Reserve margin under 10% if plant halted: mag

Citing data by the state-owned electricity utility, CommonWealth Magazine said on its website that the discontinuation of the nuclear power plant, coupled with the decommissioning of two generators in the Linkou Coal Power Plant in 2014, will push the reserve electricity margin below the 10-percent rate, which is seen by most regulators worldwide as a minimum requirement.

In the worst case scenario — when the No. 1 and No. 2 nuclear power plants and the first generator of the No. 3 plant are decommissioned in 2024 without the support of No. 4 Nuclear Power Plant — the reserve margin will drop to 1.01 percent.

The electricity reserve margin measures the amount of unused electricity available when a power company's system is at peak usage. Low reserve margins (regulators generally require reserve margin of 10-20 percent) limit the ability to handle sudden spikes in power usage.

With a reserve margin as low as 1.01 percent, Taipower will have to ration electricity if any one of its generators fails, the magazine said.

According to an evaluation by the Ministry of Economic Affairs' Bureau of Energy, electricity costs will increase by 40 percent if Taiwan replaces all its nuclear power plants with natural gas plants by 2025. The spike in cost, if fully reflected in prices, will translate to a NT$4,800 bimonthly hike in prices for a middle class household that currently pays about NT$12,000 in a year (or NT$2,000 bimonthly).

The loss of the No. 4 Nuclear Power Plant will also be a huge financial blow to Taipower, which will have to write off its NT$270 billion investments in the plant as bad debt if the government decided to halt the project. Given that Taipower's capitalization minus accumulated losses amounts to only NT$191.7 billion (until the end of January), the company could be bankrupted immediately by the bad debt if the government does not intervene, the magazine pointed out.

On the other hand, the magazine cited evaluations by environmental groups that put the cost to handle the health, soil and water source damage by a nuclear plant meltdown in the scale of Fukushima at NT$2 trillion, which is higher than the central government's annual budget in 2013.

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