Chapter 4: Results
4.10 Resolving political deadlock:
some generating capacity is required to provide transmission to anyone who wants it at a reasonable fee, and they then resell it to municipalities or rural electric corporations, who are responsible for distribution. Thus, policy, generation, transmission, and distribution are all managed separately by politically independent actors, some of whom are regulated private companies, or even entirely private. This has the advantage of ensuring that so many actors are more difficult to be targeted for pure political opportunism. Though the American model has many disadvantages, as Banks notes on numerous occasions in his critiques about the dangers of privatization (Banks, 2007), it has the unintended side effect of making the power industry as a whole more politically robust.
However, partial or complete liberalism are not the only solution to this problem. The Tennessee Valley Authority in the US is entirely publicly owned, and most of its generating capacity is also public. While it is publically owned and the subject of periodic political
upheaval, it is shielded from direct operational interference from the political sphere, with the ability to control prices.
Taipower is a serious victim of the horns effect. The Horns Effect, referencing the appearance of a western demon, is a well-documented cognitive bias that causes one’s judgement to seriously impaired by a first impression. All subsequent judgements of a subject, being colored by an initial first impression that creates a snowball effect. Thus, it becomes easier and easier to scapegoat a single subject.
4.10 Resolving political deadlock:
Due to the massive amount of misinformation and misunderstanding surrounding Taiwan’s power system, it is imperative that Taiwan create a credible, politically independent energy body to advise on energy policy and educate the public. Much of the political
deadlock that does exist is there because of lack of information, which is exacerbated by the tense political climate. The KMT’s continued defense of Taipower is harming Taipower’s own interests, as Taipower is being contaminated by the KMT’s perceived political illegitimacy.
There is nothing inherently wrong with a state owned monopoly on power generation,
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transmission, and distribution - although liberalization could potentially provide a means of depoliticization, it is not the only means.For the time being, there is a feedback effect going on in Taiwan’s social institutions.
The energy intensity of the Taiwanese economy means that energy, and electricity in particular, drive Taiwan’s economy as long as it remains dependent on exports. The
economy is part of what drives political action. President Tsai In-wen’s inauguration speech was most about economic issues, and even as she hopes to bolster Taiwan’s economy, her party continues to pursue a potentially unstable destabilizing energy agenda. Because neither the legislature, and more importantly, their constituents, have access to good information about electrical policy from trusted, independent authorities, their meddling makes the problem worse.
When Taipower protests, they are rebuked. (Liu, Lier, 2016) The DPP appointed representative to Japan has claimed that Taipower uses numbers to perpetuate lies at public expense, and this sentiment is echoed in Taiwan’s civil society. Yet this thesis’s analysis clearly shows that Taipower’s and the MOEA long term projections may actually be too optimistic.
To resolve this feedback loop, Taiwan must improve the quality of information, and that requires a degree of political autonomy that is not currently possible. Liberalizing and privatizing Taipower will not solve this underlying problem, and this is the only way to start to solve the problems.
Taipower, and its defenders the KMT, have repeatedly failed to educate the public on their policies or on power system management. This author’s own experience with
Taipower’s nuclear facilities showed a staff that was so desperate to cover its political futures that it failed to provide useful information. In most American children’s textbooks, nuclear reactors are diagrammed beginning in the third grade, when children are eight years old. Activists informally interviewed in Taiwan’s anti-nuclear movement don’t even
understand the difference between LNG and Coal plants, believing that thermal power plants (火力 in Chinese) are powered by some form of fire that is not tied to fossil fuels, let alone
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58 high carbon sources. Given this level of ignorance, it is no surprise the population is so vehemently opposed to nuclear power.
The World Nuclear Association provides overwhelming evidence that nuclear power is the safest source of power per kwh among all conventional sources, and that the primary dangers lie not in the technology, but in the institutions and practices that manage it. (“Safety of Nuclear Reactors - World Nuclear Association,” May 2016). And yet even though a gas explosion killed dozens and injured hundreds, Taiwan continues to pin its energy future on a fossil fuel based power source. This problem is fundamentally a political one, which would be solved by effective and trustworthy information, which neither Taipower nor the KMT have been willing or able to provide. Until an autonomous energy agency is formed, the excessive politicization of energy will continue to stunt development of an effective electricity policy in Taiwan.
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Given available historical data on Taiwan’s generating reliability, what
operating reserve would be required to maintain reliability for a feasible, worst-case scenario?
We have established that, during 2015, the less than 12% reserve ratio was barely enough. During July, the loss of a single plant or two large generators would have caused power rationing. This must be treated with several caveats.
The first caveat is the nuclear issue. With some of Taiwan’s nuclear fleet out of commission during that year, largely due to political issues, the reserve ratio could be considered artificially inflated. These offline facilities still contribute to Taiwan’s “Installed Generating Capacity” figures, but since they don’t generate, they are essentially dead weight.
Even so, Nuclear Power Plant 1 Unit 1, with a capacity of 636 MW, was the only facility out all year, with the second reactor going down during December only. Those two facilities combined contribute less than 2% to the operating reserve.
The second caveat is that the concept of operating reserve is tied to only two
variables - peak demand and installed capacity. That means that low capacity factor sources like solar and wind could dramatically skew the operating reserve calculation as a measure of reliability. The current legal mandate of 15% operating reserve is only useful in so far as the energy mix is mostly high capacity factor sources.
The third is that, even with high capacity factor sources, this may not adequately account for economic growth. We have established that Taiwan’s GDP growth and growth in electricity consumption are linked, and are likely to remain so for the foreseeable future. With 12% operating reserve, or effectively 11% due to political constraints on the first nuclear