Concern is growing as to whether Taiwan can meet its objectives to both eliminate nuclear power and greatly cut carbon emissions by 2025. The reliance on nuclear has already fallen sharply, as several reactors that had to be temporarily shut down have not been brought back online. In the meantime, increased generation from coal-fired plants is taking up most of the slack. Due to regulatory and environmental obstacles, solar and wind projects are behind schedule.
A massive blackout on August 15 knocked out power for more than six million households and businesses throughout Taiwan. Beyond the immediate impact, it heightened fears that Taiwan may not be managing its energy transformation well, putting its critical manufacturing sector at risk.
Taiwan’s electronics and machinery sector accounts for more than 50% of exports for the trade-dependent nation, with major global players such as Taiwan Semiconductor Manufacturing Co. (TSMC), Pegatron, Hon Hai, Micron, and Corning operating at tremendous production capacity. High-tech manufacturing depends on reliable power, and even the briefest interruption in power can result in huge losses.
The August outage occurred when a contractor for state-run petroleum company CPC Corp., Taiwan accidentally interrupted gas supply to the nation’s largest gas-fired power plant in Taoyuan’s Datan Township while replacing power-supply components at a metering station. Although the interruption lasted for only two minutes, it caused all six units at the power plant to shut down, forcing 6.6 million households and businesses across the island to lose power for more than five hours.
Although the outage caused at least US$3 million in damages at over 150 companies, most of the biggest producers were spared as they are either located in science parks having independent power generation or have their own power generation system.
Nevertheless, the blackout – combined with a number of other recent incidents that have crimped Taiwan’s power supply and a declining reserve margin that has threatened the island with electricity shortages throughout the summer – has raised questions over Taiwan’s ability to ensure reliability and affordability as it attempts a transition to a radically different energy mix.
Government policy, now enshrined in law, is to carry out a massive transformation in Taiwan’s power supply, shuttering all three of its functional nuclear power plants and generating some 20% of total power needs from renewable energy by 2025. According to the plan, natural gas will be used to generate 50% of the power, with the remaining 30% fueled by coal.
Blame for the blackout was placed not only on the contractor but also CPC Corp. and its management personnel who were onsite but failed to follow SOPs regarding this kind of maintenance work, and also on the Taiwan Power Co. (Taipower) for insufficient oversight over the project.
Minister of Economic Affairs Lee Chih-kung and CPC Chairman Chen Chin-te both resigned to take responsibility for the mishap, and President Tsai Ing-wen took to Facebook to apologize for the event.
The blackout occurred during a heat wave in which temperatures surpassed 36 degree Celsius for much of the summer, driving peak demand above 36,000 megawatt-hours (MWh) on numerous occasions and bringing it within a hairsbreadth of maxing out Taipower’s reserves of 37,420MW, according to the utility’s data.
Other incidents lately had also impacted Taiwan’s power supply. The toppling of a transmission tower during a typhoon cut off the 1,300-MW coal-fired power plant of independent power provider (IPP) Ho-Ping Power Co. for several weeks at the end of July, removing nearly 4% of Taiwan’s capacity, and a tripped generator at the Taichung Power Plant’s Unit 7 temporarily took some 1.5% of Taipower’s capacity offline.
In the weeks leading up to the August 15 blackout, power disturbances and temporary brownouts had been occurring with some frequency, and even the Executive Yuan building had lost power briefly only a week earlier.
Efforts by the government to offer reassurances to energy users fell flat. “Taiwan does not have a power shortage problem,” then-Premier Lin Chuan was quoted as saying to the media the day after the blackout, stating that the cause of the incident was instead human error and “grid instability.”
An executive with an engineering company involved in Taiwan’s fossil fuel power capacity describes the government’s attitude as: “If we have 1MW of surplus, then we are not in shortage. If it’s not negative, then it’s positive. That is the problem!”
Following the blackout, President Tsai double-downed on her commitment to eliminating nuclear power and replacing it with renewable energy. “The government is promoting distributed green energy to avoid the situation where an incident at a single power station can affect the power supply for the whole country,” Tsai wrote on her Facebook page. “We will not change course. Today’s incident only makes us more determined.”
For several days during August, Taipower’s reserve margin fell to new lows of below 2%. Under the new Premier, William Lai, the government is now pushing to restore the margin to 7.5% by 2018 and then to 15% by 2025, by speeding up construction at several power-plant projects.
Reserve margins are based on the peak demand for power subtracted from the total capacity of the power system. Taipower has a total installed capacity of 41 gigawatts (GW), and as peak demand has never exceeded 37GW, Taipower in theory should have a comfortable reserve margin of 10%, well within international standards.
Installed capacity, however, is a gross measure of the total capacity of Taipower’s network (including IPPs), and includes power plants that have been idled due to repairs, or maintenance, or other issues. The actual amount of capacity that Taipower can access at any given moment, called “spinning reserve,” is much smaller, at some 37GW, according to Taipower’s website.
The major reason for the drop in the power reserve is the unavailability of several of the nuclear power units. Taipower has 5,144MW of installed nuclear power in its system, some 12% of the total, which previously generated 18% of Taiwan’s total power supply. But with three of six reactors currently offline for various reasons, nuclear now supplies only 2,845MWh, less than 9% of total generation. This past June 10, following the closure of the Jinshan power plant and prior to the restart of Kuosheng reactor-1, nuclear power fell to as low as 3% of Taiwan’s power generation when maintenance problems at the Maanshan plant took one of its reactors offline for weeks.
Taiwan has three operational nuclear power plants, each with two reactors: Jinshan and Kuosheng, both in New Taipei City in northern Taiwan, and Maanshan in southern Pingtung County. Construction of a fourth, at Lungmen, also in New Taipei City, remains unfinished and the project has been officially canceled by the government.
Taiwan’s policy has called for the nuclear power reactors to continue to operate until the end of their scheduled lifecycles. For the reactors at Jinshan that meant retirement dates of December 5, 2018 and July 15, 2019, respectively, with the Kuosheng reactors following on December 27, 2021, and March 14, 2023. Retirement of the last two reactors, at Maanshan, on July 26, 2024, and March 14, 2025, would mean Taiwan has achieved the goal of becoming “nuclear-free,” although it will still have decades of decommissioning work ahead of it and will need to care for the waste forever.
However, this timeline has been greatly accelerated due to the political controversy surrounding nuclear power. Jinshan reactor-1 has been offline since 2014 following an incident with its fuel rods, and Kuosheng reactor-2 was shuttered after a fire in May 2016. Although both have been okayed for restart by the country’s nuclear regulatory body, the Atomic Energy Council (AEC), the AEC has passed final responsibility for permitting the reactors to restart to the Legislative Yuan. The legislature, now firmly in the control of the staunchly anti-nuclear Democratic Progressive Party (DPP) and its allies, has refused to restart the reactors.
Meanwhile, Jinshan-2 went offline on June 3 due to torrential rains that wiped out a transmission line at the power plant. But that was only a week before the reactor was to be taken offline anyway because its spent fuel storage pools have been filled to capacity, preventing the reactor from being refueled.
Kuosheng-1 is currently operating after its loading pools were converted to spent fuel storage, allowing the reactor to be restarted after it too maxed out its spent fuel storage capacity last November. The reactor came back online June 19 and is currently the only reactor in northern Taiwan. It is operating at 99% capacity, according to data on the Taipower website, while the two reactors at Maanshan are at full capacity.
Following the blackout, then-Premier Lin stated that the government would consider restarting two of the shuttered reactors (Jinshan-2 is ineligible for restart as it has maxed out its spent fuel storage capacity and can no longer be refueled). “I would make a formal report to the Legislative Yuan for reactivation as a last resort in the event of a predicted power shortage,” Lin was quoted as saying in the media. Taipower spokesman Frank Lin says that this scenario is unlikely, however.
The government has set three conditions that must be met before the reactors will be restarted: a) efforts must first be made to restore capacity and stability to the grid through all other means besides nuclear, including conventional fossil fuels and renewable sources; b) Taipower must be able to give complete assurances that the nuclear reactors are safe to operate; and c) a social consensus must exist supporting the restart of the reactors.
Frank Lin says that Taipower has met the second condition, as the reactors have been certified for operation by the AEC. “There is no safety concern about the two units,” he said.
Meeting the third condition – social consensus – is less certain. A survey conducted by polling firm Taiwan Indicators Survey Research and released on August 28 indicated that 56% of polled adults support the restart of the two idled reactors as a means to prevent power shortages. The same survey, however, also revealed that 67% of respondents lack confidence that Taipower can safely manage a nuclear power accident. “Social consensus basically is a political issue,” says Frank Lin.
Restarting the stalled nuclear power plants for the duration of their licensures would raise Taiwan’s operating capacity by nearly 5% with emissions-free power. But that eventuality is considered extremely unlikely (see accompanying story), and already Kuosheng-2 and both Jinshan units have been removed from Taipower’s list of reserve capacity.
More coal than renewables
Despite the government’s avowed aim of promoting renewable energy sources, what has replaced nuclear power is less wind or solar than coal. Plants burning coal increased to over 40% of power generation this summer, while the contribution of oil and diesel also rose. Gas-fired power generation increased but less dramatically, as the supply is severely constrained by the amount of terminal and pipeline capacity.
Taiwan is nearly bereft of natural resources and must import 98% of its primary energy. To deliver natural gas from its source, mostly Qatar but also Indonesia and Australia, the natural gas is liquefied at extreme cryogenic temperatures and shipped in LNG tankers that must deliver their loads to specialized terminals. Taiwan has only two such terminals, in Taichung and Kaohsiung’s Yungan. A third has long been planned for Taoyuan, but the project has encountered repeated delays for environmental-impact reasons.
Taiwan’s recent heavy dependence on coal also contravenes its commitment to reduce its greenhouse gas emissions (GHG) as specified in the GHG Reduction Act of 2015. The Act stipulates the goal of reducing GHG emissions to no more than 50% of the 2005 emission level by 2050, while its stated targets in the spirit of the Paris Accord (to which Taiwan cannot be a signatory due to lack of United Nations membership) is to reduce its GHG by 50% from the business-as-usual level of 428 metric tons by 2030. That means Taiwan would emit only 214 metric million tons of GHG by 2030 – a 25% decrease from the current volume.
Electricity production is Taiwan’s largest consumer of primary energy, and the sector is also the largest emitter. The increasing amounts of coal-fired power recently are exacerbating the situation. Taipower is currently undertaking a number of projects, designed to improve the operating reserve, that will further expand its conventional fossil-fuel power generating capacity.
An example is the new 800MW ultrasupercritical unit 1 at the Talin coal-fired power plant in Kaohsiung, which has already reached full power ahead of schedule, as have the 800MW ultrasupercritical Linkou units 1 and 2 in New Taipei City. Unit 3 at Linkou is still under construction. At the Tatan gas-fired power plant that went down during the blackout, the 600MW combined-cycle gas unit 2 is already at full power, while unit 1 came online in late September and is ramping up to full power now.
Together with a series of additional upgrades scheduled for next year, “the new projects will add to the capacity and we can forecast that the power supply for next year should be much better than this year,” says Taipower spokesman Lin.
Nevertheless, industry insiders worry whether this capacity will be available next summer when it will be urgently needed once again. Delays in getting power projects approved by regulators and then during construction have been common in recent years, explaining why Taiwan has such slim reserve margins.
Taiwan’s ambitious energy transformation is going slower than expected. Taiwan currently has over 1GW of installed solar power capacity, but of the planned 1.54GW of additional solar power scheduled to be installed between July 2016 and July 2018, only about 400MW is currently in place. Taiwan has limited available area to install solar power, and much of the optimal land is already in use for agriculture. Plans for offshore wind are meanwhile being challenged by the local fishing industry and environmental groups. The Taiwan government is calling for 20GW of installed solar PV and 3.5GW of installed offshore wind to generate 20% of its power needs by 2025.
Major energy users in the manufacturing sector are increasingly skeptical that the targets can be met, and industry sources say the doubts are already affecting future investment planning.