Thursday, February 28, 2013

Gov't to Allow Referendum on Nuke Plants

Wow! The KMT government agreed to a referendum on the fourth nuclear plant in Gongliao, probably the dumbest public infrastructure project in Taiwan history. It even made the international news (AP). After noting that the government had agreed to the referendum, the Taipei Times reported:
According to the plan, a referendum on halting construction of the Fourth Nuclear Power Plant will be initiated by the KMT caucus tabling a motion next month in the legislature, KMT caucus whip Lai Shyh-bao (賴士葆) said.

Lai said the plebiscite could be held in August as the Referendum Act (公民投票法) stipulates that a referendum must be held no sooner than one month and no later than six months after its proposal.

If the completion of the plant failed to win approval, there was the risk of huge compensation payouts for breach of contract, higher electricity costs, power shortages and even an adverse effect on economic growth, Jiang said.
Hahaha. The KMT government is already hard into fear mongering, the same tired nonsense. The government claimed twenty years ago that power shortages and economic growth effects would occur if the plant were not built, and it has never varied from that line. Obviously these things never  happened. It was lies at the beginning, and it is still lies. There are plenty of other ways Taiwan can generate power. Not to mention reduce demand through improved conservation...

Frozen Garlic has a long, excellent post on many of the issues. First, I think many of us are as shocked as he is that the KMT would submit a major project to the overall review of the public when it knows that in any fair referendum the Party position in favor of nuclear power will be defeated. In these two paragraphs he strikes to the heart of the matter:
Why is the KMT so politically committed to nuclear power? Most importantly, they have committed enormous piles of money to this project over the past two decades. They cannot simply walk away with nothing to show for it. The DPP would beat over the head relentlessly for years and years. How many schools, hospitals, roads, public housing, MRT lines, or flower festivals were sacrificed for 4NPP? It would be strong evidence that the KMT had a flawed vision for the future and had stubbornly insisted on imposing that flawed vision on an unwilling population. The KMT has been attacking the DPP for a decade over the 2001 showdown. When the DPP stopped construction, they broke numerous contracts and had to pay heavy financial penalties. Of course, the project was then resumed, so that money was just wasted. However, if the plant never opens, this argument gets reversed: the DPP tried to save Taiwan an enormous amount of money, and the KMT wasted 10 more years of construction budgets. For the KMT, reversing course is simply not an option.

There are also other reasons the KMT wants nuclear power. One way to understand the KMT regime is as a construction state, much like the LDP’s Japan. The ruling party hands out lots of construction contracts and turns these contracts into political support. Some aspects are legal, some are hazy, and some are outright illegal. However, it is pretty effective. 4NPP has been a 20 year gravy train of contracts to hand out. (I hope I’m wrong about this. Contracts used for this purpose often lead to shoddy public works. This prospect terrifies me.) Many manufacturers support nuclear power. To be clear, they don’t care where the electricity comes from, but they can’t stomach the prospects of insufficient or unreliable power. Many of the exporters that drive Taiwan’s economy want 4NPP opened because they believe it will provide steady and reliable electricity for the next few decades. The KMT also listens closely to Taipower, the state run electricity company. Taipower is deeply embedded in the KMT’s power structure. The Economics Minister is a former Taipower executive, and the head of the Taipower workers’ union is a member of the KMT’s Central Standing Committee. Taipower wants 4NPP. It can be pushed and prodded to reluctantly try out the odd alternative energy project, but 4NPP is Taipower’s crown jewel.
The 4th nuke plant has been a massive source of patronage funding, as Froze points out above. So why would the KMT be willing to court defeat like this?

Well, two reasons. First, as a friend point out to me, the construction budget for the plant is pretty well spent. This means that the project has done its intended job -- the contracts have been handed out to the KMT's patronage networks in the construction-industrial state. There's little left to plunder. This means it can shut down with minimal economic effect on KMT supporters. As the TT noted in another article:
Among the conclusions were that, before the referendum is held in August, the government would not request any more budget for the plant, not load fuel rods in the plant’s first reactor and halt all construction projects other than those that have been contracted out.

The government said the first reactor at the plant is 95 percent complete, while the second reactor is 92 percent complete and that most of the uncompleted projects have been contracted out.
Putting it up for referendum after its contract potential has been exhausted certainly tastes like n admission that the construction of the plant was never about obtaining its power output....

The other thing, is well, pretty damn simple: this project has to die, and everyone knows it. It is not safe in any meaningful sense of the word. Not only are there potent natural threats in the form of quakes and tsunamis, but over the last couple of years there has been a study stream of articles on all sorts of man-made problems with the plant. Nor can the budget handle it, nor is there a place to put the waste. Completing it and running it as a nuclear power plant would be transcendentally stupid.

As Froze points out, the KMT can't simply halt the plant, they are too invested in nuclear power. So their solution is simple: Stop Me Before I Kill Again. Let the public kill it instead, thus showing the Benevolence of the Great KMT which can reap some of the propaganda benefits of looking like it actually supports democracy. And then they can arrange for the DPP and its environmentalist allies to take the blame, just as environmental opposition was made the excuse to kill that dog of a naptha cracker in Changhua last year (pics + info).

One of the exciting possibilities here for so many of us looking at the possible excising of this hideous tumor of the construction-industrial state is that the KMT's willingness to kill this project means there might be a possibility of meaningful changes in Taiwan's referendum laws. The last important local referendums were on gambling on the Offshore Islands. To get those passed, the KMT rammed through changes in the 2003 Referendum Law:
TN goes on to observe that the KMT built an impossibly high barrier to the passage of the referendum with the infamous "double majority" law that requires that the vote consist of a majority with at least 50% of voters having voted. What they did was cheat: in January the KMT rammed through a clause in the offshore gambling statute deleting the requirement that 50% of voters must vote in the referendum for it be valid. An article on it in Gambling Compliance describes...
The reason the law requires a Double Majority is simple: the KMT can defeat any referendum simply by instructing its voters to boycott the Referendum vote. Since the KMT was eager to get gambling in the offshore islands, it relaxed that law for the sake of the referendums in Penghu and Matsu. It isn't likely that the KMT Administration will push for relaxing the Double Majority requirement, but it is nice to be able to contemplate that possibility. The DPP has promised to try and push for relaxing the Double Majority requirement (here).

In this case a number of options remain to the KMT:
  • If they relax the 2003 Double Majority law for the sake of the nuke plant referendum, it can go down to almost certain defeat, despite the blizzard of propaganda likely to come from the usual culprits. 
  • If they don't, it will still likely be defeated since nuclear power is unpopular, so long as the KMT does not instruct its people to boycott the referendum. 
  • They can also defeat it by instructing their people to boycott it. 
Remember too that the government can arrange that its position be supported by presenting referendum text that is total gobbledygook so no one knows how to vote, a favorite strategy of anti-democracy moves. Thus, there are many ways the plant can still be finished if the government wants.

Once a referendum is defeated, eight years must pass before it can be brought up again.

I think the most likely outcome is (1) assuming the laws are relaxed. It would be interesting to see whether a majority would turn out in the case of (2), which is highly unlikely and whether, if not, the KMT government would commit to be bound by the outcome even if a majority did not turn out. Since the referendum will likely come this summer, the next few months should be fun to watch.

PS: There's a whole political angle a friend will be writing on soon, not discussed here. Look for it!
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Marc said...

Fascinating analysis. Never ceased to be amazed...

Mike Fagan said...

On the power cuts claim...

I did some rough math using the 2011 and 2010 data and my guess is that if electricity consumption continues to grow at 2% per year (5 TW hours), and if the circa 20% reserve margin capacity is to be maintained (between 7000 and 8000 MW), then Taipower needs to add 1,908 MW of capacity every year (assuming 30% efficiency) to avoid eating into the reeserve. If they fail to do this, then the reserve is good for about 4 years max under a 2% per annum growth curve (but in practice it will be less than 4 years because of maintenance requirements).