Taiwan Blackout Seen Pressuring Tsai to Review Energy Policy

Updated on
  • Government may need to rethink anti-nuclear stance: BI analyst
  • Policy changes to be dictated by level of public pressure: Hsu

Taiwan President Tsai Ing-wen.

Photographer: Ashley Pon/Getty Images

A blackout in Taiwan Tuesday that struck about 6 million households may force President Tsai Ing-wen to reconsider her anti-nuclear stance and open the country’s electrical grid to outside investment.

The island’s energy security and the feasibility of Tsai’s plan to phase-out atomic reactors by 2025 and reduce coal-fired generation is coming under greater scrutiny, BMI Research said in an Aug. 16 note. So far Tsai hasn’t backed down on promises to shut the country’s remaining nuclear power stations, but public pressure could determine the extent to which policies change, according to Gloria Hsu, a professor at National Taiwan University.

While the disruption Tuesday was caused by human error that resulted in about 9 percent of Taiwan’s generation capacity going offline, the outage highlighted the country’s limited number of power plants. The reliability of that supply, generated and distributed by state-run companies, is crucial to the success of Taiwan’s semiconductor industry that had sales of about $71 billion in 2015 and supplies companies including Apple Inc.

“The government may be forced to reconsider its anti-nuclear stance,” said Joseph Jacobelli, an analyst at Bloomberg Intelligence. “Market liberalization could be seriously advanced as Taiwan desperately needs private investment in its power infrastructure.”

Taiwan plans to separate Taiwan Power Co., known as Taipower, into separate entities to handle power generation and transmission and distribution, according to electricity act amendments passed in January. But that effort is far too little and the government should should focus on more “rational and less populist” energy policies, said Jacobelli.

State-run oil and gas company CPC Corp. said it takes responsibility for the accidental shutdown Tuesday of the Tatan power plant, which was caused by a loss of natural gas supplies. Chairman Derek Chen has offered to resign, according to a text message from the company on Friday. Economic Affairs Minister Lee Chih-kung offered his resignation Tuesday.

Tsai posted an apology on Facebook late Tuesday and included a reiteration of her determination to push forward with phasing out nuclear power in favor of renewable energy.

— With assistance by Yu-Huay Sun, Chinmei Sung, and Dan Murtaugh

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