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Taiwan’s Economics Ministry has taken a step toward loosening the island’s reliance on nuclear power in a move that could be a major blow to Japanese firms in the atomic power industry.

Economics Minister Lin Hsin-i said late last week he has asked the Cabinet to cancel construction of the island’s fourth nuclear plant, which is already one-third complete.

The plant, designed to use two advanced boiling water-type reactors made by Toshiba Corp. and Hitachi Ltd. under license from General Electric Co. of the United States, was originally scheduled to go into operation in 2004 and to generate 2,700 mw of electricity when it became fully operative.

It came at a time when the Japanese nuclear power industry is trying to focus on Asian markets to escape difficulties at home, where electric utilities are finding it increasingly difficult to secure locations for new atomic plants.

Like Japan, Taiwan has depended on imported oil and other energy resources to fuel its economic growth.

Lin’s announcement followed Germany’s decision in June to scrap its nuclear plants, adding momentum to moves elsewhere away from such power.

Taiwanese President Chen Shui-bian’s government, inaugurated in May, froze construction of the island’s fourth nuclear plant, located in Kungliao, a fishing town some 40 km east of Taipei on the island’s northeastern coast.

Chen, who was elected president in March on the ticket of the then opposition Democratic Progressive Party, made clear his opposition to Taiwan’s nuclear power program for the first time in September.

He told reporters at his regular monthly news conference on Sept. 19 that he would make a decision on whether to abandon the fourth plant project “taking into consideration the safety of future generations and nuclear waste disposal.” Chen said not relying on nuclear plants is a “question of conscience and morality.”

For the DPP, which fought against the Nationalist Party’s dictatorial rule, giving up nuclear power is a major pillar of its policy.

Li Yuan-che, chief of the Central Research Institute and an adviser to Chen, points to the political background behind Taiwan’s decision to sign the contract for the plant with GE. The reason Taiwan chose to introduce the reactors from GE under the project, he said, is because the island “relies on the United States for its defense and diplomacy.”

There were also reports that a former influential member of Japan’s ruling Liberal Democratic Party had worked on Taiwan to file orders with the Japanese makers for plant facilities through GE.

When the reassessment commission inaugurated by Chen started public hearings in June, U.S. business circles began putting pressure on the presidential office.

State utility Taiwan Power Co. (Taipower), the main organization in the project, and other proponents of the plant construction, invited Hiroshi Tsuchida, a former chief of Rokkasho, Aomori Prefecture, to a lecture meeting to address the public on the safety of nuclear plants.

Opponents did not remain idle. They invited a member of the city assembly of Kashiwazaki, Niigata Prefecture, where Tokyo Electric Power Co. operates an ABWR-installed nuclear power station.

They also invited a representative of Germany’s Green Party, a member of the country’s ruling coalition, to help them press their campaign against nuclear power.

Japanese corporations, including Tepco and builders of nuclear plants, would suffer a heavy blow should Taiwan make a final decision to cancel the project.

European countries and the U.S. presently do not plan to construct new nuclear power stations because of doubts over their cost-efficiency and safety.

Japan witnessed its worst-ever nuclear accident just a year ago in the village of Tokai, Ibaraki Prefecture. The criticality accident led to the deaths of two plant workers and resulted in the collapse of the “safety myth” surrounding nuclear power.

Toshiba and Hitachi have only overseas markets to turn to as long as no progress is foreseen in the construction of nuclear plants in Japan. Tepco hopes to export its expertise on safety management for nuclear plants.

Asia is the future market for nuclear power-related Japanese enterprises. But the Taiwanese economics minister’s decision to ask the Cabinet to scrap the island’s fourth nuclear plant caused part of that potential market to crumble, according to Tetsuya Iida, chief researcher at Japan Research Institute.

If Taiwan decides to call off the project on the basis of environmental concerns, that could also cause a ripple effect on Japanese public opinion. Japanese corporations may thus face a double blow.

For the present, the Ministry of International Trade and Industry appears unruffled, declaring that Japan’s energy policy is made on the basis of domestic circumstances and that the overseas situation is irrelevant.

However, MITI officials said they will have to closely study the report by the Taiwanese Economics Ministry.

Safety pact decision

AOMORI (Kyodo) The governor of Aomori said earlier this week that he will soon decide on whether to conclude a safety agreement on the handling of spent nuclear fuel to be delivered to a reprocessing plant in the prefectural village of Rokkasho.

Gov. Morio Kimura told a prefectural assembly session Tuesday that he will decide on the issue in the near future, indicating such an agreement is more than likely.

The Japan Nuclear Fuel Ltd. facility in Rokkasho is the only site in Japan that has been receiving spent fuel from nuclear plants, which it has been keeping in storage.

The facility, whose construction began in April 1993, is to begin operating as a reprocessing plant in July 2005.

The agreement is expected to be concluded between the prefecture, Rokkasho and Japan Nuclear Fuel. The prefectural and village governments submitted a draft of the accord to the nuclear fuel firm in April.

Kimura has been considering the opinions of municipal heads and prefectural assembly members, as well as confirming the central government’s new nuclear policies in the wake of the criticality accident at a uranium processing facility in the village of Tokai, Ibaraki Prefecture, in September 1999.

The nuclear recycling plant in Rokkasho, which will be Japan’s first large-scale commercial reprocessing plant, is expected to be able to reprocess 800 tons of spent nuclear fuel every year and to recover 4.8 tons of fissile plutonium.

The total construction cost is expected to be 2.14 trillion yen.

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