TAIPEI -- Taiwan's Kuosheng Nuclear Power Plant 2 reactor 1 shut down last week, six months before its scheduled retirement on Dec. 27 due to spent fuel-storage capacity constraints that prevent it from being refueled.
The closure of the reactor marks another milestone in the island's energy transition, a key initiative of President Tsai Ing-wen. Her administration aims to shut down all of Taiwan's nuclear reactors by mid-2025 and replace their power with huge swathes of renewable energy and natural gas power. Kuosheng reactor 1 is the third of Taiwan's six reactors to be shut down, with the remaining operational reactors due to close at the rate of one per year, starting in 2023 through 2025.
The 985-megawatt Kuosheng reactor 1 generated nearly 3% of Taiwan's total power, and its loss comes amid surging power demand and capacity constraints that have already led to two blackouts.
Taipower spokesman Albert Chang said in a phone interview that the loss of the reactor will not impact power supply margins.
"We have anticipated the shutdown for several months and Taipower has controlled for this" through the commissioning of a new 500MW combined cycle gas turbine (CCGT) at Chiahuei unit 2, as well as 500MW of new solar PV installations. "We have confidence that we can provide full power supply this summer with no problems," he said.
The Chiahuei 2 CCGT unit combined with solar PV will, however, be hard-pressed to replace the power generated by Kuosheng reactor 1. Last March, before Taipower began reducing the reactor's output as it neared its end, the state-owned utility and Taiwan's only nuclear operator had run the reactor at 101.94% capacity, generating 710,131 megawatt hours, or 22,907MWh daily.
Solar power generates at a far lower capacity of only 15% in Taiwan, amounting to only 1,800MWh daily. The Chiahuei 2 CCGT unit can operate at very high capacities of 98% but its smaller size means it can only generate around 11,760MWh daily. The combined output of the replacement power would only amount to 13,560MWh daily, leaving a 40% gap.
"It is simply not enough to deal with expected record-high electricity demand this summer," said Yeh Tsung-Kuang, professor of nuclear engineering at National Tsing-Hua University. "It is inevitable that there will be outages and electricity rationing for the rest of this summer."
This gap will likely be filled with CCGT-generated power, which raises considerations over energy security and greenhouse gas emissions.
Nuclear power generated 12.7% of the power on state-utility Taiwan Power Company (Taipower)'s grid last year while coal generated 36.4% (plus 1.7% for coal-fired cogeneration). Along with eliminating nuclear power generation, Taiwan aims to reduce coal-fired power to 30% by installing 27 gigawatts of renewables to generate 20% of power demand, and expanding natural gas fired power to generate 50% of demand.
Along with realizing the ruling DPP's vision of a "nuclear free homeland," the energy transition policy intends to reduce Taiwan's carbon footprint and position the island as a green energy leader in Asia.
Bolstered by a series of legislative and policy initiatives, including amendments to the Electricity Act that legally mandated the elimination of nuclear power by 2025 as well as liberalizing electricity sales, the government expects the energy transition to generate NT$1 trillion (US$ 36 billion) in investments, NT$1.2 trillion (US$43.3 billion) in output value, and 20,000 job opportunities by 2025.
Tsai touted Taiwan as "a leading center of green energy in the Asia-Pacific region" in her opening remarks at EnergyTaiwan, Taiwan's premier renewable energy trade show, last October.
The rollout of renewables and natural gas capacity, however, has faced a series of obstacles, including local opposition, government infighting and the impact of the pandemic.
Renewable energy accounted for just 5.8% of power generation in 2020, and the amount of new solar and offshore wind capacity added since then is negligible. Solar power stands at 6.12GW of installed capacity and will need to see almost another 14GW by 2025 to meet its goal.
Taiwan has established the largest offshore wind sector in Asia outside of China, but early projects were hit hard by the pandemic, and most analysts see Taiwan not reaching its goal of 5.7GW until 2026 or 2027.
Further, while Taiwan is installing massive new natural gas turbines around the island, these are entirely dependent on imported LNG. Taiwan's LNG import capacity is already maxed out and new terminals have faced serious opposition from environmentalists. A referendum asking voters to kill a third LNG terminal is on the ballot for Aug. 28. Even if it fails, the project is already delayed until after 2025.
The elimination of nuclear power is facing a deadline that cannot be extended. Although a referendum passed in 2018 removed the legal mandate to eliminate nuclear power without adequate spent nuclear-fuel storage capacity, extending the lives of the plants is a technical impossibility. Another referendum on the Aug. 28 ballot will ask voters to approve restarting the controversial Lungmen Nuclear Power Plant 4 project, but this too would take years before coming online. The elimination of all nuclear power generation as of May 17, 2025 -- when the last reactor's operating license expires -- is almost certain.
Meanwhile, power demand continues to rise. Demand increased 4.5% between January and April this year, on top of a 2.08% rise last year. The Bureau of Energy (BOE) sees demand rising 2.5% or more annually through 2027. Taiwan's booming exports made it one of the world's top-performing economies in 2020, with first quarter 2021 gross domestic product growth exceeding 8%. The Chunghua Institution for Economic Research (CIER) sees Taiwan growing 4.8% in 2021 despite an ongoing pandemic-induced lockdown and 3.23% in 2022.
"We hope to decouple economic growth from power consumption, but so far we don't see that decoupling happening," observed BOE Deputy Director-General Lee Chun-li.
Taiwan got an early glimpse of the impact of inadequate power generation last month when peak demand reached record highs. Blackouts occurred twice, on May 13 and May 17. Large volumes of LNG capacity were offline due to annual maintenance scheduled in anticipation of low demand during the April-May rainy season. The rains, however, failed to materialize amid a 100-year drought, and Taipower struggled to maintain adequate reserve margins.
Tsai has pledged to put Taiwan on the path toward net-zero emissions by 2050, aligning Taiwan with 59 countries around the world. The island has made progress in reducing emissions since they peaked at 300.8 million metric tons in 2007, according to data from the Taiwan Environmental Protection Administration, declining 1.52% to 296.24 million metric tons in 2018.
But with renewable energy development stalled, the gap in the power supply created by the loss of nuclear power will likely be filled by natural gas-fired power, or worse, coal. Nuclear power emits little directly, but including construction and uranium mining, is estimated to emit 400 grams per kilowatt hour.
The U.S. Environmental Protection Agency estimates combined cycle gas turbine emissions at 412 kilograms per MWh, while coal emits 1,000 kilograms per MWh. Replacing just Kuosheng reactor-1's lost power with natural gas will add 8,696 tons to Taiwan's carbon emissions every day -- or 3.17 million tons per year -- while coal would add 7.7 million tons annually.
This would not only delay Taiwan's net-zero goals but also impact trade. The European Union is floating the Carbon Border Adjustment Mechanism, a tariff that would penalize laggards in emissions reductions. The EU is Taiwan's fourth-largest export destination, with an annual trading value of about 50.5 billion eurodollars (1.68 trillion New Taiwan dollars). An economist with CIER not authorized to speak to the media noted that "If the EU imposes carbon tariffs, it will seriously impact Taiwan's export competitiveness."
Taiwan's heavy industries, including semiconductors, petrochemicals and steel, consume 37.47% of the island's power and are enabled by Taiwan's low power prices. Average electricity rates in Taiwan are NT$2.5 ($0.09) per kWh, among the lowest in the world and well below the price Taipower pays for renewable energy, which averages NT$4.87 per kWh, according to Taipower data.
Raising prices would incentivize energy conservation and reorient Taiwan's industrial policy, gradually eliminating less competitive industries, experts say.
"Power prices should reflect the cost of the energy transition," observed Chien Ker-Hsuan, assistant professor at the Institute of Technology Management at National Tsing Hua University.
Nevertheless, BOE Deputy Director-General Lee remains sanguine.
"There have been some delays [in the energy transition], mostly due to the pandemic," he observed. "But the pandemic will pass, and we are very confident about 2025."