Taiwan's Tedious Nuclear Saga

At long last, Taiwan's Fourth Nuclear Power Plant, still uncompleted after what might be a record-setting 14 years of construction and slated for commissioning in 2016, has now entered the phase where all systems are undergoing testing.

The fate of No. 4, having cost US$10 billion so far, remains hazy. The opposition Democratic Progressive Party (DPP) vehemently opposes the last fund injection needed to get the thing running, while the ruling Kuomintang (KMT) government isn't keen to have an ugly nuclear controversy mess up important local elections in 2014. A foolproof bet is that the island's reliance on imported fossil fuels is to grow greatly.

Taiwan has three nuclear plants built in the 1980s, which produce about 9 percent of the island's energy. Due to Japan's Fukushima disaster, fears of a possible earthquake or tsunami rose in Taiwan, compelling President Ma Ying-jeou to pledge that the existing plants' operational lifespans won't be extended. While the DPP, riding the anti-nuclear wave, wants to have the last of the three offline in 2025 and no new ones, the Ma government supports No. 4's completion but not necessarily operation, with the stated rationale being that a penalty for breach of contract - according to him, hefty enough to push up electricity prices painfully - must be avoided. But Ma is also playing for time, dodging controversies until after the next elections.

"Although it is still too early to predict the impact of the No. 4 nuke plant issue on the 2014 elections, it will not result in a 'positive' impact on the KMT, especially in New Taipei City," said Wang Yeh-lih, chair of the Department of Political Science at National Taiwan University in Taipei, referring to the seven-in-one municipality elections to be held in November 2014.

Losing hearts and minds

State-run Taipower Co., which operates the island's nuclear plants, reportedly plans to install fuel rods in one of No. 4's two reactors starting in the spring of 2014. The likely controversy this will cause will coincide with the run-up to the elections in which New Taipei City, where No. 4 is located, and Taipei City are key battlegrounds. Combined, these two constituencies have a population of 7 million, meaning that more than one third of the Taiwanese electorate resides in an area that most likely could not be evacuated in a timely manner should a disaster at No. 4 occur.

Unsurprisingly, all opinion polls conducted after Fukushima show that the two constituencies don't want that plant. This supplies the DPP with the hope that it can take over the reins in Taipei and New Taipei from the KMT in 2014.

"The support for No. 4 has been weakened significantly after Fukushima," said Lai I-chung, a researcher with the DPP-leaning Taiwan Thinktank.

He said the combination of lower oil prices, and loss-making Taipower being under pressure after pushing for higher electricity prices last year "has reduced the public's trust about its capability to run the nuclear power plant."

If the DPP takes power in either New Taipei or Taipei, it would deal a major blow to Ma's standing within the KMT. His public approval ratings have been hovering slightly below the dismal 15%-mark for some time, there is inner-party rebellion and a major loss two years before the end of his final term in 2016 would effectively turn him into a lame duck. His favored successor, newly sworn in Premier Jiang Yi-huah, would most likely lose his job, leaving Ma vulnerable after retirement in a political landscape where one of his predecessors is in jail on corruption charges and another is in court on similar charges.

Shortly after Ma ended his term as Taipei Mayor in 2006, he was indicted for using public money to pay for his daughter's living expenses and to buy dog feed, a precarious episode he has certainly not forgotten.

No. 4's near completion could not come at a worse time for current Taipei Mayor Hau Lung-bin and New Taipei Mayor Eric Chu, both of whom have ambitions to run for president as the KMT's candidate in 2016 and previously broke with the KMT line on the nuclear plant.

Within the DPP, the battle between former chairperson Tsai Ing-wen and current chairperson Su Tseng-chang for supremacy could be affected. Tsai in the past has supported the Ma government's stance on No. 4, meaning looming anti-nuclear protests could hurt her and help Su, who has firmly opposed nuclear power.

Figures don't add up

Intriguingly, whatever Taiwan's political cast does with No. 4, the island's energy situation will still be far from ideal. While Taiwan relies on imports for over 99 percent of its primary energy needs, mainly in the form of coal and crude oil, No. 4's two reactors could only generate 7 percent of total electricity needs. Renewables presently account for about 5 percent of electricity-generating capacity, and the KMT says it will push that number to 15 percent by 2025, but this seems like wishful thinking. At a glance, Taiwan is blessed with abundant potential for wind and solar power, but significant electricity price increases are politically unfeasible, and investors in expensive renewable energy-generating facilities stay away because consecutive administrations have too often tinkered with the feed-in tariffs paid to producers of renewable energy. Realistically, more imports of coal, crude and natural gas are the only option, with the resultant impact on the domestic economy.

"Over the past two decades, as a share of Taiwan's GDP, the value of imported energy has increased five-fold to its current level of 15 percent of Taiwan's GDP," said Ronald A. Edwards, an economist at Tamkang University in Taipei.

"Taiwan's economic exposure to crude oil and coal price fluctuations is increasing, which will do little to end the current recession or mitigate future ones."