The Consequences of Cheap Power, Water

According to this article in TAIWAN BUSINESS TOPICS, the monthly English-language magazine published by the American Chamber of Commerce in Taipei, electricity is cheaper here in Taiwan than in several comparable economies:

"Households pay an average of NT$2.57 per kilowatt-hour versus NT$3.33 in Singapore, NT$3.8 in Hong Kong, and NT$5.94 in Japan, according to data provided by Taipower..."

"[D]emand is still rising... Taiwan's purchases of fossil fuels rose by 4 percent last year... power demand [is] growing by 2 percent to 4 percent each year."

It also deflates the idea that increasing electricity prices would force manufacturing offshore:

"Most experts interviewed for this report thought that low tariffs will not affect decisions made by Taiwan's companies on whether to stay on the island or move production offshore. They point out that companies wishing to move operations to China or Southeast Asia to save costs have already done so, while those remaining in Taiwan see obvious benefits from being here..."

While discussing electricity, the article seems concerned solely with Taipower's financial woes, and how those might impact power capacity and supplies in the future. When it turns to water, however, environmental issues do get a mention:

"From badly polluted rivers to a shortage of sand on Taiwan's beaches, a range of severe environmental, economic, and infrastructure difficulties can be traced back to the low water prices."

An expert is quoted as saying:

"'The more you use, the cheaper it gets. This gives the public no incentive to save water.' In fact, economists say, it results in those who conserve water actually subsidizing water wasters."

"...20 percent of Singapore's water supply comes from recycling sewage. The water is used for cooling towers, gardening, street washing, and other functions aside from human consumption, but the downside is that building sewage-treatment plants is expensive. 'In comparison, Taiwan is not even close to having an integrated water-management philosophy'."