US embassy cable - 05TAIPEI846

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000846 
 
SIPDIS 
 
STATE FOR EAP/RSP/TC, NP/NE FOR ALEX BURKART, EP/ESC/IEC 
PLEASE PASS TO AIT/W 
 
E.O. 12958: DECL: 02/19/2015 
TAGS: ECON, ENRG, KNNP, SENV, PREL, TW 
SUBJECT: TAIWAN: PROSPECTS FOR GE NUCLEAR POWER PLANT 
IMPROVE 
 
REF: A) 2004 TAIPEI 02862 B) 2004 TAIPEI 02475 C) 
 
     2004 TAIPEI 00450 D) 2005 TAIPEI 00892 E) 
     2005 TAIPEI 00555 F) 2005 TAIPEI 00490 G) 
     2002 TAIPEI 03912 H) 2001 TAIPEI 00477 I) 
     2004 TAIPEI 02861 
 
Classified By: AIT Acting Director David Keegan, Reason: 1.4 (B/D) 
 
1. (c)  Summary.  The first Chen Administration came into 
office in 2000 committed to killing the Fourth Nuclear Power 
Plant (FNPP), but failed.   Since then, anti-nuclear forces 
have sought other ways to try to reduce Taiwan's dependence 
on nuclear energy.  Until mid-January 2005, those 
anti-nuclear efforts appeared to be succeeding with policies 
to implement "Taiwan's Nuclear Free Homeland" steaming 
forward.  Chen relied on anti-nuclear activists to secure 
votes for the 2004 Presidential and Legislative Yuan (LY) 
elections.  With the elections behind it and with the recent 
implementation of the Kyoto Protocol, the Chen Administration 
is trying to moderate its strong anti-nuclear stance.  For 
the first time since the Democratic Progressive Party (DPP) 
has been in power, proponents of nuclear energy have begun to 
gain support.  This development could presage the 
supplemental funding and political support needed to finally 
complete the controversial General Electric FNPP.  End 
Summary. 
 
Role of Nuclear Energy in Taiwan 
-------------------------------- 
 
2. (c)  Nuclear power is by far Taiwan's cheapest source of 
energy.  Energy experts in the government say that it is 
critical both to bring the FNPP on line and to avoid the 
early decommissioning of Taiwan's three existing nuclear 
plants.  Without energy generated by all four nuclear plants, 
Taiwan could face critical energy shortages by 2010. 
 
3.  (u)  Nonetheless, opposition to nuclear power in general 
(and the construction of the FNPP in particular) has been a 
key part of the DPP's ideology since the party's inception. 
Throughout Chen,s first Administration and during the run up 
to both the 2004 Presidential and LY elections, President 
Chen pandered to his anti-nuclear support base.  The issue 
came to a head in November 2000 when, in an effort to live up 
to a 2000 Presidential campaign commitment, newly elected 
President Chen Shui-bian halted work at the FNPP.  That move 
led to an abortive KMT effort to recall President Chen, a 
significant delay in the projected completion date, increased 
costs (USD 30 million) for the project, and weakened investor 
confidence in Taiwan overall. 
 
4. Ultimately, in February 2001, the Chen Administration 
agreed to resume construction.  At the same time, however, as 
reported in ref h, both DPP and KMT members in the LY agreed 
that Taiwan would work to become "nuclear free."  To that 
end, during Chen,s first term, the Executive Yuan (EY) 
passed an Environmental Basic law committing Taiwan to become 
a "nuclear free homeland" (ref g) and drafted regulations to 
decommission each of Taiwan,s three operating nuclear power 
plants seven years earlier than originally scheduled (ref d). 
 In addition,  government officials and publications used 
extreme anti-nuclear rhetoric such as the claim that "over 6 
million people in Taiwan are now living in the shadow of 
insecurity, because of the nuclear time bombs in their back 
yards." (The "time bombs" refer to Taiwan nuclear power 
plants.) 
 
Kyoto Protocol Paves Way for More Serious Nuclear Debate 
--------------------------------------------- ----------- 
 
5. (u) In January 2005, Nobel Prize Laureate and Taiwan 
Academia Sinica President Lee Yuan-tseh publicly stated that 
the Chen Administration's "Nuclear Free Homeland" policy 
might need to be postponed until 2050 in order for Taiwan to 
meet emissions requirements under the Kyoto Protocol.  This 
marked the first pro-nuclear public statement by a high-level 
public figure since President Chen took office in 2000. 
Lee's statement reflects growing concerns about Taiwan's 
vulnerability to sanctions under the Kyoto Protocol, which 
went into effect on February 16, 2005. 
 
Post Elections Anti-nuke Lobby Loses Ground 
------------------------------------------- 
 
6. (c) With the need to secure votes for the 2004 
Presidential and Legislative Yuan elections behind it coupled 
with the recent implementation of the Kyoto Protocol, the 
Chen Administration is trying to moderate its strong 
anti-nuclear stance.  Following Lee Yuan-tseh's lead, several 
officials from the EY have begun to openly support completion 
of the FNPP.  Both Premier Frank Hsieh (Hsieh Chang-ting) and 
Economic Minister Ho Mei-yueh have made public statements to 
this effect.  As noted in ref e, Premier Hsieh told AIT that 
he would personally tell the influential anti-nuclear 
activist and former Democratic Progressive Party (DPP) 
Chairman Lin I-hsiung that the EY remains bound by its 
February 2001 agreement with the LY to complete the FNPP 
project (ref h). 
 
7. (c) Furthermore, as reported in ref i, Minister Ho helped 
secure behind-the-scenes interim funding to keep the FNPP 
alive in September 2004.  On February 14, 2005, Minister Ho 
went further and publicly stated her personal support for 
completing the FNPP.  She concurrently noted, however, that 
the final decision would require a broader consensus.  In 
order to reach such a consensus, Ho announced EY plans to 
hold a National Energy Conference in June 2005 to discuss how 
Taiwan might need to adjust its energy mix in order to meet 
its Kyoto protocol obligations.  (Note. AIT contacts in the 
EY,s Energy Commission, which is responsible for organizing 
the conference, told AIT that several high level policy 
makers intend to use the June National Energy Conference both 
to affirm support for the completion of the FNPP and to 
repeal current plans to decommission Taiwan's three operating 
nuclear plants earlier than originally scheduled.  End Note.) 
 
8. (c) Finally, Chung Chia-bing, who was just replaced as DPP 
Deputy Secretary General but remains an influential figure 
inside the DPP's powerful New Tide faction, recently told AIT 
that the DPP made a conscious decision in late December to 
break with anti-nuclear activists.  He said senior officials 
determined that working with the opposition-controlled LY was 
more important than continuing to pander to the party's 
anti-nuclear constituency. 
 
Battle May Be Yet To Come 
-------------------------- 
 
9. (u) While these recent moves suggest indicate that the 
Chen Administration is trying to moderate its anti-nuclear 
stance, a major political battle over the issue is likely in 
the offing.  Anti-nuclear activists both within and outside 
the government are unlikely to concede on this core DPP issue 
without a fight. 
 
10. (c) Major figures that can be expected to continue to 
press the Chen Administration to stay true to its 
anti-nuclear roots: former DPP Chairman and anti-nuclear 
activist Lin I-hsiung and Chairman of the EY Research, 
Development and Evaluation Commission (RDEC) and of the EY 
Nuclear Free Homeland Commission, Yeh Jiunn-rong. 
Lin-I-hsiung is already pressuring newly appointed Premier 
Frank Hsieh to continue implementing Chen,s "Nuclear Free 
Homeland" polices and, toward that end, he has called for a 
referendum on the FNPP. 
 
11.  Note.  Lin-I-hsiung is believed to be fervent in his 
anti-nuclear stance and the Chen Adminstration's anti-nuclear 
policies are in part a result of trying to appease Lin. 
However, AIT POL and EST Officers met with Lin on February 25 
and found him to be rational.  Lin said he did not expect the 
government to reverse its course or hold a referendum on 
FNPP, but simply seeking a coherent explanation for the 
current policy.  Lin complained that, rather than citing 
Taiwan's energy requirements or environmental concerns, 
officials simply blamed U.S. pressure for their decision to 
continue with the construction of FNPP.  AIT clarified that 
AIT's interest in the FNPP is limited to ensuring that Taiwan 
lives up to its contractual obligations with General 
Electric.  After this clarification, Lin stated that he fully 
supports fulfilling Taiwan's contractual obligations to 
General Electric.  End Note. 
 
12. On February 2, 2005, Lin led a protest attended by a few 
dozen activists outside both the LY and EY urging the 
newly-installed Hsieh to realize the Chen Administration's 
commitment (codified in its Basic Environmental Law as 
reported in reftel G) to make Taiwan nuclear free.  Chairman 
of the EY's RDEC and Nuclear Free Homeland Commission, Yeh 
Jiunn-rong, is a former professor linked to environmental 
NGOS.  Energy Commission contacts believe Yeh is responsible 
for adding provisions to the Environmental Basic Law that 
require Taiwan to become nuclear free.  (Comment.  Although 
Yeh has been retained in the new cabinet, his previous 
influence derived from close ties to former Premier Yu 
Shyi-kun.  His influence under Premier Hsieh remains yet to 
be determined.  End Comment.) 
 
Comment 
------- 
 
13.  How the DPP handles these issues could redefine key 
party principles.  The DPP has seized on the Kyoto Protocol 
going into force as a convenient opportunity to try to cloak 
its more practical considerations toward nuclear energy in 
pro-"green" terms.  Whether the Chen Administration efforts 
to moderate its stand on nuclear energy will translate into 
the political will and funding needed to finally complete 
construction of the FNPP remains to be seen.  A firm 
commitment to support nuclear energy could result in 
undermining some of the DPP's traditional grassroots base of 
support.  Taiwan's nuclear energy and Kyoto policies over the 
next few months will reveal whether the second term Chen 
Administration will continue to place politics first or has 
begun to place more emphasis on sound economic policies.  End 
Comment. 
PAAL