TAIPEI -- A pledge by Taiwan President Tsai Ing-wen to end nuclear power generation by 2025 is looking increasingly problematical as questions mount about how the industrialized island will replace the 12% of electricity supplied by the country's three nuclear plants.
The government's multibillion dollar plan offers significant growth prospects for Taiwan's wind and solar power generation industries, which have focused largely on exports in the face of the island's widespread use of fossil fuels for cheap electricity.
However, some energy experts doubt whether renewables can fully replace nuclear power, even with government support, while the alternative of adding more coal-fired plans would add to pollution levels.
Tsai, who took office in May, plans to allow the nuclear power plants to expire naturally when the number of spent fuel rods exceeds storage capacity. That will happen by 2025, according to the government, although state-run Taiwan Power may keep the first plant in operation longer to provide power at peak periods during the transition to renewables.
The island's Atomic Energy Council, an independent agency, is currently evaluating the operational life of the No. 1 plant, which would normally be closed in 2018, according to the Bureau of Energy, part of the Ministry of Economic Affairs. It will make a decision based on the council's findings.
Popular opposition to nuclear power has grown in recent years, focusing on plans to open a $9.3 billion fourth plant. Mass protests, some attracting 100,000 people, were held over the three years after the 2011 Fukushima nuclear plant meltdown in Japan. Taiwan is vulnerable to earthquakes, the root cause of the Fukushima accident.
Former President Ma Ying-jeou, backed by a political party that supported nuclear power, ordered a halt to construction of the fourth plant as protests mounted, and had earlier approved a renewable energy development law designed to cut carbon dioxide emissions to 2000 levels by 2025 by requiring the use of alternative sources. The Ma administration also bought power generated from solar panels located at homes and businesses.
Tsai aims to advance these programs by raising Taiwan's renewable energy generating capacity from 7 gigawatts to 20 GW by 2025, the energy bureau told the Nikkei Asian Review. The cabinet is also considering whether to increase the price paid to private producers for peak hour electricity, which would make renewables more competitive and discourage the use of imported fossil fuels.
"We will gradually adjust our energy options based on the concepts of sustainability," Tsai said in her May 20 inauguration speech. "After all, we only have one earth, and we only have one Taiwan."
The government will spend 540.3 billion New Taiwanese dollars ($17 billion) to develop offshore wind power and NT$1.2 trillion for solar energy, according to the energy bureau. The overall renewable energy budget will exceed NT$7 trillion next year, mainly to finance technology research and development and to provide subsides for equipment purchases.
"We are supportive of the new government to promote renewable energy as photovoltaic companies are focused mainly on overseas sales," said Tina Huang, investor relations officer of Motech Industries, Taiwan's biggest solar cell maker and one of the world's top 10 producers. "They've said this is a major future trend, so we're watching eagerly."
However, critics accuse the government of a lack of commitment to the plan, pointing out that it has not installed solar panels on its own properties. "Solar power is insufficient now, so we need to remind the government," said Lee Wen-hsiang, an aide to ruling party lawmaker Yu Wan-ju, who advocates a stronger solar push. "A lot of government departments haven't installed panels and even a lot of railway stations haven't done it."
To ensure stable electricity supplies until renewable energy takes full effect, officials are working on a broad "reform plan" for power consumption. This will include a more stable power grid, the use of "smart" technology, and the development of more efficient fossil fuel power plants. By 2023, the country will consume 3 million tons of natural gas a year through new receiving stations.
"If power runs short in the near term, and in the event that renewable energy makes up a small share of our sources, by making adjustments to the existing grid we can still provide a stable electricity supply," the energy bureau said.
Renewable energy budgeting plans have not yet been released, but some funds are expected to be used to open a science and technology park in the southern city of Tainan to develop renewable energy technologies.
Government plans call for the installation of 20 GW of solar power capacity by 2025 -- an increase of more than 20-fold over 10 years. The energy bureau estimates that 4.2 GW of wind power capacity will be in place by 2025, compared to 647 megawatts last year, while 2.15 GW will be generated from hydroelectric power, a small increase over the 2015 level. Biomass and geothermal energy will contribute smaller amounts to the renewables portfolio.
Renewable energy initiatives so far have struggled because low global energy prices have reduced fossil fuel power generation costs, raising a significant competitive hurdle for wind and solar generation.
Payments for energy produced by renewables are lower than in Japan and the Philippines, discouraging individuals and businesses from investing in solar equipment, even if they can eventually recover their investment by selling the energy back to the grid, Huang said.
"A reform is required for Taiwan's power structure, including ... the implementation of time-of-use rates [paid by consumers] to reduce peak-time electricity demand," said Patrick Wu, a solar energy analyst with the government-affiliated research firm Market Intelligence & Consulting Institute, in Taipei.
"Only by undertaking those initiatives may Taiwan's renewable energy stand a chance of challenging the position of traditional energy such as petrochemicals," he said.
Corrine Lin, assistant research manager of Taipei-based market research firm EnergyTrend, said the use of solar power is dependent on access to land for solar farms. Much of Taiwan's land is already highly developed and land prices can be high. Still, solar capacity has increased annually since 2012 to 842 MW last year.
Taiwan's solar energy industry, based around a photovoltaic panel sector with revenues of NT$100 billion last year, can produce systems with cell capacity of up to 12 GW -- a thousand times the output of a typical solar farm. Most of Taiwan's production is exported to overseas markets, including China.
"If Taiwan's government is adding to every year's installation target, that will be good news for the cell and module makers," Lin said.
Wind power also stands to gain. The government plans to build an offshore wind power industry with a generating capacity of 3 GW by 2025, compared with zero now. There is a lack of space for wind power sites along the gusty northwest coast, but areas are still available along the coast of the Taiwan Strait, which separates Taiwan from China.
Swancor Renewable Energy of Taiwan is developing a wind farm along this coast to supply 128 MW of capacity to the Taiwan Power grid by 2019. The project, Formosa I, includes 32 turbines that will be placed up to 6km offshore. The first phase will start operating by the end of 2016. Most of Swancor's business is in China.
Swancor Group chairman Robert Tsai said Taipei should help the industry by expanding ports near offshore projects and increasing financing. "The Taiwan government should expand port facilities so turbines, generators and related materials can be easily towed out to sea," he said. "Taiwan needs the ports, because [the wind power units] are big objects, like 700 to 800 tons. With the goal for 2025, this is something that has to be done right away."
Taiwan state-owned banks do not offer loans for offshore wind power, Tsai added. Projects such as Formosa I, which will cost more than NT$20 billion, need "local financial support power," he said.
T.R. Cheng, secretary general of the 100-member Taiwan Wind Energy Association, called for a system of environmental impact reporting and the issuance of legal permits for offshore wind power, which he said has revenue growth potential of $300 billion. "There are a lot of requirements the government needs to set or I'm afraid we can't get there," Cheng said.