Taiwan learns to love nuclear, a little
Just as the sun seems to be setting on nuclear power in rich countries, Taiwan's voters have delivered it a new lease on life.
A plebiscite on whether to repeal a law requiring the country's four operating reactors to switch off by 2025 passed with 59.5% of the vote in the country's local elections on Saturday. As a result the government will drop plans to implement the target.
That's an unusual but welcome outcome for nuclear energy, which has been in retreat in developed markets ever since Japan's 2011 Tohoku earthquake and tsunami caused multiple meltdowns at Tokyo Electric Power Co's Fukushima Daiichi reactor. That disaster prompted a swath of the planet to rethink nuclear, with the immediate result that coal moved in to make up the shortfall.
In Japan, imports of thermal coal are up about 8.4% since the disaster and all but nine of its 42 reactors have been either shut down or mothballed while their owners fight through the courts to reopen them.
In Germany, the government's Energiewende policy has reduced nuclear from 25% of the generation mix in 2010 to 13% so far this year, leaving coal power with about the same share it had in 2010 despite a 20% increase in renewables.
That's worrying -- because for all its problems, nuclear power is still a more or less carbon-free way of producing electricity. A global phase-out of nuclear energy would result in a 7% increase in emissions, according to a 2013 paper in Climate Policy.
Closing unprofitable US nuclear plants early could increase that country's emissions by between 4% and 6%, according to a report this month from the Union of Concerned Scientists, a group that's historically been sceptical of nuclear power.
The government should consider carbon pricing and financial support for nuclear plants to stop them being replaced by natural gas or coal, the report also says.
The vote in Taiwan seems to be a realistic response to wider doubts in the electorate about the future of electricity generation. Of the 55% who voted, 79% backed a proposition to reduce output from coal-fired power plants by 1% a year. Some 76% supported a move to stop construction and expansion of such facilities, including one that's already underway. It's worth noting though, that overall support for ending a moratorium on nuclear power fell well short of those in favour of scaling back thermal.
Since 2009, when Taiwan's economy slowed because of the financial crisis, the country has cut nuclear-power generation by 46%, according to data compiled by Bloomberg Intelligence. That's been replaced by an 8.7% rise in coal and 53% increase in gas. More worryingly, oil has climbed 89%. Overall energy production jumped 11% over the period.
The country's electricity situation is already strained -- a significant issue, given the economy's dependence on energy-hungry activity such as semiconductor manufacturing. In August last year, the country's supply buckled when workers accidentally shut off natural gas flow to a single power generator. Already teetering on the edge, that seemingly mistake triggered blackouts through parts of Taiwan.
Taiwan has been talking for years about boosting alternatives to nuclear, coal and oil, including expanding wind and solar. While it's hard at work building a natural-gas receiving station in the north so it can feed generators, completion is a few years away. But the new capacity planned isn't enough to bring Taiwan out of this tightness.
'The reserve margin is likely to stay low at least until 2025, leaving the power system vulnerable under any disturbance. Potential blackouts may be worse than in August 2017,' Bloomberg Intelligence analyst Joseph Jacobelli wrote in May.
The shift to keep nuclear plants running would be welcomed by Taiwan Power Co, the state-owned operator that's been hamstrung by competing policies of cutting nuclear and reining in dirty thermal plants. Simply not switching off nuclear sites that are approaching the ends of their lives represents some of the lowest-hanging fruit in terms of avoiding global carbon emissions. This is especially the case in places like Taiwan and Japan where renewables costs remain unusually high, making it hard for them to compete with fossil fuels.
That's unlikely to spark a nuclear renaissance. The high cost of atomic power means that its days are still numbered in most countries. The extreme inflexibility of nuclear plants in electricity grids, which are going to become increasingly dominated by variable wind and solar, doesn't help either. But Taiwan's voters have delivered a valuable lesson to governments considering flicking the nuclear switch to "off": Balancing public opinion between green energy and safe energy doesn't necessarily mean "no nukes". - BLOOMBERG OPINION
David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, Financial Times and the Guardian. Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.