TAYA Group’s Successful Solar Energy Business Gradually Contributes to Overall Profitability【NOWnews】
TAYA Group’s Successful Solar Energy Business Gradually Contributes to Overall Profitability
Reporter Hsu, Jia-Chen / Taipei
Issue Date: 2022/04/25
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While the global economy has been impacted by the COVID-19 pandemic, soaring international copper prices and renewable energy issues have attracted increasing attention, allowing TAYA Group, actively involved in the solar energy industry, to achieve remarkable results in the face of adversity. Group Chairman Shen, Shan-Hung pointed out that the Group's solar business is not only gradually contributing a larger share of profits, but also has the potential to become a stable engine of regular profit in the future. When it comes to energy issues in Taiwan, Shen frankly notes that the national energy plan must be long-term. If there is a shortage of energy today, it is obvious that the demand is underestimated or there is a delay in energy infrastructure development, and calls for not only making up for shortfalls, but also stepping up as soon as possible!
Last year's soaring international copper prices are reflected in the price of wire and cable, coupled with Taipower's continued retirement and replacement of old transmission and distribution feeders, as well as the continued construction of property projects by developers, which led to a flurry of good reports on revenue and profitability for the wire and cable industry. Invigorated by its solar energy business, TAYA Group's revenue reached a record high of NT$27.45 billion last year (2020), an YoY increase of 50%, and its earnings per share (EPS) reached NT$2.3, also setting a new record high. Last year, 20 to 25% of the overall profit came from solar energy business, which is very impressive.
TAYA Group Chairman Shen, Shang-Hung pointed out that the Group is marking its 67th year this year, and it is very stressful to set each year's revenue and profit to reach a new heights. But what the company is more concerned about is how to strategically set its development roadmap for the medium and long term in three to five years. And what should the goals be? Because there are already many factors that influence short-term business operations, such as the recent spike in raw material prices, which in turn affects capital market prices, TAYA Group expects three or five years to be better than the previous three or five years, and that is in fact the case.
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Shen further explained that the industry has benefited from high international copper prices, and the performance of the wire and cable and enameled wire industry is remarkable. In recent years, the Group has been actively developing solar power plants, energy storage, energy management systems and other related green energy industry sectors. In terms of solar power generation, Ta Ya's focus this year is on its subsidiary Jhih-Guang Energy’s solar power plant in Qigu District, Tainan, which is currently (2022) the largest fishery and electricity symbiosis solar power plant in Taiwan. The Group hopes to complete the first phase of the project by the end of this year, with 85MW of power interconnection, and expects to complete the second phase of 35MW by the second quarter of next year, with a total installed capacity of 120MW, which is expected to become a new driving force for the Group's business operations.
At present, in terms of Ta Ya’s solar energy business, Ta Ya Green Energy Technology operates 53 solar power plants with 120MW installed capacity, including through its subsidiaries Sin Jhong Solar Power, Touch Solar Power, Bravo Solar Power, and Bosi Solar Energy. Ta Ya also holds more than 22% shareholdings of Hengs Technology, a company that focuses on solar plant development and EPC. This enables TAYA Group to provide a one-stop turnkey service for solar plants from development, EPC to investment.
If Jhih-Guang Energy is included, the total installed capacity is around 250MW, which will contribute NT$1.5 billion to the Group's annual revenue, and will also contribute to a steady increase in annual revenue from electricity sales. By the end of next year, the Group hopes to reach the target of 300 MW, and in the future, it hopes to increase the scale by an average of more than 50 MW of installed capacity each year for growth momentum.
Shen pointed out that ground-mounted solar energy systems involves fish and electricity symbiosis, which requires communication with farmers or landowners, and also involves the issue of conflicting interests. Therefore, the preparation work is much more complicated than roof-based solar energy systems. However, the Group is still actively planning for new sites to be listed and operated every year. Therefore, for the outlook of 2022, he is cautiously optimistic that in the medium to long term, under emerging green energy trends, the Group's solar business will not only gradually increase in profit contributions, but also further stabilize regular fixed income for the Group.
The March 3 blackout incident in Taiwan this year has made the issue of energy and electricity consumption a hot topic of discussion. The National Development Council recently announced Taiwan's 2050 net-zero emissions roadmap, and the TAYA Group, as company that transitioned from an energy demander to supplier, is committed to playing an integral role. Shen noted that "Net-zero carbon emissions is already a key issue for all companies, and if you do not participate, you await elimination by the market." On its path to meeting the RE100 global initiative targets, the Group is not only selling power to Taipower, but also building its own solar power plants and energy storage devices to assist in the energy transition and build a more sustainable future.
Shen further points out that energy demand is often proportional to GDP growth, and Taiwan's GDP has performed relatively well despite the global pandemic, coupled with the return of overseas Taiwanese businesses in recent years, the demand for energy and electricity has also climbed. However, he believes that the national energy development plan must be free from political partisanship and interference, and that the relevant infrastructure development and goals cannot be achieved overnight, but require five or ten years of continuous planning.
"If we have a shortage of energy today, then either the country has underestimated the demand or the infrastructure development has been delayed in the past," Shen said, adding that it is likely to be both, but now it is meaningless to discuss who caused the delay. He believes that we must understand that the current infrastructure development is for planning the next five or ten years, "today it is more challenging; if there was a delay in the past, we not only need to make up for gaps, but also accelerate the pace of energy infrastructure development".
Nowadays, the domestic energy structure is changing, and the proportion of renewable energy demand has increased greatly, but among them, wind power and solar energy may cause unstable power supply due to climate problems, which means energy storage shall play an important function. This means that energy storage plays a pivotal role in the energy structure adjustment. Therefore, in addition to solar energy EPC (engineering, procurement, and construction), the Group's subsidiary, Hengs Technology, is also developing energy storage solutions. The Group’s other subsidiary, Union Storage Energy System is also involved in this field. This means that Ta Ya has two important supporting pillars in the high-potential energy storage business.
TAYA Group has slowly expanded from its original business of wire and cable to energy generation, transmission, conversion, storage and management, and is developing green energy and energy storage solutions based on its heritage and insights. As a corporate citizen, TAYA Group is not only committed to fulfilling its corporate social responsibility, but has also explored an innovative direction of sustainable management for itself, leading the Group to the next golden 60 years.
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