Taiwan Ruling Party Concedes on Halting Nuclear Power Plant

Taiwan’s ruling Kuomintang party agreed with the opposition on suspending construction for a nuclear power plant that attracted tens of thousands in a demonstration last weekend.

Premier Jiang Yi-huah said the government won’t be seeking additional funding to complete the project, located 40 kilometers (25 miles) east of Taipei, as a gesture of goodwill to the opposition Democratic Progressive Party, during a press briefing carried on cable television networks.

Pressure was mounting on President Ma Ying-jeou’s administration to halt the NT$283.8 billion ($9.4 billion) project, after about 28,500 people rallied against it in front of the president’s office yesterday, according to police. Opposition DPP Chairman Su Tseng-chang last week called for a suspension of the project in a televised meeting with Ma. A former chairman of Su’s party has been on a hunger strike since April 22.

“We’re putting the No. 4 nuclear power plant on hold in the spirit of leaving the next generation an option,” President Ma said on a post on his Facebook page yesterday, after a meeting with cabinet members including the premier, ministers of economy and atomic energy, as well as Taipei and Taichung city mayors. “When we need it in the future, it can offer an additional choice.”

Credit Review

Safety inspections on the plant’s first unit will be exempt from the halt, Jiang said, though the start of operations will need to follow a referendum vote. The plant is being built by Taiwan Power Co., a state-run utility.

Standard & Poor’s is reviewing the company’s credit rating in light of the controversy, analyst Daniel Hsiao, said by phone today. The firm currently has a twAAA rating on the utility. Taipower, as the company is known, invited bids last week for NT$12 billion of bonds to be issued by late May.

Planning for Taiwan’s Longmen Nuclear Power Plant, the island’s fourth, began in 1980. Its two units have a planned electricity-generation capacity of 2,700 megawatts, which would account for about 6 percent of Taiwan’s installed capacity once completed. Atomic reactors made up 13 percent of the island’s electricity capacity in March, compared with 27 percent from coal-fired generators and 37 percent from gas-fueled units, according to Taipower’s website.

Tectonically Active

Taiwan needs a continued adequate energy supply at reasonable cost to avoid sinking into a period of economic decline, the America Chamber of Commerce in Taipei said last year in its annual position paper.

Taipower missed a deadline to start commercial operations at the Longmen plant by the end of 2012 after at least five delays since the 1980s. Construction for the project’s unit one is completed, and unit two is more than 90 percent finished, Taiwan’s economy ministry said on its website this month.

Like Japan, Taiwan lies on the Pacific Ring of Fire, an area bordering the Pacific Ocean that is tectonically active. In 2011, water from a tsunami flooded into the Fukushima Dai-Ichi station after a magnitude-9 earthquake off Japan’s northeast coast and disrupted cooling mechanisms, causing radioactive material to be released.

Before it's here, it's on the Bloomberg Terminal.