September 30, 2000

Taipei, Taiwan

Concerning the issue of the Nuclear Power Plant No. 4 (NPP4), after deep consideration I have as of this morning submitted my "Recommendations following the Conclusion of the Re-evaluation of the NPP4 Plan" to the Executive Yuan, recommending that the construction of NPP4 be halted. My process of decision and rationale are as follows:

I have taken on the position of Minister of Economics, and my background is the industrial sector. Economic development is of course my priority in my administration of government, and I thoroughly know that the government has the responsibility to provide a sufficient and stable supply of electric power to the people and to industry; and it likewise has the duty to assure a safe and non-harmful environment for the consumption of electric power.

Although the budget for the NPP4 plan was passed by a legal process and is now in the period of execution, looking back on its process of legislation, it is an undeniable reality that contention has never stopped and conflict has been unceasing. The proponents and opponents of nuclear energy have long both insisted on their own positions, without dialogue, and the common people do not have adequate knowledge of nuclear power and other power. The government does in reality have the need to provide a more complete explanation to the people. In order to coalesce a consensus among the people of the country and to dispel dissension, I considered that there was a necessity to re-evaluate whether the Nuclear Power Plant No. 4 plan should be continued in execution, and I recommended that the plan be submitted to re-evaluation.

In order to achieve a practical understanding of the matter, in the period of the re-evaluation I myself, accompanied by staff of my own ministry and of Taipower, separately visited and inspected Nuclear Power Plants Nos. 1 and 2, and the site of NPP4 in Kung Liao, Taipei County. I had discussions with the local residents, and I deeply sensed their apprehensions; it made me feel what they felt. If there are feasible alternatives for providing electric power, why don't we earnestly consider them? Is it necessarily the case that providing the people a living environment in which they can feel safe is totally at odds with economic growth and development? I saw with my own eyes how the residents at the site of NPP4 have engaged in a prolonged and vehement struggle against the plant, reacting to every move of the NPP4 plan with virtually a scorched-earth war strategy, to a degree that outsiders perhaps find hard to understand, or would even deride as irrational. But I look into my own heart and ask myself, if NPP4 were in my own backyard, would I be able to deal with it with such happy "rationality"?

If we wish to halt the construction of NPP4, we must as a precondition be certain that there are feasible alternatives. After going through discussions with our Energy Commission in the Ministry of Economics, the National Industry Committee, Taiwan Power Corporation, and China Petroleum Corporation, the following measures have been arrived at as alternatives to continuing construction of NPP4:

1. Actively plan a regional balance in the supply of electricity, and promote the building of privately-operated electricity generation plants in north Taiwan...

2. Reinforce the power grid: Speed the completion of the construction of the Third Power Transmission Line...

3. Expedite the revision of the laws governing the electricity generation industry, and liberalize (privatize) the industry...

If we stop the construction of NPP4, it is estimated that the loss will be NT$75.1-90.3 billion [about US$2.5-3 billion] (this includes the expenditures already paid and those items that by contract must still be paid), which will be written off over five years. Installments for 2000 and 2001 will be written together into the (current) final budget, and those for 2002 through 2004 will be planned ahead into the later budgets. As to whether the reactors (NT$52.2 billion [about US$1.7 billion]) and the turbines (NT$4.0 billion [US$130 million]) can be sold to other parties, one of the following two circumstances will result:

1. If the reactors and the turbines cannot be sold, then the loss will be about NT$82.7 billion (average of the extremes of the estimated range above), which will mean an increase for the next five years of NT$0.12 per kilowatt-hour, i.e. an increase of 5.49%, thus an increase of about NT$39 [about US$1.25] per month for an average family.

2. If the reactors and the turbines can be sold, then the loss will be about NT$47.6 billion (including the estimated loss on resale...), which will mean an increase for the next five years of NT$0.07 per kilowatt-hour, i.e. an increase of 3.16%, thus an increase of about NT$23 [about US$0.70] per month for an average family. After five years, this source of increase will be removed.

Aside from this, due to the future need for Taipower to buy electricity >from private producers to substitute for the power supply that would have been provided by NPP4, since the cost of buying electricity produced from fossil fuel rather than nuclear power will increase the annual cost by NT$9.8 billion [US$320 million], this will be reflected in an increase in the cost of power by about 1.29% in the fifth year hence.

Concerning the loss described above, there is also the opinion of some experts that the loss can be written off over a period of 16 years, which would be a much lower write-off per year, and could possibly be absorbed by internal economies within Taipower, in which case the customers would suffer no additional burden. However, this remains to be further evaluated.

On the other hand, if we were to decide to continue building Nuclear Power Plant No. 4, we would need to make further investment of over NT$120 billion [US$4 billion] (note: the total estimated budget for completion of NPP4 has increased from NT$169.7 to NT$208.2 billion...). If this investment were then unable to be put to economic use because of continued protest by anti-nuke groups, this capital cost would then still have to be borne by all users of electricity. Aside from this, according to the estimate of those in the industry, if the electricity that would have been produced by NPP4 is substituted for by privately-operated power plants, the estimated required investment is only NT$75 billion. This path not only realizes the energy policy of liberalization and privatization, and puts into operation private capital and ingenuity; it provides a feasible alternative.

In the future, our country's economic development must give equal consideration to environmental protection. The Ministry of Economics will emphasize industries that provide "two large, two high, two low" (large market potential, large effect of industrial linkages, high added-value, high technical level, low energy use, low pollution), in order to bring about our industrial evolution in the direction of a "Green Silicon Island".

After our country makes efforts for the development of the information economy, it can be hoped that the industrial structure will move towards the development of technologically-intensive industry. With this, the average requirement for water, electricity, and CO2 emissions for each unit of value produced should decrease. Efforts in this direction can increase the efficiency of use of energy and resources, while accelerating economic development.

After considering the opinions of both the proponents and opponents of NPP4, discussing the future direction of industrial development, and evaluating the need for the supply of electric power and the alternatives and their cost analysis, I have determined that halting the construction of NPP4 and utilizing alternatives will not create a power shortage. Nuclear power generation is not the only choice. Therefore I have decided to recommend to the Executive Yuan that the construction of Nuclear Power Plant No. 4 be halted.

Finally I would like to emphasize that under the heavens there is no perfect solution, none without blemishes. But "limiting conditions" and "difficulties and obstacles" cannot be given the same weight. "Limiting conditions" are objective conditions that cannot be altered, but "difficulties" and "obstacles" are subjective and can be overcome or circumvented. I have no political entanglements or obligations to be beholden to; I just require that my decision stands up to my conscience and does right by the nation and the people. I guarantee that I will devote all my efforts to bringing the alternatives to fruition, and really carry out the provision of a sufficient and stable supply of electric power to industry and to the people of the country. I have confidence that this will bring to Taiwan the expansion of economic prosperity.

Thank you.


by Linda Gail Arrigo, Green Party Taiwan International Affairs Officer