Supplier Composition
Taipower's suppliers include the providers of fuel, materials, and equipment necessary for power generation and as well as suppliers of external electric power. The Company monitors the potential risks of suppliers with different characteristics and manages their quality, output, and impact on the environment and society.
Fuel Supplier Management
The main fuels used in Taipower's thermal power plants are coal, natural gas, and fuel oil. Nuclear power plants also require nuclear fuel. Taipower adheres to the four strategies of energy supply diversification, long-term supply contracts, safe inventories, and stable coal transportation to ensure stable fuel supplies. The Company provides power plants with fuel promptly and at suitable quality and quantity to ensure the safety and stability of the power supply. Detailed measures and actions are described below：
Suppliers of Materials and Equipment
Suppliers of Materials
Taipower provides professional internal training and consultation for issues associated with the Government Procurement Act. Training ranges from front-end material numbering, supplier capability reviews, and establishment of qualified supplier lists and management to requisition and demand management, procurement, acceptance, and logistics operations. Taipower is also actively implementing supply chain digital transformation and has established Enterprise Resource Planning (ERP), a Supply Chain Management (SCM) platform, and a Warehouse Management System (WMS) to achieve internal and external network collaboration and construct a comprehensive system.
The Equipment Supply Chain
Taipower used ISO 9001 to integrate its evaluation/re-evaluation/ inspection/feedback steps on defects when executing supplier management and auditing. This ensures the quality, cost, and delivery of power-related equipment and devices provided by suppliers. Taipower also revised relevant regulations to establish a quality assurance program for electrical equipment. The Company requires suppliers to develop the capacity to design and supply qualified products and to prevent non- compliance from design to services.
Electricity Suppliers
As of the end of 2022, Taipower has signed contracts with 11 independent power producers (IPPs), 47 co-generation power providers, and has 50,980 contracts for renewable energy including solar, wind, hydropower, and others. A full 62.5kWh of electricity was purchased from external sources in 2022.
Creating a Sustainable Supply Chain
Review and Procurement Standards for Taipower Suppliers
Supplier Review Standards Pursuant to the Government Procurement Act To ensure material quality, maintain power supply safety, and to improve procurement efficiency, Taipower reviews the bidding documents of suppliers in keeping with the Government Procurement Act.
In 2022, Taipower received a total of 3,328 material procurement tenders from 1,055 domestic suppliers and 45 foreign suppliers, for a total of 1,100 suppliers. A total of approximately NT$113.3 billion in tenders was awarded. Domestic tender awards totaled approximately NT$99.6 billion and accounted for approximately 88% of the Company's procurement of property. Among them, the tender awards for selective tendering came to roughly NT$71.8 billion and accounted for approximately 63% of Taipower's total procurement of property. There were 61 contracted suppliers (the tender awards for items that fell under the purview of the localization policy came to approximately NT$34 billion and accounted for approximately 32% of Taipower's total procurement of property.) The tender awards for other types of tenders amounted to approximately NT$41.5 billion which accounted for approximately 37% of Taipower's total procurement of property.
Process of Screening the List of Selectively Tendered Materials, Equipment and Qualified Suppliers of Taipower
To improve the effectiveness of management and control, Taipower has adopted the principle of centralized management. Where the utilization of equipment is frequent and numerous units intend to use the said equipment, the overall consideration of supply and demand must be reserved and the application of purchase, procurement, final acceptance, storage, and transportation of equipment should be handled in a unified manner to save costs.
Supplier Evaluations and Audits
Taipower conducts supplier re-evaluation based on its Re-evaluation Guidelines of Power Equipment and its Review of Supplier Capability and Management of Qualified Manufacturers policy. Suppliers with Certificates of Manufacturing Capacity must conduct re-assessments before the expiration dates of their validity periods (up to three years) to maintain their qualifications.
During the re-evaluation process, Taipower conducts a comprehensive evaluation of supplier manufacturing capacities, quality management systems, manufacturing equipment, and lists of equipment that require inspection, suppliers of components or raw materials, delivery conditions in the most recent three years, and improvement measures for misusing equipment. Suppliers that meet the requirements are issued Certificates of Manufacturing Capacity. When suppliers fail to meet requirements, they are given a limited period in which they can propose improvement measures. Suppliers that fail to propose improvement measures without valid reasons are required to re-apply for their Certificates of Manufacturing Capacity.
In 2022, Taipower strengthened its auditing of material suppliers. Among 154 qualified suppliers in selective bidding, 28 were re-evaluated which accounted for 18%* (The eligibility period of re-evaluation was three years, and the eligibility cycles of different materials from the same supplier were also different, therefore the re-evaluation was conducted on those who had expired eligibility periods). In addition, the Company conducted inspections during the manufacturing process and on-site audits of suppliers a total of 416 times.
Note: The number of suppliers assessed for risk accounted for 18% of the 28 selective tendering suppliers, which represents 18% of all the total of 154 (144 domestic and 10 international) suppliers.