Dec. 7 (Bloomberg) -- Formosa Plastics Group and Japan's Electric Power Development Co. are among eight competitors for rights to build power plants in Taiwan, a government official said.

Kuo Kuang Power Co., controlled by CPC Corp., and a Taiwan Cement Corp. subsidiary also entered bids, Wang Yunn-ming, deputy director-general of the energy bureau, said by telephone from Taipei today. The government and Taiwan Power Co. will choose winners by early March for permits to construct generators with a total installed capacity of 1,980 megawatts, he said.

``The competition is fierce,'' Wang said. ``About two or three'' of the bidders will win contracts, he said.

Taiwan is inviting private companies to build power plants to help prevent an electricity shortage. Taiwan's electricity consumption climbed to a record on July 23, reducing the reserve margin, or spare capacity at times of peak demand, to 5.13 percent, below the government's target of 16 percent.

The planned capacity of the eight bidders, including a Marubeni Corp. venture, total 6,000 megawatts, Wang said. Marubeni, based in Tokyo, is Japan's fifth-biggest trading company.

Taiwan may have a shortage of power in five years unless additional generators are built, the Ministry of Economic Affairs said in June last year.

State-run Taiwan Power, based in Taipei, generates about 75 percent of the electricity the island uses. Electric Power, known as J-Power, is Japan's biggest power wholesaler. Taiwan Cement is the island's biggest cement producer.

Taiwan's gross domestic product has expanded for 17 consecutive quarters, fueling demand for power. Electricity sales at Taiwan Power, the island's monopoly grid operator, increased an average 4.8 percent annually over the past five years, outpacing the 4.4 percent gain in Taiwan's installed capacity, according to the company's Web site.

To contact the reporter on the story: Yu-huay Sun in Taipei ysun7@bloomberg.net

Last Updated: December 7, 2007 00:34 EST