Wed, May 03, 2000 - Page 17 News List

Industry at risk from nuke plant halt

By Richard Dobson  /  STAFF REPORTER

The potential cost of halting construction of the fourth nuclear power plant in Kungliao may be extremely high for Taiwanese industry, an official from the Ministry of Economic Affairs (經濟部) said yesterday.

But on the upside, the official said, further liberalization of the power generation market would stem an expected shortfall in supply.

Chen Chao-yih (陳昭義), executive secretary of the ministry's Energy Commission (能源委員會), said yesterday that halting construction of the nuclear plant would result in a power shortfall of 2,700 megawatts between 2004 and 2005. That figure is equal to the total anticipated capacity of the fourth plant.

"The only way to make up the power shortfall is to further open the power generation market to private companies in the northern part of the country," Chen said.

But, Chen warned, steering away from nuclear power could prove costly. "Building and operating power plants fired by natural gas cost around twice as much as those powered by coal or nuclear fission," he said.

Taiwan already suffers a serious power supply problem, and the Legislative Yuan (立法院) is currently mulling widening power restrictions for industrial users during the peak summer season. Added to this is the natural dangers Taiwan poses to industries. Last year's 921 earthquake temporarily stalled chip production and sent the stock market plummeting.

"If we can't provide a stable flow of power to industries, then investors will look elsewhere to put their money, the stock market will falter and the economy will generally weaken," Chen said.

Chen made the remarks yesterday in response to a proposal by Economics Minister-designate Lin Hsin-yi that the construction of the fourth power plant be temporarily halted.

But while the economics ministry bemoaned the costs of the suspension, deputy director of the Taiwan Environmental Protection Union (台灣環保聯盟) Gloria Hsu applauded the move, suggesting that Taiwan undergo some long-term industrial restructuring to solve its energy woes.

"I think we should reconsider whether we need more energy-intensive industries," Hsu said. "Energy-intensive industries use one-third of the total energy. Cement, steel, petrochemical and paper pulp industries generate less than 7 percent of GDP but use up one-third of the total power," she said.

Hsu also said that by ditching the nuclear plant, billions could be saved on construction alone.

"The final cost of the first three nuclear power plants cost 2.6 to 2.8 times the initial estimate," Hsu said. "The planned cost for building the fourth nuclear power plant is NT$170 billion, but based on past experience it will eventually cost NT$500 billion."

But Taiwan Power officials have raised concerns about the high cost of compensating firms contracted to build the plant if the project is halted.

The US' General Electric Company was awarded a US$1.8 billion contract to supply two reactors while Mitsubishi Heavy Industries of Japan won a US$127.8 million contract to build turbine generators.

Chen said the economics ministry was already formulating alternative plans in case the fourth plant doesn't go forward, adding that the plan be ready by the middle of this month.

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