Power Generation Expansion Plan TAIWAN POWER COMPANY August 21, 2018 Distinguished guests, ladies and gentlemen, organizers, I am happy to be here. It’s my honor to have a chance to share power generation status in Taiwan with you. Taiwan is isolated island which is surrounded with ocean and depends on imports for near 98% of energy consumption, and almost of our fossil fuels form Middle East and Malaysia. Taiwan Power Company, TPC, is only power utility in Taiwan, all power usage of industries, business, household in Taiwan are almost supplied by TPC. We have responsibility for supply stable power. Power generation expansion plan of TPC is manual of energy policy of Taiwan. TAIWAN POWER COMPANY August 21, 2018

OUTLINE CONCEPTS NATIONAL ENERGY STRATEGIES TAIPOWER SYSTEM POWER DEVELOPMENT PLAN CONCLUSIONS Here is my outline. First, we talk about concepts of our national energy strategies. And then I’ll introduce national energy strategies based on those concepts. The following, we will take a look about the role of Taipower system in Taiwan electricity system and our last version of power development plan. Last one would be conclusions.

CONCEPTS The first chapter is concepts of our national energy strategies.

Policy Framework Nuclear Free Stable Supply Air Quality CONCEPTS The nuclear-energy-based power-generating facilities shall wholly stop running by 2025. System reserve margin to achieve 15% in 2019 (Operating reserve 10%) To improve regional air quality through “environmental dispatch” According to promise Taiwan government made on November 8th, 2017. There are three main targets we need to achieve. First, we will phase out all nuclear power by 2025, and plan to replace six nuclear reactors by renewable sources. The so called “Nuclear-Free-Homeland in 2025” policy has been legislated on January 26,2017. Second, to maintain stable power supply, we will keep system reserve margin beyond 15 percent after 2019. That means the risk of electricity shortage would be thousandth. The third is air quality. Now in Taiwan, people very concern about air pollution issue. And we had planned a standard operating procedure (AQI), coal-fired plant would reduce power generation when air quality index getting worse. Source: Executive Yuan, Nov. 2017.

NATIONAL ENERGY STRATEGIES Next chapter is national energy strategies amended according to concept we just talked.

Nuclear Free by 2025 Decommission Timeline NATIONAL ENERGY STRATEGIES Chinshan-1 Jul. 2019 Chinshan-2 Lungmen Kuosheng-1 Dec. 2021 Mothballed in 2015 (Imported fuel rods shall be sent out by 2020 according to Legislative Yuan) Kuosheng-2 Mar. 2023 We have four nuclear power plants in Taiwan, 金山, 國聖, 馬鞍山, and 龍門. Here’s decommission timeline about nuclear reactors in Taiwan. The schedule will start from December 2018 to May 2025. It’s worth mentioning that, Lungmen nuclear power plant is mothballed in 2015 because of public protest. Besides, now we plan to transport nuclear fuel rods of Lungmen nuclear power plant out of Taiwan by 2020. Jul. 2024 Maanshan-1 May 2025 Maanshan-2

Energy Transition Target (Generation) 2017 2025 NATIONAL ENERGY STRATEGIES 2017 2025 34% 5% 8% 1% 47% Coal LNG Renewable Nuclear Oil Pumped Storage 50% 20% 30% To reduce carbon emissions with nuclear free, nuclear power will be replaced by renewable. And liquefied natural gas (LNG) will dominate power generation in the future. In 2025, power generation structure in Taiwan would be 50% of LNG, 30% of coal, and 20% of Renewable. Source: Ministry of Economic Affairs, 2017

Renewable Energy Target NATIONAL ENERGY STRATEGIES Unit: MW 2015 2020 2025 Photovoltaic 842 6,500 20,000 Onshore Wind power 647 800 1,200 Offshore Wind power 520 5,500 Geothermal 150 200 Biomass 741 768 813 Hydro 2,089 2,100 2,150 Fuel Cell 22.6 60 Total 4,319 10,861　 29,923 Year Type Zhongneng#29 450 MW Liwei#2 251 MW Greater Changhua #12-15 2,423 MW Yunneng 708 MW Zhufeng#4 410 MW Haiding #11,16,17 2,256 MW Hailong #18,19 1,208 MW Changfang #27 475 MW TPC #26 812 MW Haineng#5+6 736 MW Xidao 305 MW 16 17 Haixia #28 500 MW 14 15 12 13 18 19 １ ２ 26 27 28 29 4 5 6 3 According to schedule made by Ministry of Economic Affairs, installation capacity of renewable will increase rapidly in the future, particularly photovoltaic and offshore wind power. Total installation capacity will increase to 29,923 MW in 2025, while capacity was 4,319 MW in 2015. Source: Ministry of Economic Affairs, 2018

TAIPOWER SYSTEM Now we focus on Taipower system.

History TAIPOWER SYSTEM In 1950’s and 1960’s, hydro power was the main electricity source. After the energy crisis in 1970’s, oil-fired generation had been gradually replaced by nuclear and coal-fired generation. Gas-fired generation has grown up significantly since 1990. Other renewables such as wind and solar power has developed mostly after 2008. 1950 1970 1990 2000 2010 2017 1960 1980 50 100 150 200 231 Nuclear Pumped Storage Coal Oil LNG Renewable Cogeneration Unit: TWh Stable and reliable power supply is essential to modern sociality. As I mentioned, Taipower is only power utility in Taiwan. We have great responsibility. In early stage, about 1950’s, hydro power was the main electricity source in Taipower system. Then oil-fired generation took the lead in 1970’s. We suffered from energy crisis at that times. Eventually, oil-fired had been gradually replaced by nuclear and coal-fired generation. In 1990’s, gas-fired generation has grown up significantly. And renewables has developed mostly after 2008.

POWER DEVELOPMENT PLAN I would like to introduce Taipower power development plan and note important projects for energy transformation.

Capacity increased (B-A) Program 10610 (10701 revision) POWER DEVELOPMENT PLAN Retiring capacity (A) -14,536 Adding capacity (B) +20,078 Capacity increased (B-A) +5,542 Major thermal & Nuclear power units Retiring Adding The picture about power development plan is a little bit busy. There are four main energy sources in this picture, coal, gas, oil, and nuclear. And timeline start from 2017 to 2028. Retiring units are above the timeline. Adding units are below the timeline. Each block represents units, maybe 1 or 2 or 3, in same power plant. Obviously, the adding units in the future are mostly green block, that is gas-fired generation, the type is gas turbine combine cycle (GTCC). To maintain stable power supply, stable LNG fuel supply will be important issue in the future for Taipower. Under Construction Installed Capacity (MW)

LNG Receiving Terminal Projects POWER DEVELOPMENT PLAN Hsiehho LNG terminal (To supply Hsihho new units – 1,000~1,300MW x 2) Taichung harbor LNG terminal (To supply Taichung new units – 1,000~1,300MW x 2) Item Content LNG unloaded 0.9 million ton/yr (2025~2029) 1.8 million ton/yr (2030) Status EIA review (Investment plan approved in July 2018) Item Content LNG unloaded 1.8 million ton/yr (2025) Status EIA review (Investment plan approved in March 2018) To keep stable LNG fuel supply, Taipower is ready to engage in the LNG business. By the way, Chinese Petroleum Corporation (CPC) is the only LNG supplier in the past. Taipower is planning to set up two LNG terminals in Tachung Harbor and Hsiehho near Keelung Harbor, Taichung Harbor LNG terminal supply 2 GTCC units with 1.8 million tons per year in 2025, Hsiehho LNG terminal also supply 2 GTCC units with 1.8 million tons per year in 2030. Note: 1.CPC currently operates two receiving terminals. 2.CPC’s third terminal project is under EIA review.

CONCLUSIONS I would like to summarize information I just mentioned and make some conclusions.

Summary CONCLUSIONS Taipower will expedite all gas-fired projects to ensure stable power supply, overcome intermittency of renewable energy and to improve air quality. As gas-fired generation elevates to 50% in 2025, additional LNG receiving terminal and storage tanks are required to ensure energy security. Taipower will construct two terminals and import LNG directly. Taipower will expedite all GTCC projects and invest two LNG receiving terminals to ensure stable power supply, overcome intermittency of renewable energy and to improve air quality. All vendors from other country are welcome to participate in Coal supply, LNG supply, and business of other power equipment.

Thank You for Your Attention