Nukes and Uncertainty Charge Taiwan’s Energy Debate

Kuosheng Nuclear Power Plant

Idled nuclear reactors are being restarted, but policy uncertainty and capacity limitations continue to trouble Taiwan’s power sector.

After sitting idle since November 30 last year, reactor 1 at Kuosheng Nuclear Power Plant 2 (NPP 2) has resumed operations this week in time to meet summer peak demand. As of publication the reactor was running at 50% of its power-generating capacity, but that figure will likely rise to over 90% by week’s end.

Resumption of operations at Kuosheng caps a nearly year-long effort to at least partially resolve the spent fuel storage problem that has been impeding operations at Jinshan NPP 1 and at Kuosheng. Reactor 2 at Jinshan NPP 1 went offline last week after a transmission tower at the power plant collapsed during torrential rains, yet the shutdown occurred only a week before the reactor was to be shut down anyway due to Taipower’s inability to refuel it.

With the spent fuel pools at both Kuosheng and Jinshan either completely or almost completely full, spent fuel cannot be removed from the reactors and new fuel cannot be added. Plans submitted to the Atomic Energy Council (AEC) for conversion of loading pools into spent fuel storage in Kuosheng reactor 1 were finally approved in April and the work completed in May. Sufficient space in the spent fuel storage pools has since been created, and the reactor was inspected and approved by the AEC as of June 9 for the restart of power generation.

With the shutdown of Jinshan reactor 2 on June 3, nuclear power had diminished to only 3% of total power generation, down from some 19% in 2014. Nuclear power is rebounding, however, and this week will also see resumption of operations at Maanshan NPP 3 reactor 1 in Pingtung. This reactor was taken down for refueling and service in April, but according to Taipower spokesperson Frank Lin, during these routine operations a minor defect was discovered in a control rod.  A replacement part had to be acquired from U.S.-based vendor Westinghouse, which also dispatched an installation crew. The work was completed May 24.

The resumption of operations at these two reactors will see nuclear power’s share of Taiwan’s total power generation rise to 9% – welcome news for Taiwan’s air quality. Coal- and natural gas-fired generation has been used to replace nuclear power and has accounted for over 90% of generation in recent weeks, up from 78% in 2014. The Environmental Protection Administration attributes more than two-thirds of Taiwan’s carbon dioxide emissions to power generation, and the rising deployment of fossil fuels has caused an increase in emissions.

The dramatic recent fluctuations in the deployment of nuclear power point to more serious policy uncertainties in Taiwan’s power sector, however. The government is planning sweeping changes in how Taiwan generates and consumes electricity. The plan, which has now been codified into several statutes, including the recently amended Electricity Act and the Greenhouse Gas Reduction and Mitigation Act, calls for completely eliminating nuclear power and generating 20% of all power from renewable sources by 2025 – while reducing carbon dioxide emissions by 20% off 2005’s total emissions by 2030.

The government has also promised that there will be no interruptions in service, no compromise on reliability, and no sudden or dramatic price hikes.

It’s a bold vision, but implementing it is certain to be an immense challenge. In the complex approval process for renewable energy power projects, many property and land use issues are still unresolved and best practices have yet to be established. As yet, none of the ground-mounted solar power farms that have long been considered essential for Taiwan to reach its goal of 20GW of installed solar capacity by 2025 have been installed or even approved. An additional 100MW of onshore wind capacity is now being planned to add to the 680MW currently installed, but is unlikely to have a big impact on Taiwan’s overall power generation.

Although the additional 3,000MW planned for offshore wind farms would be more significant, Taiwan’s forays into the extremely expensive and challenging area of offshore wind power have been progressing slowly. Two offshore wind turbines have been installed off the coast of Changhua, with a combined installed capacity of just 8MW.  Reaching 3,000MW will require hundreds of turbines built on a tectonically active seabed that also provides an essential habitat for endangered species and supports Taiwan’s fishing industry.

Meanwhile, successive governments’ failures to address Taiwan’s nuclear waste issues, plus virulent political opposition to nuclear power, have resulted in the closure of both reactors at the Jinshan Nuclear Power Plant 1 as well as reactor 2 at Kuosheng years ahead of retirement. The early shuttering of nuclear reactors, combined with the lagging installation of renewable energy facilities, will only exacerbate the level of carbon emissions. Further, Taiwan’s overall energy demand continues to rise, and the economy now faces the specter of shortfalls in supply during peak demand hours.

During this period of uncertainty, AmCham Taipei in its recently published 2017 Taiwan White Paper has urged the government to provide a clear energy transition roadmap and employ careful management to avoid any moves that would impact the reliability of the power supply or result in price shocks, as has happened in other markets over the years. Many of Taiwan’s most vital high-tech manufacturers are highly reliant on the stability of the power supply, and disruptions of even milliseconds can result in huge damage to production lines. The Chamber also notes that as an island, Taiwan doesn’t have the luxury of importing energy from outside of its grid to compensate for power irregularities.

Guaranteeing that the manufacturing sector will always have access to needed power is vital to Taiwan’s economy. The Chamber strongly encourages Taiwan to maintain sufficient capacity of conventional power sources, particularly natural gas, as it builds up its capacity in renewable energy. AmCham also encourages the government to enact Demand-Response and other measures as ways of encouraging large-scale power consumers to shift consumption patterns away from peak hours.

At the same time, AmCham is also encouraging the government to be more innovative in its approach to renewable energies by opening up bidding processes to new materials and technologies and to create the regulatory framework necessary for new energies to thrive. Intermittent renewable energies bring new challenges in terms of integration and supply management, but they also have the potential to be great opportunities for Taiwan’s industrial sector. For example, successfully developing a thriving offshore wind energy ecosystem of experienced installers and a comprehensive supply chain for such equipment as oversized offshore cranes, jack-up boats, and essential components could present Taiwan with a dynamic new industry for the future.

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