1Q20 Energy Consumption Falls by 4.3% While COVID-19 Impacts Taiwanese Manufacturing and Transportation

published: 2020-05-30 18:30 | editor: | category: News

Taiwan’s energy consumption and capacity utilization fell short of maximum levels under the influence of the COVID-19 pandemic. According to data from the Ministry of Economic Affairs, Taiwan’s energy consumption and supply underwent QoQ drops of 4.3% and 4.7%, respectively, in 1Q20.

The period saw across-the-board declines in energy consumption for the manufacturing, transportation, and service industries, while the petroleum and transportation industries saw the greatest declines in combined energy consumption and supply, at 5.0% for the petroleum industry and 5.4% for the transportation industry, respectively. The chemical industry registered the greatest decline in energy consumption at 3.0%; this industry also recorded a decline in non-energy fuel consumption (such as petroleum) of 13.7%, owing to the pandemic-induced shortfall in global economic demand.

The transportation and service sectors likewise fell victim to the pandemic, with declines in traffic, hospitality, and travel. The above two sectors experienced 5.4% and 2.5% drops in energy consumption, respectively. Energy consumption for the service industry decreased by 3.2%, with the wholesale and retail businesses lowering their energy consumption by 9.6%, the largest magnitude of decreases with in the service industry. On the other hand, amidst a sea of declines, the chemical industry, which manufactures anti-pandemic products, increased its energy consumption by 5.2%.

Thanks to redirected orders resulting from the China-U.S. trade war, Taiwan’s domestic electronics industry, including the communication sector, increased its energy consumption by 7.5% and electricity consumption by 8%. In particular, according to the MOEA’s Industrial Production Index for the month of April, the electronic component sector increased its energy consumption by 22.15% year-over-year and registered double-digit growths for five consecutive months. In particular, the IC industry increased its energy consumption by 32.27% year-over-year owing to the explosive growths of 5G communication, IoT, cloud services, and HPC, while demand for chips used in remote applications, such as servers and laptops, has also grown considerably due to the pandemic.

At the same time, the pandemic has lengthened the time spent at home for most people. Residential energy and electricity consumption grew by 1.1% and 5.3%, respectively. This is accompanied by a change in Taiwan’s electricity industry. The share of thermal energy within Taiwan’s total electricity supply decreased by 2.9% year-over-year due to the 2.4% and 14.7% decreases in fossil fuel and coal-based energies, respectively. This is made by the 4.5% increase in natural gas, and 20.1% increase in renewable energy, the latter of which took place due to a major push by the government, with a 0.5% increase in the share of renewable energies.

According to a press release from the MOEA, despite the large-scale decrease (12.9%) in hydroelectricity due to lack of rainfalls, the corresponding increases in PV and wind power of 65.9% and 4.4%, respectively, more than made up for the deficit and resulted in a growth in renewable energy shares. Installed PV capacity grew by 39.7% year-over-year.

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