After the Fukushima disaster, antinuclear groups in Taiwan requested that the island's No. 1, 2 and 3 nuclear plants suspend operations pending full -safety inspections and assessments. Staff from the Ministry of Economic Affairs' State-Owned Enterprise Commission stated that if Taiwan were to close all its nuclear plants, the power could not be replaced and one-third to one-fourth of the island's manufacturers would have to shut down.

But antinuclear groups disputed that claim. Hong Shenhan, deputy secretary-general of the Green Citizens' Action Alliance, explains that last year Taiwan's electricity operating reserve margin was 24.3%. If all three nuclear plants ceased operating, the reserve margin would still be at 10%. Supply would be more than adequate, so closing the nuclear plants would pose no crisis.

One side says there would be power shortages, while the other says the electricity supply would be more than enough. It seems there is no common ground. What exactly is the relationship between the reserve margin and power consumption?

Wang To-far, professor emeritus of economics at National Taipei University, explains that the reserve margin refers to the portion of total capacity that exceeds peak summer demand. It's like an indicator of the number of "spare tires" available for the nation's energy vehicle if a power plant were to go down during peak use in the summer. For nearly 20 years Japan has had a reserve margin below 10%.

The reserve margin has great relevance for future energy development planning. Because maintaining a needlessly high reserve margin means building more power plants, it is hugely wasteful. The government ought to discuss whether the current officially announced margin of 16% is reasonable.

Experts note that the definition Taiwan uses for its reserve margin is quite different from those employed abroad. The US, for instance, uses simple installed capacity for the calculation, whereas Taiwan uses installed capacity minus the electricity used to operate the power plant. Consequently, Taiwan's 16% margin is the equivalent of a 21% margin as calculated in the US.

Academics say that currently, at peak power consumption, 24% of Taiwan's generators are producing no power at all. And at off-peak times some 40-50% are not in use. If the No. 4 nuclear power plant comes into commercial use, then the reserve margin will rise even higher. That kind of energy surplus may reduce Taipower's willingness to buy energy generated from renewables.

Aside from concern about an overly high reserve margin, many also suggest the government is overestimating growth in energy consumption. Environmental groups note that Taipower, based on economic growth projections of 4% per year through 2020, is predicting power consumption growth of 4% a year. But there has long been a disconnect between economic growth and energy consumption in advanced industrial nations. With policies promoting clean energy, research in energy technologies, energy conservation, and industrial restructuring, economic growth no longer marches in lockstep with greenhouse gas production.

How far economic growth will affect electricity consumption requires careful evaluation. Former Premier Liu Chao-shiuan has written that, based on annual economic growth of 4.5% in coming years, Taiwan's reserve margin will fall to a risky 7.7% in 2014. A strategy of maintaining a reserve margin of 15% would take account of the demands from various quarters. But he also recommended that the safety of the No. 4 nuclear plant should be examined with the utmost rigor: "We are not under any pressure of time, only pressure of safety requirements." Moreover, plans for the development of alternative energy sources should always be adjusted to include the latest technologies. He hoped that over the next 15 years, the installed capacity of renewable energy sources would grow to more than 10 GW, and industries would transition to greater energy efficiency.

In mid-May Taiwan Power carried out nuclear accident drills. The safety of nuclear power generation is of great importance to Taiwan's future. Determining how to reduce the island's dependence on nuclear power will require courage and foresight.

Currently, Taiwan doesn't lack power, but if it does in the future the government should work hard to raise energy efficiency through measures to dampen demand. For instance, it could implement differential pricing for peak vs. off-peak power, adjust the structure of energy-intensive industries, or impose energy taxes. Only after looking at measures to reduce demand should it look to increase supply.

What exactly is energy efficiency? The main indicator is energy intensity: the less intensively energy is used, the higher efficiency. Different sectors use different indexes. For instance, manufacturing industries look at how much energy they use (50% electricity and 50% fossil fuel) per unit of production. The residential and commercial sectors look at the energy consumed (85% electricity) per square meter of floor space. The transportation sector looks at energy consumed (98% fossil fuel) per kilometer traveled. For the nation as a whole, energy efficiency is measured by the ratio of units of energy consumed to units of GDP.

In truth, the government has been forcefully promoting energy conservation and carbon emission reduction via controls on demand for many years. These efforts have included establishing "carbon reduction service squads," which assist industries in deploying carbon reduction technology and promote carbon-footprint authentication. For the residential and commercial sectors, measures have been implemented to push energy efficiency for electrical appliances, promote green architecture, and so on. What has been achieved?

Hsu Kuang-jung, a professor of atmospheric sciences at National Taiwan University, notes that over the past 10 years national energy intensity has edged down from 9.43 to 8.82 liter of oil equivalent (LOE) per NT$1000. This shows that the efforts on various fronts to conserve energy have reaped results. But because energy intensive industries (including petrochemicals, steel, textiles and paper) have expanded, their growth in energy intensity of 23% from 2000 to 2009 has offset improved efficiency in other sectors.

Legislator Tien Chiu-chin points out that energy-intensive industries account for some 36% of the nation's energy use (and 22% of its electricity consumption), but contribute only 3.86% of GDP, making them economically very inefficient. While pushing to reduce energy consumption and carbon emissions, earlier governments also permitted successive expansions of the No. 6 Naptha Cracker complex, which produces about 26% of the nation's carbon emissions. Efforts on those two fronts were working at cross purposes.

But if you truly want to reshape the nation's industrial structure through demand controls, the most effective way would be to impose energy taxes and pass the Greenhouse Gas Emissions Reduction Act.

Let's look first at energy taxes. Because energy producers (Taipower and China Petroleum) would be subject to the tax, it would certainly affect the price of fuel and electricity and raise costs for energy-intensive industries. That would naturally lead to a push to raise energy efficiency or close energy-inefficient plants. And households and businesses that were less energy intensive would still be pushed to reduce energy use in order to save money.

Taiwan's Green Party spokesperson Pan Han-shen notes that when European nations such as Germany and Denmark implemented energy taxes, they also lowered income tax rates, thus offsetting for consumers the higher energy taxes. And they sought to reduce the impact of energy taxes on lower- and middle-income people. Measures to raise energy efficiency and adjust industrial structure have been implemented in Europe for 10 years. Not only has this not caused economic collapse, it has stimulated growth of green energy and energy conservation industries. It has been quite beneficial economically.

"At the National Energy Conference no one from any party opposed an energy tax, but once it got to the Tax Reform Committee, it got into trouble. So far, the Executive Yuan hasn't sent us any draft bill!" Legislators have been putting pressure on the committee, arguing that the tax would be a burden on people in tough economic times.

Apart from an energy tax, which affects energy prices, implementing the Greenhouse Gas Emissions Reduction Act (GGERA), which puts controls on energy consumption, is also fraught with complications.

Lee Chien-ming, a professor at National Taipei University's Institute of Natural Resources Management, points out that the act will be implemented in three stages: First, there will be compulsory surveys and inspections to document the carbon emissions of individual companies. Next, the government will set energy efficiency standards for the manufacture of various products (e.g., designating how much CO2 can be created when producing a ton of steel billets). Manufacturers that can't meet these standards will have to buy permits or be fined. Finally, there will be emission caps on industrial sectors.

Those caps will have to be implemented in conjunction with carbon trading. It's a carrot and stick approach that should push industries to increase energy efficiency, use more clean energy, and recycle energy. Such measures will be necessary if the nation is to create low-carbon industrial structures.

Unfortunately, the GGERA is currently stuck in the Legislative Yuan. A new consensus needs to emerge before it can become law. The government can adopt either the GGERA or an energy tax-or perhaps choose the European model, wherein major energy users have caps and smaller ones pay a tax. But it needs to hurry up and make a choice.

Solar power represents an inexhaustible source of natural energy. People used to try to shelter themselves from the energy of the sun when constructing buildings. Now the glass curtains of high rises can be turned into sources of power.

In terms of its energy mix, Taiwan differs from Japan, which relies on nuclear energy for 30% of its power. Since the proportion of electricity in Taiwan from nuclear plants is lower, it shouldn't be as hard for Taiwan to close its nuclear power plants. Moreover, the reserve margin is quite high in Taiwan. With proper energy management, it should be easier than a decade ago to achieve a non-nuclear Taiwan.

"Energy management is complicated. Taipower always argues that Taiwan will need a certain number of solar panels or wind turbines to make up for the nuclear plants. But this is an extremist approach that oversimplifies things," says the Green Party's Pan Han-sheng. Most people don't understand how Taipower determines its mix of power sources at any given time, but the government ought to be responsible for providing sufficient information to the public. For instance, when the "base- load" capacity of coal-burning plants is insufficient, and it's necessary to employ natural gas or cogeneration, what are the costs? How much would employing renewable energies add to costs? How much would it cost to control demand by reducing peak loads? All the different cost factors for different potential mixes of energy sources ought to be considered. Only in that way will the people of Taiwan be able to understand the true price of eliminating nuclear power.

"Taipower has oversimplified the problem and demonstrated that they aren't willing to reveal the actual data. Perhaps they're scared that people will realize that the costs of forsaking nuclear power aren't that high," says Pan. An independent think tank has calculated that if Taiwan eliminated nuclear power and made up for it with additional conservation measures and natural gas, the additional annual cost would amount to little more than NT$1000 per household. Yet Pan is calling for Taipower to gain the public trust by releasing the relevant data and entering into a direct dialogue with citizens' groups.

Natural gas is widely regarded as a good transitional source of energy during the shift from high-carbon to low-carbon emissions. In recent years Taiwan has gradually been raising the proportion of natural gas in its energy mix. But natural gas has its own limitations rooted in transport and low-temperature storage. The photo shows the liquified natural gas terminal at Yong'an, Kaohsiung.

To shake off reliance on fossil fuels and reduce carbon emissions, many countries worldwide are working to develop renewable energies. In particular, solar and wind installations have been increasing by an average of 30% a year since 2006. What's more, there have been rapid advances in technology that have allowed wind in many places to approach competitiveness with coal.

In Germany, the share of electricity from renewable sources has climbed from less than 1% 20 years ago to 15% in 2009. After the Chernobyl nuclear accident in the Soviet Union, public antinuclear sentiment pushed the government to pass its Renewable Energy Act. It then took less than two decades for Germany's renewable energies industry to lead the world. Showing great courage and vision, Germany has made tremendous strides toward its goal of reducing carbon emissions by 50%. It aims to get 30% of its electricity from renewable sources by 2020 and 50% by 2050.

In contrast, in Taiwan wind and solar power accounted for only 1% of electricity generated in 2009, and the goal for all renewables in 2025 is a mere 8%. Taiwan has not been nearly ambitious enough.

Many wonder why Taiwan, with wind and sun resources that rank among the world leaders, is being so sluggish in adopting renewable energy. Those opposed to pushing renewables often claim that Taiwan is small and heavily populated, and thus lacks the conditions for large-scale adoption of wind or solar power, which are also expensive and unreliable sources of supply. They can't serve as primary energy sources, the skeptics argue, and would impact the network load.

But data from the Industrial Technology Research Institute (ITRI) presented at the 2009 National Energy Conference stated that Taiwan has a total potential capacity of 4500 wind turbines on land. After eliminating ecologically and militarily sensitive sites and other areas subject to planning restrictions, you could still install 1500 turbines. Calculated at the currently mainstream 2 MW per turbine, that would allow for a total installed capacity of 3000 MW. Meanwhile the German-owned InfraVest Wind Power Group estimates Taiwan's potential on-land wind power capacity at 5000 MW, which could generate some 10-17 GWh of electricity per year, equivalent to 5-9% of Taiwan's current total output. This figure does not include Taiwan's offshore wind power potential, estimated to be twice as large.

The ITRI estimates that installing solar panels on residential rooftops could yield an installed capacity of 3000 MW, or 3.6 GWh per year. That represents 2% of total power production-hardly small potatoes.

The renewable energy modus operandi is small and distributed. It requires a proliferation of various kinds of generation to meet the needs of a modern society.

Consequently, apart from wind and solar, many nations are looking at various other forms of renewable energy. For instance, Australia's efforts at pushing geothermal energy have met with some success. Taiwan has similarly suitable conditions, so why doesn't it actively push in that direction? Other renewable sources (including ocean thermal energy conversion, wave energy, tidal energy and so forth) also have good potential. R&D may well yield advancements in those fields. Even using the methane from the more than 6 million pigs in Taiwan to produce electricity is a possibility. For progress to be made in any of these areas there need to be new government policies and infusions of capital. Only then will Taiwan be able to slowly cast off the shackles of its dependence on fossil fuels and move toward an era of more distributed electricity generation.

Most people believe that renewable energies are expensive, but the truth is that wind power is growing more and more competitive. With global technological competition, solar energy costs are also dropping. In the US, the price trajectories of solar and nuclear energy have revealed an X shape, with solar falling and nuclear rising. They crossed in 2010.

Price is the key component for regulating electricity supply and demand, but Taiwan's policy of maintaining low electricity prices has become an obstacle for raising efficiency and developing renewable energy generators. Should the price of electricity be adjusted? It will require much discussion and communication before a consensus can be reached.

"Price is the key force in changing energy supply and demand," notes National Taipei University professor Chang Ssu-li. When energy prices reflect the market and are no longer subsidized, that will, in addition to reshaping industrial structures, also allow for supply and demand (via the exercise of consumer choice) to determine the relative allocation of those energy sources. Yet government has been dictating the way for many years in Taiwan. For instance, the government has been determining the proportions of coal, natural gas, nuclear and low-carbon energy that are used. Because the market does not make those determinations, government targets may end up too high or too low.

Chang believes that the government ought to let the price set by producers (in this case Taipower) reflect costs, and then use taxation to reflect government policy objectives. Only when the market and government play their respective roles can policies be consistent. For instance, when the price of natural gas is rising, let Taipower reflect that rise with higher prices. The government can then lower the tax on natural gas to protect citizens. When the price of coal is dropping, the tax on coal can be raised, which will attain the objective of reducing carbon emissions. Otherwise, the government will end up on the one hand saying that it wants to reduce carbon emissions, but on the other hand subsidizing the price of energy for industry. It will end up pulling in two opposite directions and do nothing well.

What's more, because the price of electricity cannot now reflect the cost of production, when Taipower loses money, it just shrugs its shoulders. The circumstances make it difficult for the outside world to exercise supervision over Taipower's cost structure or operational efficiency. In the era of a low-carbon economy, electricity suppliers such as Taipower ought to be actively updating technology and transmission networks, such as by investing in micro-grid networks. Only in that way will Taipower, a state-run company, be able to both provide high-quality power and enjoy reasonable profits. Holding off on taking these steps will only damage Taiwan's potential for energy transformation.

At the end of April, demonstrators from citizen groups taking part in the Sunflower No Nuclear Action parade lay on the ground in Taipei's Ketagalan Boulevard, representing those who would die from a nuclear accident. While the agitprop provided an opportunity for the demonstrators to raise their no-nuke flags high, if Taiwan did choose to decommission its nuclear plants, would the island have enough electricity? It's a serious question that offers no easy answers.

Setting aside the question of nuclear power's safety, let us look at what supporters say is the main point in nuclear power's favor: namely, that it doesn't produce any carbon emissions, enabling it both to promote economic development and to battle climate change. It may pose some dangers, they argue, but you've got to pick the lesser of two evils.

"But when you consider its whole life cycle, nuclear power isn't particularly clean," argues legislator Tien Chi-chin. From mining and processing uranium, to building and operating the nuclear plant, to disposing of spent fuel and managing the decommissioned plant, the whole process involves the release of greenhouse gases. The truth is that nuclear power's greenhouse-gas emissions far exceed those of wind and solar.

To determine "energy payback time," you've got to look at the total energy that goes into constructing, operating and decommissioning a power plant, as well as the energy the plant produces. How long does it take the latter to equal the former? According to research carried out in Australia, the energy payback time for a nuclear plant is much greater than for wind or solar power installations, and about the same time as for a coal-fired plant.

But is nuclear power really a relatively inexpensive form of electric power? Wang To-far points out that even if we disregard the potential costs of a nuclear disaster, the cost of nuclear power isn't the NT$ 0.66 per kWh stated by Taipower. (In comparison, the company says that electricity from natural gas costs NT$3.18 per kWh and from coal NT$1.32 per kWh).

Wang once added up the projected costs to build and operate the No. 4 Nuclear Power Plant (scheduled for operation next year) as well as the projected costs for both its operational period and its decommissioning. The figure he came up with was NT$5.085 per kWh. That's higher than for coal and wind, and about the same as for oil. Moreover, he didn't try to find a more realistic estimate for the costs to decommission the plant and process its wastes. Taipower had previously estimated that No. 4 would take NT$75 billion to decommission, but after the Japanese nuclear disaster, Minister of Economic Affairs Shih Yen-shiang stated that decommissioning the first three nuclear power plants would cost at least NT$300 billion. That's quite a bit more than the NT$180 billion they cost to build. Taking that into consideration, the cost of power from No. 4 would be significantly higher than NT$5.085 per kWh.

From the decision by President Ma Ying-jeou to scuttle China Petroleum's plans for a new oil refinery, the government has already shown a determination to no longer rely on traditional industry. In Taiwan we are already at a point where we are turning away from traditional GDP and toward green GDP. Superficially, it may appear that supporting traditional industries creates employment opportunities, but from an environmental perspective propping them up causes much greater losses, so that GDP growth comes at a high cost for the nation. Our hopes for the future are tied to green GDP. Taiwan's high-tech advantages ought to be applied to solve carbon-emission and energy efficiency issues and to develop new energy sources and so create green industries. Apart from being a win for the environment, that would also bring economic blue skies.