A highly charged issue
Today the real costs of electricity are far above what we can calculate. For example, Taipower has always claimed that the costs of nuclear power are low. But as yet there is no way to finally dispose of nuclear waste, and it will impose enormous costs on the next generation. The maximum for compensation in the event of an accident at a nuclear power plant has been set at NT$1.4 billion, and the law says that anything over that amount will be paid by the government, thus artificially lowering the calculated costs of nuclear power immensely.
Moreover, plant decommissioning costs, safe storage of nuclear fuels, and the costs from delays due to opposition from local citizens' groups should all be calculated into the price of electricity from nuclear plants. "Taipower has always said that nuclear power is cheap. That's strange, because to me it has always been very expensive," says Liang Chi-yuan, who is also a member of the MOEA's Energy Commission. Only when the costs of air pollution from power plants and other social costs are integrated into the price of energy can there be any improvement in the current price imbalance. And only then will there be an improvement in the efficiency of energy use.
In May, the Legislative Yuan approved the collection of air pollution prevention fees, indicating that the idea of external costs is finally becoming widely accepted. Taipower's coal and heavy oil burning power plants alone will have to cough up NT$3 billion in air pollution prevention costs per year. Inevitably, these costs will then be reflected in the price of energy.
Even more importantly, energy pricing should be decoupled from other policy objectives. "Energy pricing policy should only try to achieve goals related to energy, such as reducing energy consumption or improving efficiency of energy use," argues Wang To-far, chairman of the Institute of Economics at National Chunghsing University.
You can't just raise your hand
But to really reduce waste and raise efficiency, even more important is to make deep savings in energy use.
Almost all government officials or scholars who have anything to do with electric power say the same thing: "We have a huge amount of room for energy savings."
But most of those actually working to reduce energy consumption say pessimistically that we now live in an open society, and consumption cannot be forcibly repressed. It will be very difficult to try to slow the development of electrical power through reducing consumption.
In fact, it is not necessary for people to return to some primitive existence to save electricity. The reason why previous efforts at saving energy all failed was that they stopped at reliance on slogans like "just lift up your hand and turn off the light," which was simply not enough.
Countries that implement serious energy-saving policies focus on efficiency of use. For example, construction regulations require energy-saving materials for doors and windows. Yet the Energy Commission and the Construction and Planning Administration of the Ministry of the Interior have yet to adopt any methods to oversee energy-saving construction. The construction industry has simply imported the northern European style of buildings with large plate-glass windows; these buildings require huge amounts of air conditioning when temperatures rise and so are simply unsuitable for sub-tropical climates. Yet they have sprouted like mushrooms in Taiwan's urban areas, making electricity consumption for air conditioning more than 30% higher than it otherwise could be.
Whenever energy supplies get tight, the old energy-saving cliches are dragged out again. For example, after blackouts in April and May of this year, the CEPD proposed a study on the possibility of encouraging and subsidizing consumers to use energy-saving light bulbs. The problem is, the Energy Commission and Taipower have already "studied" the problem, but nobody actually is doing anything about it.
Overpowered
Today, the cost of reducing energy consumption is only one-fourth to one-seventh the cost of developing energy sources. This has already become an important incentive for various countries to develop energy-saving technology.
Energy-saving products are one of the biggest business opportunities of the future. Industries in developed countries are competing with each other to produce new products using energy-saving technology.
Meanwhile, Taiwan is still debating over whether or not to offer incentives to factories to use energy-saving equipment. Even as automation and pollution prevention equipment have long been included in industrial incentives, the Ministry of Finance is still considering whether or not to give a 10% tax break for energy-saving equipment.
Hong Ting, the executive secretary of the Energy Commission, who has been pushing for a 15% tax reduction for energy-saving equipment, says that he feels very frustrated. This is because the Energy Commission is only a subordinate unit of the MOEA. Therefore, he says, not mincing words, when there's a clash between industrial and energy policies within the ministry, "which side do you think the MOEA will give priority to? Industry, of course." He notes that tax and other policy tools are not in the hands of the Energy Commission, so that "everybody is always talking about saving energy but in fact energy is not given equal treatment."
Today, energy demand in the United States and Japan is about what it was at the time of the first energy crisis in 1973-1974 because they have successfully brought energy-saving policies into play.
According to statistics provided by Wang To-far, between 1983 and 1989, energy development accounted for 92% of all energy-related R&D expenditures. Only 8% was devoted to energy-saving technology.
Thus energy creation has always been given priority over energy saving. Since energy policy is oriented toward making a greater supply available, naturally there has been little success with efforts to reduce demand.
No need for large reserves
In recent years, with reference to both sudden blackouts and planned rotating brown-outs, Taiwan Power Company has always emphasized that the problem is that there is not enough output and there is too little margin reserve capacity. Thus there is not enough power to compensate in the event of generator problems or shutdowns.
Just as people sometimes fall ill, it is perfectly normal for machines to have mechanical problems and shutdowns. That's why it is necessary to have reserve electric power. But many scholars believe that Taiwan has always had adequate electrical power capacity. The problem lies in management shortcomings at Taipower. For example, poor maintenance and an excessive shutdown rate lower electrical supply, creating a situation in which actual supply cannot meet the demands of users, thus creating the need for occasional rationing.
Economists indicate that upgrading management and efficiency could create a situation like that in Japan, where reserve power has long been under 13% but they have not had power shortages.
This is why recently the government and academics have been actively pushing to open management of power plants to the private sector. Although privately run plants would inevitably have problems of their own, they would have the advantage of private-sector responsiveness, flexibility, and efficiency, which are precisely the things Taiwan's power generating industry lacks today.
A moment of decision
Beginning in the 1980s, Western countries' energy policies changed dramatically to emphasizing management of the demand side and upgrading efficiency.
Today, many countries understand that not only does an excessive emphasis on developing energy sources lead to waste and misuse of resources, the countries are highly vulnerable to sudden energy crises, while the power plants destroy the ozone layer and contribute to the greenhouse effect, so that in the end it becomes necessary to spend even more money to repair the damage.
Some scholars argue that we must first resolve the conceptual problem so that solutions to energy shortages move in the direction of reduced consumption.
The conceptual transformation we need is not just something for advanced nations. Thailand, struggling to develop, has already made a major breakthrough in energy policy. It is working with the International Energy Saving Center of the US to develop energy-saving products, has passed energy-saving control legislation, and has begun a complete reassessment of all energy prices. Economists conclude that such measures will reduce the pressure for development of new energy sources in Thailand's process of economic growth.
The fundamental viewpoint for managing energy should no longer be to encourage consumption. Zheng Chinlong says that the government should require Taipower to produce a plan for reducing demand, create incentives for power companies to undertake energy conservation, and create conditions so that companies get a better return from generating one less unit of electricity than they get from selling one more unit. Energy conservation costs could even in part be reflected in prices charged to consumers.
Even if we cannot moderate the growth of electrical power in the short term, Taipower general engineer Lin Ching-chi suggests that we should at least stipulate a power saturation point plan. The earlier such a plan is made, the less pointless wasteful investment there will be.
Learn from the US?
Although there are those who feel that demand for electricity will level off after reaching a certain point, others point to the example of the United States. But do we have to follow the same path as the US? According to the United Nations, the US accounts for only 5% of the world's population, but it consumes more than one-fourth of the world's energy. Per capita energy consumption in Germany and Sweden is only 60% of what it is in the States, but their standard of living is by no means lower.
In fact, because of an excessive investment in electric power, after American economic growth moderated, it had no choice in recent years but to close down nearly 200 power plants.
Will Taiwan adopt policies as early as possible to improve efficiency in energy use? Or will we simply wait till demand levels off and power output catches up? Today, the hidden message in the shortfall in electricity is that we should seriously rethink our relationship with energy.
[Picture Caption]
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Are we really short of electricity? For thirty years power plants were built one after another. Should we take a look back and see how we've used them?
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Who would buy a lamp in the middle of the night? When everyone else is in dreamland, lighting fixture stores still are blazing.
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"Oppose nuclear power and save Taiwan." Radiation and nuclear waste have created fear at the local level, putting many obstacles in the path of nuclear power plant construction.
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Highenergy-consuming industries like concrete, steel, and paper are major causes of the low efficiency of energy use in Taiwan. (photo by Vincent Chang)
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Without power, urban civilization gets destroyed in an instant. How can we not treat our electricity as a precious resource?
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The countless glass-enclosed skyscrapers in Taiwan's cities are a main reason why demand for electricity to power air conditioning has risen so dramatically in recent years.
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