(198,391GWh) 0 Industrial Others 2008 2009 2010 2011 2012 210, 1.6% Commercial Others 17,323, 8.7% 987, 7.6% 180, 1.4% Loss Before Income Tax(million) 120,000 Residential 100,000 40,462, 20.4% Residential Industrial 11,599, 89.4% 108,980, 54.9% Commercial 80,000 31,625, 15.9% 62,069 60,000 40,000 20,000 0 2008 2009 2010 2011 2012 Power Restoration Time and Frequency of Forced Outages Line Loss min./cus.Yr ◆SAIDI ◆SAIFI % ◆Total system ◆Transmission system ◆Distribution system 4.86 4.76 4.58 4.66 4.42 20.810 19.246 17.663 18.224 19.05 2.65 2.65 2.38 2.53 2.37 0.354 0.298 0.238 2.21 0.196 0.204 freq./cus.Yr 2.20 2.13 2.11 2.05 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Editorial Policy Energy Conservation and Carbon Reduction . Smart Grid . Innovation This is the seventh issue of the annual Sustainability Report published by the Taiwan Power Company ("Taipower"). This edition of the report follows the G3.1 guidelines of the Global Reporting Initiative (GRI) as well as the accountability principle standard (APS) set forth in AA 1000 APS (2008). The information compiled and disclosed here is based on three principles: inclusivity, materiality and responsiveness. The focus of Taipower Sustainability Report 2013 is on “Sustainability Issues”. The purpose of this report is to demonstrate to the public and the stakeholders Taipower's dedication and achievements in the management and implementation of sustainability through the following 3 aspects: management, social responsibility, and environmental sustainability. Period Covered by the Report From January 1 to December 31, 2012 (for the sake of complete disclosure, some major issues in this report also cover data in 2011 and part of 2013). Scope of the Report This report contains data and information regarding sustainability issues and achievements within the areas of management, social responsibility, and environmental sustainability. Taipower has voluntarily adopted the GRI G3.1 Guidelines and AA 1000 standard for the preparation of this report and this report has been confirmed by SGS-Taiwan to conform to GRI level +A requirements. Inquiries This report is available in both Chinese and English. The complete report (in the PDF format) can be downloaded from the Taipower website ("http://www.taipower.com.tw/"). In addition, Taipower has a dedicated webpage of Sustainable Development to with stakeholders about its performance in related to sustainability issues. Our next sustainability report is planned for publication in the third quarter of 2014. Taipower sincerely hopes that this report will provide interested parties with a better understanding of Taipower's sustainability efforts. If there is any suggestion or comment, please contact with us as follows: Taiwan Power Company Contact: Department of Corporate Planning Address: 12F No. 242 Sec. 3 Roosevelt Rd., Taipei, Taiwan (R.O.C.), 10016 Telephone: +886 (02) 23666463 E-mail: [email protected] Website: http://www.taipower.com.tw/ 2007 Sustainability Report/ 2008 Sustainability Report/ 2009 Sustainability Report/ 2010 Sustainability Report/ 2011 Sustainability Report/ 2012 Sustainability Report/ Published in August 2007 Published in August 2008 Published in August 2009 Published in August 2010 Published in August 2011 Published in August 2012 This report is printed with environmentally-friendly paper free of heavy metals and environmentally-friendly soy ink 1 Table of Content Corporate Highlight 1 Editorial Policy 4 Profile of Taipower 7 Taipower Organization Chart 8 Letter from the Chairman 10 Key Issues of Sustainability 10 Operational Mechanism for Sustainable Identification of Stakeholders Management 12 13 Key Sustainability Issues and Responses 12 Identification of Key Sustainability Issues 16 Governance with Accountability and Business Improvement 16 Corporate Governance and Corporate Ethics 20 Improving Financial Depreciation 18 Business Strategy and Strategy for New 21 Business Improvement Business Development 23 Taipower Management Performance and 19 Risk Management Achievements in 2012 20 Promoting Reasonable Tariff Schedules 27 Corporate Internal Control Effective Management 28 Strengthening Nuclear Power Generation Safety 28 Planning for Nuclear Power Generation Safety 30 Measures for Strengthening Nuclear Power Generation Safety 34 Upgrading Power Supply Stability 34 Developing Renewable Energy and 40 Ensuring Fuel Supply Security and Stability Improving the Energy Source Mixture 42 Enhancing Innovative Applications 39 Strengthening Grid Structure 44 Enhancing Energy Conservation and Climate Change Adaptation 44 Climatic Change Adaptation 47 Greenhouse Gas Inventory and Reduction 44 Energy-Saving and Carbon-Reduction 49 Carbon Footprint of Power Industry Strategy and Action Plans 2 Energy Conservation and Carbon Reduction . Smart Grid . Innovation 50 Creating an Environmental-Friendly Culture 50 Environmental Impact Assessment 55 Environmental Conservation and Ecological Diversity 50 Energy Resource Management 56 Environmental Protection Fines Reduction 52 Air Quality Maintenance 56 Recycle and Reuse of Industrial Waste 53 Environmental Education Training and Power-Generation Side Products 53 Green Procurement 57 Removing Silt and Maintaining the Safety of Reservoirs 53 Low Carbon Park 57 Environmental Footprints of Taipower's 54 Green Buildings Operations of 2012 58 Employee Cultivation and Workplace Harmony and Safety 58 Taipower Human Resource Structure Snapshot 62 Labor-Management Relations 60 Strengthening Human Resources Management 63 Occupational Safety and Health 61 Creation of a Fair Employment Environment 66 Communication between Taipower and Stakeholders 66 Refining Customer Services 70 Enhancing Information Disclosure and Internal & External Communication 78 Social Particpation 78 Amounts of Social Investment in 2012 81 Cultural Education 79 Social Care and Community Services 83 Development of Local Industries 80 Giving Back to Township and Villages 83 Sports Events 80 Emergency/Disaster Assistance and Subsidy for Electricity Bills 84 Financial Statements 86 Third-Party Assurance Statement 88 GRI Index 92 2012 Chronology 3 Profile of Taipower The Taiwan Power Company ("Taipower") was established on May 1,1946. It is a vertically integrated power utility. Its business scope includes: generation, transmission, distribution and sales. It’s the sole power sales company in Taiwan. The electricity produced by independent power producers (IPPs) and cogeneration is sold in bulk to Taipower, who in turn sells this to the customer. As of the end of 2012, the total installed capacity of Taiwan's power system reached 40,977 MW, of which Taipower accounted for 31,955 MW and non-Taipower assets for 9,022 MW. The major energy sources comprise hydro, thermal, nuclear, and renewable. The power grid includes 592 substations and transmission & distribution lines totaling 364,000 KM, providing electricity to a population of 23 million people in Taiwan, and the offshore islets of Penghu, Kinmen, and Mazu. Taipower is a public utility shouldering the obligation of power supply. To meet future power demand and ensure sufficient power sources, in recent years, Taipower has been actively promoting various large-scale power development projects in the hope that the generation mix of base, mid, and peak loads can be improved and the reasonable reserve margin target figure of 15% can be maintained. To establish a sound power grid, the implementation of the Seventh Power Transmission and Substation Project will continue. In addition, a smart power grid will be developed in phases to cope with the requirements of high-tech industries for power quality. Taipower understands quite well that it will confront challenges from competition in the near future after the liberalization of the power market. A broader international vision, a combination of more efficient management technologies and management strategies that focus on social responsibility and sustainable development will all be keys for Taipower to maintain its sustainable growth and improvement. Recently, Energy Conservation and Carbon decrease have become important management issues for the global power industry. In order to demonstrate its concern about the global warming issue, and to comply with the government’s Sustainable Energy Guidelines, Taipower has formulated the Greenhouse Gas Regulation Strategy to undertake the measures of greenhouse gas reduction and inventory monitoring, increase its ratio of renewable energy, and promote green electricity to fulfill its responsibility as a corporate citizen in the international power industry. Installed