P 240408Z APR 09
FM AIT TAIPEI
TO SECSTATE WASHDC PRIORITY 1436
INFO CHINA POSTS COLLECTIVE
ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
HQ EPA OIA WASHINGTON DC
DEPT OF ENERGY WASHINGTON DC
DEPT OF COMMERCE WASHDC

UNCLAS AIT TAIPEI 000487 
 
 
SENSITIVE 
 
STATE FOR OES/EGC, OES/ENV, OES/PCI, EPA FOR KASMAN, DOE 
FOR INTERNATIONAL, COMMERCE FOR 4431/ITA/MAC/AP/OPB/TAIWAN 
 
E.O. 12958: N/A 
TAGS: ENRG SENV PREL KNNP ECON TW
SUBJECT: NATIONAL ENERGY CONFERENCE LEANS TOWARD NUCLEAR 
ENERGY 
 
REF: A. 07 TAIPEI 01757 
     ¶B. 08 TAIPEI 00533 
     ¶C. 08 TAIPEI 00853 
     ¶D. 09 TAIPEI 0095 
 
  ¶1. (SBU) SUMMARY. Taiwan's April 15-16 third National 
Energy Conference ended with an informal consensus on what 
direction energy policy will take in the next decade. 
President Ma Ying-jeou and Premier Liu Chao-shiuan both 
pledged to guide the island toward becoming a "low carbon 
homeland" by emphasizing renewable energy, energy efficiency, 
and nuclear power.  Nobel laureate Lee Yuan-tse also endorsed 
nuclear power as an interim solution until viable sources of 
renewable energy are found.  Environmentalists and NGOs at 
the Conference mostly opposed further nuclear energy 
development on grounds that Taiwan does not have ideal 
conditions for such development.  The final Conference 
document included recommendations for deregulation of energy 
prices, promotion of renewable energy and green industry, 
transparency in oversight mechanisms, and passage of the 
Renewable Energy Development Act, Energy Tax, and Greenhouse 
Gas Reduction acts.  Although there was no specific 
endorsement of nuclear energy, an informal consensus 
prevailed that nuclear energy is the only viable interim 
solution for achieving Taiwan,s energy policy goals. END 
SUMMARY. 
 
 
NUCLEAR AS INTERIM SOLUTION 
--------------------------- 
 
¶2.  (SBU) Substantial representation from the Atomic Energy 
Council (AEC) and Academia Sinica expert 
Dr. Lee Yuan-tse,s strong endorsement of nuclear power set 
the tone for the opening of Taiwan,s first National Energy 
Conference since 2005.  Lee said that from the standpoint of 
reducing C02 emissions, nuclear energy offers the best hope, 
but cautioned about the challenges of nuclear waste treatment 
in a small place such as Taiwan.  In fact, Taiwan plans to 
re-license the existing three operating nuclear plants for an 
additional 40 years of operation.  Minister of Economic 
Affairs Yiin Chi-ming said that due to safety concerns, the 
4th nuclear power plant will not be able to start operation 
until 2012.  During his remarks, President Ma pledged to pass 
the Renewable Energy Development Act during the current 
session of the Legislative Yuan, where the Act has been 
pending for six years.  He also said that promotion of energy 
conservation and clean energy are the two main goals for the 
future.  On reducing carbon emissions, the President 
reaffirmed the existing goal of reducing emissions to 2008 
levels by 
2020, and to half of 2000 levels by 2050. Ma also said all 
major public infrastructure projects will incorporate an 
environmental impact component.  He pledged to plant 60,000 
hectares of trees, with forest parks planned for Chiayi, 
Pingtung and Hualien in southern and eastern Taiwan. 
 
DEREGULATE ENERGY PRICES, IMPOSE ENERGY TAX 
------------------------------------------- 
 
¶3.  (SBU) The Conference reached consensus on the need for 
energy prices to reflect global market costs.  As some 
analysts observed, deregulation will lead to higher energy 
costs. There was widespread speculation about how much the 
authorities will allow energy costs to rise in the face of 
the global economic crisis, including worsening unemployment 
and economic growth in Taiwan.  The authorities, are 
deregulating energy prices to spur conservation and encourage 
industry focus on carbon reduction strategies and alternative 
energy development.  Industry, however, has been slow to 
accept carbon-reduction strategies such as clean coal 
technology due to concerns about high costs, complicated 
maintenance, and unproven effectiveness.  There was consensus 
for privatizing Taiwan,s oil, electricity and gas companies 
to promote fair pricing and increase efficiency.  The 
strongest advocacy for energy efficiency came from Michael 
Nobel, a descendant of the family that established the Nobel 
Prize. 
Nobel also advocated using tax incentives to save energy and 
promote the development of solar and hydrogen technology. 
The Ministry of Finance is working on a draft energy tax 
bill, which is slated to be submitted to the Executive Yuan 
for review in October before it is sent to the Legislative 
Yuan for 
approval. 
 
 
ONLY DPP LEGISLATOR ACTIVE IN DISCUSSIONS 
----------------------------------------- 
 
¶4.  (SBU)  While there was consensus on the need to develop 
alternative energy, participation from LY members was notably 
lacking for such an important conference.  Only a few LY 
members were present at all sessions, notably DPP legislator 
Tien Chiu-chin, who fought any attempt at citing nuclear 
energy as a clean technology, as well as designation of 
nuclear energy as an interim energy before renewable energy 
is fully developed.  Tien questioned the safety of nuclear 
plants given that Taiwan is prone to periodic 
earthquakes and has very limited land available on which to 
build nuclear plants and deposit nuclear wastes. KMT 
legislator Ting Shou-chung, however, emphasized that Taiwan 
only has a 7.7-day liquid natural gas reserve, and needs a 
steady source of energy.  The conference chair and panelists 
finally gave in to the demands of anti-nuclear advocates, and 
agreed to postpone a final decision on the future of nuclear 
power in Taiwan.  At the end of the conference, Premier Liu 
reiterated his commitment to nuclear energy by pledging to 
inform the public about nuclear waste treatment, and to 
foster public involvement in 
nuclear oversight institutions. 
 
SOLAR INVESTOR CRIES FOUL 
------------------------- 
 
¶5.  (SBU) Two days before the Conference started, 
German-owned solar energy company Infravest CEO Karl-Eugen 
Feifel held a news conference at which he blasted Taiwan's 
lack of commitment to 
passing the Renewable Energy Development Act.  Feifel 
threatened to pull his company out of Taiwan if prompt action 
was not taken. Infravest has a 41% stake in Taiwan's solar 
market, and has installed windmills all along the west coast 
of Taiwan.  Feifel said the state-owned Taipower utility pays 
only 
NT$ 2.00 (about USD 0.06) per kilowatt-hour of 
windmill-generated electricity, compared with NT$ 2.7 (about 
USD 0.08) per kw/hr for coal-fired plants and NT$ 4.00 (about 
USD 0.12) for natural gas plants.  Taiwan energy experts tell 
us that in reality, Infravest obtained choice locations for 
its windmills, and due to the high efficiency of its 
windmills, the NT 2.00 per kilowatt-hour paid by Taipower is 
quite reasonable.  In fact, they asserted that Infravest's 
problems stem more from its inability to get German bank 
loans during the current credit crunch, rather than from the 
alleged low rates Taipower is 
paying for Infravest's wind-mill generated electricity. 
 
LOW CARBON HOMELAND VS. NON-NUCLEAR HOMELAND? 
-------------------------------------------- 
 
¶6. (SBU) The Conference leadership, headed by MOEA Minister 
Yiin, originally tabled a proposal for 
reconsidering Taiwan,s "non-nuclear homeland" policy and 
"using nuclear energy for the interim." These plans were 
dropped after heated discussion and objections from 
anti-nuclear groups. Compromise language for a "low carbon 
homeland" was adopted instead.  Premier Liu said this new 
goal will mark the beginning of a low-carbon power grid, 
including more sophisticated energy-use measuring devices, 
and will encourage the development of green industry. 
However, given the persistence of anti-nuclear interests, 
dropping the "non-nuclear homeland" policy, which became part 
of the Environmental Basic Law in 2002, will likely face a 
heated battle in the LY.  Policymakers may therefore skirt 
the issue altogether.  Privately, AEC experts told us that 
the ultimate fate of the non-nuclear homeland law is unlikely 
to affect the future course of nuclear energy development in 
Taiwan, since the existing three nuclear power plants are 
slated to extend operation and the fourth nuclear power plant 
is on track to start operating in 2012. 
 
FULL BACKING FOR GREEN ENERGY 
----------------------------- 
 
¶7.  (SBU)  Just one week after the conclusion of the energy 
conference, the Executive Yuan approved an ambitious project 
to pump NT$ 25 billion (USD 757 million) over the next 5 
years to develop renewable energy and to subsidize the cost 
of installing energy-saving devices, as proposed by the MOEA. 
 It will also fund the research and development of green 
 
 
energy technologies to the tune of NT$20 billion (USD 606 
million) in hopes of attracting up to NT 200 billion (USD 6 
billion) in private investment in the industry.  It is hoped 
that private investment will help create 110,000 jobs in the 
renewable energy sector by 2015.  Long term goals are for 
Taiwan to become the world's largest supplier of LED modules, 
a top manufacturer of solar cells and a major producer of 
electric vehicles in Asia. 
 
 
TAIWAN IS AN ISLAND AFTER ALL 
----------------------------- 
 
¶8.  (SBU)  COMMENT. The National Energy Conference succeeded 
in reaffirming the authorities, commitment to enact the 
Renewable Energy Development Act, to seriously fund renewable 
energy, to push for renewable energy, and to deregulate the 
energy sector.  However, the authorities, have neglected to 
provide a timetable for passage of other pending energy 
legislation, including the Greenhouse Gas Reduction Act, the 
Energy Management Law, and the Sustainable Energy Basic Law. 
The strong anti-nuclear stance taken by many NGOs cannot 
change the fact of Taiwan's heavy reliance on imported energy 
(99.3 percent) and the long lead-time needed to bring 
renewable energy sources on-line.  As a commentator noted at 
the conference, Taiwan cannot latch on to another country's 
power grid in an emergency since it is an island with a 
self-contained power grid.  Given the island,s reliance on 
imported energy, Taiwan energy planners do not have the 
luxury of dreaming about renewable energy as a short-term 
solution for Taiwan,s energy needs.  As the only energy 
source that offers both low carbon emissions and a steady 
supply of power for Taiwan in the coming decade, nuclear 
energy looks increasingly attractive to many Taiwan 
policymakers and energy experts. 
END COMMENT. 
 
YOUNG