Taiwan Power Company Sustainability Report Taiwan Power Company Sustainability Report Energy Conservation and Carbon Reduction . Smart Grid . Innovation Editorial Policy This is the sixth 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 2012 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 economy, social responsibility, and environmental sustainability. Period Covered by the Report From January 1 to December 31, 2011 (for the sake of complete disclosure, some major issues in this report also cover data in 2010 and part of 2012). Scope of the Report This report contains data and information regarding sustainability issues and achievements within the areas of management economy, 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 communicate with stakeholders about our performance in related sustainability issues. Our next sustainability report is planned for publication in the third quarter of 2013. Taipower sincerely hopes that the publication of this report will provide interested parties with a better understanding of Taipower's sustainability efforts. Your suggestions or comments regarding this report are welcomed by Taipower and you may contact us through one of the following methods: Taiwan Power Company Contact: Department of Corporate Planning Address: 12F No. 242 Sec. 3 Roosevelt Rd., Taipei, Taiwan (R.O.C.) 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/ Published in August 2007 Published in August 2008 Published in August 2009 Published in August 2010 Published in August 2011 This report is printed with environmentally-friendly paper free of heavy metals and environmentally-friendly soy ink 1 Table of Content Energy Conservation and Carbon Reduction . Smart Grid . Innovation 1 Editorial Policy 4 Profile of Taipower 7 Taipower Organization Chart 8 Letter from the Chairman 10 Key Issues of Sustainability 13 New Energy Policy 14 Key Sustainability Issues and Response 16 Governance with Accountability 17 Corporate Governance and Corporate Ethics 20 Risk Management 22 Sustainable Development Philosophy and Operational Mechanism 24 2011 Management Performance Achievements 28 Upgrading Power Supply Stability 29 Nuclear Power Generation Safety – Lesson from the Nuclear Accident of Fukushima in Japan to Fortify the Prevention of Disasters 36 Power Supply Stability 39 Development of Renewable Energy 40 Demand-Side Management 42 Development of Electric Power Technology 43 Enterprise Resource Planning (ERP) 44 Coping with the Challenges of Climate Change 45 Climatic Change Adaptation 46 GHG Control Action Plans 2 Table of Content Energy Conservation and Carbon Reduction . Smart Grid . Innovation 52 Creating an Environmentally-Friendly Culture 53 Environmental Impact Assessment 59 Low Carbon Park 54 Energy Resource Management 60 Green Buildings 56 Reducing the Penalties on Environmental Protection 61 Environmental Conservation 57 Air Quality Maintenance and Ecological Diversity 58 Environmental Education Training 62 Environmental Footprints of 58 Green Purchasing Taipower's Operations of 2011 64 Employee Cultivation and Workplace Harmony and Safety 67 Cultivation of Talent 70 Creation of a Fair Employment Environment 71 Labor-Management Relations 73 Occupational Safety and Health 76 Social Participation 77 Deepening Social Care 79 Giving back to Society 80 Emergency/Disaster Assistance and Subsidy for Electricity Bills 80 Cultural Education 83 Development of Local Industries 83 Sports Events 84 Communication between Taipower and Stakeholders 86 Consumer Service 96 Taipower Outreach 90 Promotion of Reasonable Tariff Schedules 99 2011 Awards 92 Communication between Taipower and Stakeholders 100 Third-Party Assurance Statement 102 GRI Index 3 Energy Conservation and Carbon Reduction . Smart Grid . Innovation 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: power generation, power transmission, power distribution and power 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 sell this to the customer. As of the end of 2011, the total installed capacity of Taiwan's power system reached 41,401 MW, of which Taipower accounted for 32,508MW and Non-Taipower assets for 8,893 MW. The major energy sources comprise hydro, thermal, nuclear, and renewable. The power grid includes 584 substations and transmission & distribution lines totaling 357,000 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 16% 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 its 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 improvements. Recently, Energy Conservation and Carbon Reduction 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 Capacity and Generation Mix in 2011 Unit: MW Oil 3,325 (8%) Coal Pumped Storage Hydro 2,602 (6.3%) 8,800 (21.3%) Cogeneration Installed Nuclear 5,144 (12.4%) 622 (1.5%) Capacity Unit: GWh IPPs Coal Renewable Energy Coal 64,193 (30.1%) 3,097 (7.5%) 41,401 2,044 (4.9%) Oil 6,908 (3.2%) IPPs Natural Gas Pumped Storage Hydro 4,610 (11.1%) 2,888 (1.4%) Natural Gas IPPs Renewable Energy 10,593 (25.6%) Nuclear 563 (1.4%) Cogeneration Generation 40,522 (19%) 9,254 (4.3%) Non-TPC asset 8,893 (21.5%) 213,042 IPPs Coal Renewable Energy 21,680 (10.2%) 3,906 (1.8%) Natural Gas 44,169 (20.7%) IPPs Natural Gas 17,882 (8.4%) IPPs Renewable 1,640 (0.8%) Purchased Power 50,453 (23.7%) 4 Energy Conservation and Carbon Reduction . Smart Grid . Innovation Founded: May 1, 1946 Coverage: Taiwan, Penghu, Kinmen, Matsu areas Capital: NT$330 billion Stock: 96.92% government-owned, 3.08% public-owned Total assets: NT$1,629.7 billion Employees: 27,261 Customers: 12.77 million Resident 11,398,498 household Industrial 210,288 household Commercial 988,827 household Others 170,431 household Installed capacity: Taipower System: 41,401 MW, (32,508 MW Taipower-owned) Power generated and purchased: 213,042 GWh Energy sales: 198,637 GWh Taipower Integrity Management Innovation Philosophy To provide accurate information to customers, em- To create customer value and enhance cor- ployees and shareholders. porate competitiveness. Caring Service To work whole-heartedly and proactively for To fulfill internal and external customer demand based the benefit of the public. on the "customer first" concept. Taiwan Power Company's corporate culture is "people-first" and "the pursuit of excellence", "integrity" and "caring" are the management philosophy of "people-first", "innovation" and "service" are the management philosophy of "the pursuit of excellence". Taipower To offer diverse services to satisfy our customers' demands, to promote the nation's competitiveness, Mission and to protect the interests of our employees and shareholders. Taipower To become a prestigious