Taiwan's Energy Conundrum

MAY 2012 AsiaSpecial Program RepoRt No. 146 Taiwan’s Energy Conundrum SSU-LI CHANG, “An Overview of Energy Policy and Usage in Taiwan” PAGE 4 HERNG-SHINN HWANG, “Progress and Prospects EDITED BY BRYCE WAKEFIELD for Renewable Energy in Taiwan” PAGE 14 ABSTRACT: This Special Report explores the complex set of opportunities and challenges CHI-YUAN LIANG, inherent in Taiwan’s energy profile. Ssu-li Chang describes the profile, and also consid- “Energy Security and Policy PAGE 21 ers the possible impact of changed pricing mechanisms and increased reliance on nuclear in Taiwan” energy. Herng-Shinn Hwang, outlines the promise of alternative “green” energies. Chi- HONGYI LAI, “Taiwan- yuan Liang surveys Taiwan’s energy security, comparing Taiwan’s performance in energy Mainland China Energy Ties: usage with major nations around the world. And Hongyi Lai examines the possibility of Cooperation and Potential PAGE 29 Conflict” energy cooperation and the potential consequences on the island’s energy supply of conflict between Taiwan and mainland China. Introduction BRYCE WAKEFIELD n June 2011, anti-nuclear rallies assembled President Chen Shui-bian of the Democratic outside the Legislative Yuan, Taiwan’s parlia- Progressive Party (DPP) to halt construction Iment, protesting the government’s approval of the New Taipei City plant. After achiev- of a $486 million budget to continue construc- ing office in 2008, the administration of the tion on the island’s fourth nuclear power plant Nationalist Party’s (KMT) Ma Ying-jeou in New Taipei City. Along with protests over restarted the project. the preceding months that attracted more than The government’s willingness to ignore pub- 100,000 people, the rallies demonstrate that the lic discontent by building the new power plant failure of the Fukushima power plant after the highlights Taiwan’s energy conundrum. As tsunami in Japan in March of that year energized reflected by the papers in this report, penned opposition to such facilities in Taiwan. Indeed, by the participants of a seminar held at the opposition groups staged similar protests across Woodrow Wilson Center, Taiwan’s geography the island on the first anniversary of the disaster looms large in considerations of its energy strat- in Japan. egy. Taiwan has practically exhausted the indig- However, anti-nuclear sentiment in Taiwan enous fossil fuels that three decades ago supplied is nothing new. In 2000, for example, pub- 15-20 percent of its energy, while industrializa- lic pressure prompted the government led by tion has increased demand for power. Because Bryce Wakefield is program associate with the Woodrow Wilson Center’s Asia Program. its insular geography precludes direct electricity gas emissions. Taiwan has no standing within imports from foreign grids, Taiwan now has to the United Nations Framework Convention import over 99 percent of the energy resources on Climate Change, the treaty framework to it either uses to generate electricity or consumes which the protocol was an addition. Its voluntary raw. Even if statistics are adjusted to count nuclear adherence to Kyoto, then, is designed to enhance fuel—with its low volume-to-energy ratio—as its status as a responsible international citizen. an indigenous resource, the figure for Taiwan’s Taiwan will likely adopt a similar approach to energy resource imports still stands at 90 percent. any post-Kyoto framework aimed at reducing Taiwan’s geographical isolation and lack of greenhouse gases. This commitment to reducing natural resources are enough to give leaders in its carbon footprint only increases the island’s Taipei significant headaches over the issue of need for alternatives to fossil fuels. energy security. However, concerns about sup- The following chapters discuss these dynamics ply are compounded by the presence, and poten- in greater detail. Ssu-li Chang, professor at the tial threat, of mainland China. China’s increased Institute of Natural Resource Management at energy demand to fuel its supercharged economy National Taipei University and Taiwan Director is placing upward pressure on the prices of the of CPC Corporation, describes the challenges fossil fuels that also dominate Taiwan’s energy confronting Taiwan in light of its energy pro- profile. Also, many Taiwanese view energy as an file, and also considers the impact that changed issue over which, in times of political friction, pricing mechanisms and increased reliance on the Chinese Communist Party (CCP) on the nuclear energy may have on that profile. To deal mainland could gain a strategic chokehold on with the supply issues thrown up by Taiwan’s iso- their island, which the CCP views as an errant lation and lack of indigenous resources, Chang province belonging under Beijing’s jurisdiction. explains the Taiwanese government’s new Nevertheless, there have been recent moves energy policy, which is focused on maintaining by CCP leaders on the mainland and the KMT efficiency, cleanliness, and stabilization of supply. in Taiwan to explore areas for energy coopera- There are plans to drop energy intensity levels to tion. Such moves serve the Ma administration’s 20 percent of 2005 levels by 2015, and to lower broader strategy of fostering good relations carbon dioxide (CO2) emissions to 2005 levels with Beijing. However, cooperation requires by 2020, while constructing an energy supply sustained commitment by both the mainland system to meet the demands of development that and Taiwan, something that cannot be guaran- would accompany the government’s target of 6 teed. For example, deteriorating ties under the percent annual economic growth. former DPP government between 2000 and How might Taiwan attain the dual goals of 2008 effectively meant that a 1994 agreement economic development and cleaner energy? for energy cooperation with the mainland was Chang suggests that increasing the nation’s put on hold, and this may again happen under nuclear energy output is a partial solution. future governments. However, Herng-Shinn Hwang, director of Another area where China matters in the con- Songya Technology, LLC, who advised the pre- text of Taiwan’s energy profile is in Taipei’s com- vious DPP government on energy issues, believes mitment to climate change regimes. The island’s that nuclear power plants generate unwelcome ambiguous status in the international commu- problems, such as waste and safety concerns. nity—that is, its desire for sovereign recognition Hwang sees more promise in alternative “green” from other states despite a lack of formal inde- energies. Southern Taiwan receives about 300 pendence—has led Taiwan to seek ways to carve days of sunlight a year, making solar energy— out “diplomatic space” by voluntarily adhering which may require massive initial outlays, but to global norms. Taipei has attempted to do this is virtually free once panels are installed—an in part by adhering to the 1997 Kyoto proto- attractive option for the future. Taiwan also has col, an international agreement on greenhouse ample wind, and as an island will be able to take 2 AsIA PRoGRAm sPECIAL REPort advantage of wave power technology once this outlines failed attempts to foster cross-Strait energy source becomes economically feasible. cooperation on coal and oil development issues, Taiwan, according to Hwang, has the techno- as well as a number of successful joint develop- logical prowess and the motivation to become a ment efforts. Taiwan, with its advanced techno- leader in the field of alternative energy, and thus logical base, has much to teach China, which should seriously reconsider the development of is suffering the environmental consequences any more nuclear facilities. of its rapid development, and there is scope for However, while noting the importance of cooperation in the development of nuclear and renewable energy, Chi-yuan Liang, a former green technologies. At the same time, Taiwan’s minister without portfolio in Taiwan’s Executive extensive reliance on oil and natural gas means Yuan, points out that green technologies are that the island would be highly vulnerable to not a sufficient replacement for inefficient and Chinese blockades, should there be future fric- polluting fuels—such as coal—already used by tion or even war between Taiwan and China. Taiwan. While Liang stresses that research and Taiwan’s political debate on energy security development in green technology is necessary for therefore revolves not so much around objec- Taiwan to increase its long-term competitive- tives as on strategies for achieving these objec- ness in renewable energy industries, like Chang tives. Both major parties seek clean solutions to he argues that modified pricing systems and a energy scarcity. DPP supporters want to see less restructuring of the energy sector will be cru- reliance on nuclear energy, while at the same cial. The promotion of less energy-intensive sec- time shunning cooperation and development tors, such as service industries, and government of other energy opportunities with mainland regulations to ensure offsets for energy-intensive China that could offset Taiwan’s level of nuclear industries can also promote efficiency and curb dependence. The KMT, meanwhile, proclaims CO2 emissions. Liang also believes that Taiwan the need for non-polluting power, but is com- and the United States should explore avenues for mitted to building nuclear power plants whose technical and political cooperation on energy waste-management and safety practices will and climate change, such as the joint develop- elicit public concern. In addition, the KMT’s ment of green and nuclear technologies, and the policy of cooperation with China may not be promotion of environmentally friendly practices politically sustainable under future governments. in the Third World. Taiwan’s energy conundrum looks set to last into Hongyi Lai, associate professor at the the future. University of Nottingham, tackles the always contentious issue of Taiwan’s relations with the Chinese mainland, placing them within the con- text of Taiwan’s energy strategy, and outlining several areas for cooperation on energy-related issues between Taiwan and the mainland.

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