RCP Scenario: Representative Concentration Pathways (RCPs) which utilize the change in radiative forcing from 1750 to 2100 as the main indicator are employed for future temperature and precipitation change analysis. RCP2.6 (increase in radiative forcing by 2.6W/m2) is the scenario of mitigated global warming, while RCP4.5-RCP6.0 and RCP8.5 (and above) are scenarios characterized by limited mitigation or no mitigation, respectively. According to the scenario simulations of Taiwan Climate Change Projection Information and Adaptation Knowledge Platform (TCCIP), RCP 2.6 and 6.0 result in vastly different outcomes for Taiwan:
Data source: Taiwan Climate Change Projection Information and Adaptation Knowledge Platform (TCCIP)
2050 Weather phenomena
Weather impact and countermeasures
CO2 level 421 ppm
Temperature rise by 0.92℃, precipitation increase by 4.36mm/day. This represents an increase by 73% on the basis of an average precipitation of 6.0mm/day.
Rising interior temperatures force plants to increase their investments in ventilation and cooling facilities; flooding causes damage to production facilities and delivery delays. Installation of flood boards in entrance and exit areas minimizes the impact of flooding.
CO2 level 670 ppm
Temperature rise by 0.93℃, precipitation decrease by 2.56mm/day. This represents a decrease by 42% on the basis of an average precipitation of 6.0mm/day.
Rising interior temperatures force plants to increase their investments in ventilation and cooling facilities; droughts cause a shortage of cooling water and malfunctions of teeming furnaces, baking furnaces, and air conditioning equipment.
Allocation of an annual budget of around NT$ million for ongoing improvements to safeguard employee health.
Suspension of operations in the Chungli Plant results in daily production capacity losses of NT$ 11.26 million.
Reclaimed circulating water from cooling towers in the Chungli Plant amounts to 76 tons/day. Water purchased externally to compensate for scattering and evaporation accounts for around 0.3% of the total quantity of circulating water.
Investments of NT$ 340 million and 230 million in new manufacturing centers and supply chains in Vietnam and India, respectively, serve the purpose of supply chains decentralization.
Transformation Risk Scenario Analysis
NDC Scenario: Reqirement of 10% Renewable Energy Installation
The Regulations for the Management of Setting up Renewable Energy Power Generation Equipment of Power Users above a Certain Contract Capacity promulgated by the Ministry of Economic Affairs stipulate that power users with a contract capacity of 5MW or above are required to install renewable energy facilities with a capacity equivalent to 10% of their contract capacity within five years.
Upon inventories, it has been determined that the power consumption of TECO plants exceeds 5MW. The Company adopted an early deployment strategy in 2020 by investing a total of NT$ 105 million in the installation of a solar energy system with a capacity of 1.7MW in the Chungli Plant. The projected annual generation amount is 2 million kWh, which represents an early achievement of the goal of 10% green power installations. As of 2021, the system is already connected to the grid.
IEA 2DS Scenario: Cost Impact from Carbon Price
If the US and the EU determine carbon prices in accordance with the IEA 2DS carbon reduction scenario, the price will reach $210 USD/tCO2 in 2050.
Sales in the European and US markets account for 20% of TECO’s total sales volume. If carbon prices in these two markets rise in accordance with the IEA 2DS scenario, TECO’s operating costs are bound to rise with each passing year. In response to these impacts, TECO has fully implemented Sustainability KPI starting this year including the three indicators of internal carbon pricing, ratio of recycled materials and waste recycling, and climate impact management with the ultimate goal of strengthening carbon reduction performance and thereby minimize the future impact of rising carbon prices.
Contact window: CSR Task Force/Jay LC Huang, Special Assistant, email@example.com