The Preference evaluation of offshore wind power replace of theNuclear power
Ping-Han Chung, Ya-Wen Chiueh*
As stated in the amendment of Power Act in 2017/01/11, the ‘2025 Nuclear-freeHomeland’ goal in which nuclear power equipment must stop running by 2025 was tobe achieved. In order to accomplish the objectives of carbon reduction and ‘nuclearfree homeland’ in compliance with the policy, Taiwan government started
implementing a new energy policy focusing on energy transition and development ofrenewable energy (Atomic Energy Commission, 2018) with a main approach ofoffshore wind power. According to the assessment conducted by International
Engineering Consultants Ltd 4C Offshore, Taiwan’s west coast was one of the world’s
most effective offshore wind energy stations (4C Offshore, 2013). For this reason,‘Offshore Wind Power’ becomes a key project to be actively developed.
In 2018, Bureau of Energy passed the bill ‘Wind Power Initiation’ and launched afour-year project which aimed at a target onshore capacity of 1.2 GW (estimated annual
energy output is 2.9 billion

kWh) and offshore capacity of 5.5 GW (estimated annual

energy output is 19.8 billion kWh). The total generated energy of 6.7 GW (estimatedannual energy output is 22.7 billion kWh) is expected to replace the energy gap of thedecommissioning of nuclear power plants by 2025 (Bureau of Energy, 2018). AlthoughArt. 95.1 of Power Act ‘2025 Nuclear-free Homeland’ became invalid after the passageof 'Go Green with Nuclear' referendum in the 9-in-1 General Election in 2018,
Executive Yuan informed that since life extension of current nuclear power plants was
not feasible after assessment and nuclear waste problem remained unsolved, the generalgoal of ‘Nuclear-free Homeland’ would still be kept and the government wouldcontinue exploring renewable energy solutions which included offshore wind powerand solar energy, etc. (United Daily News, 2019).
However, difficulties are faced while initiating the use of offshore wind power toreplace nuclear power: (1) Since offshore wind farms will not be installed until 2020
but The First Nuclear Plant was decommissioned in 2018 and The Second Nuclear Plant

is scheduled to be decommissioned in 2021, the energy gap during this period can only
be temporarily filled by thermal power generation, which would increase carbon
emissions and PM2.5 in the air and public health would be greatly affected (The LibertyTimes, 2017). (2) Deficits in spinning reserve caused by energy gap were magnified
and examined after the event ‘815 Power Blackout across Taiwan’. People werepanicked by power shortage and started considering whether or not nuclear power
plants should be reactivated (TVBS Poll Center, 2017). (3) After selection and bidding,the average cost of offshore wind energy is estimated to be about $4.82/kWh, which ishigher than current costs. Hence the electricity price is bound to be adjusted and public
acceptability should be taken into account. (4) Since the result of referendum showedthat the majority of voters made an objection to ‘Nuclear-free Homeland’, this mightbring challenges to energy transition (Taiwan Environmental Information Association(TEIA), 2018).
To sum up, although documents about willingness-to-pay for nuclear risk / climatechange surveys (Chen, 2012) or willingness-to-pay for substituting nuclear power withnatural gas (Lin, 2016) are available, currently no related research about willingnessto-pay for substituting nuclear power with offshore wind power can be found.
Choice experiment is a type of ‘stated preference model’ which can be used tocalculate use and non-use value (Liu & Lu, 2017). Attributes of goods are identified
and respondents are asked to make choices under different scenarios or options(Adamowicz, et. al., 1998). In comparison with other descriptive assessment methods,
Choice experiment can not only provide more information but can also estimate average
WTP and hidden price or marginal price of different attributes as well (Hoyos, 2010).
As offshore wind power farms have not yet installed in Taiwan, the benefit
evaluation of substituting nuclear power with offshore wind power can only beconducted by setting a hypothetical market and questionnaire designed on the basis of
Choice Experiment and Contingent valuation method would be adopted. By using thequestionnaire survey, the willingness-to-pay for substituting nuclear power with
offshore wind power can be evaluated and people’s awareness of/attitude to offshorewind power and risk of nuclear power can be explored. The objectives of the survey aresummarized as follows:
1. By using the questionnaire, people in Taiwan are surveyed for their awarenessof/attitude to offshore wind power and risk of nuclear power.
2. With the combination of Choice Experiment and Contingent valuation method
together with designed questionnaire, the willingness-to-pay for substituting nuclear
power with offshore wind power can be evaluated.
This research aims at evaluating Taiwanese people’s willingness-to-pay for
substituting nuclear power with offshore wind power. The empirical study uses theChoice Experiment, which is related to Conjoint Analysis, to design a hypotheticalmodel consisting of three groups of attributes to test the possible effect that offshore
wind power may bring about when any one of the current nuclear power plants issubstituted. In the meantime, Random Utility Model is applied to estimate the tested
sample’s relative valuation degree of nuclear power plant decommissioning, benefit ofterminating nuclear power, and increase of electricity price. Moreover, ContingentValuation Method (CVM) is used to evaluate people’s willingness-to-pay (WTP) for
substituting nuclear power with offshore wind power and to investigate the factors that
influence this willingness-to-pay.
The region chosen by this research for questionnaire survey is Hsinchu area where
Hsinchu Science Industrial Park is located. In recent years, the production value ofHsinchu Science Industrial Park is more than one trillion NTD, the number of approved
firms set in it is more than 520 and employees working in the park are more than
150,000 people (Hsinchu Science Industrial Park Administration, 2019).This is why it
becomes a pivotal area for the country’s economic development. As we know, thedevelopment of high-tech industry rely heavily on energy supply—for example, theindustrial power used in Hsinchu Science Industrial Park from 2012 to 2019 goes to
55,908,737,802 kWh. And Hsinchu City has the highest share of large consumers ofenergy (> 800 kW) according to Taipower’s statistic data. Therefore the issue of powerand energy is strongly connected to the development of Hsinchu area.

On the other hand, since Hsinchu area is far from New Taipei City where The Firstand The Second Nuclear Plants are located and also distant from Pingtung County
where The Third Nuclear Plant is located, it is not within the districts directly andurgently affected by nuclear disasters. On this account, relatively objective data can beobtained in questionnaire survey. Therefore this research take residents in Hsinchu area
as population of survey to evaluate the benefit of offshore wind power compared tonuclear power.
The expected results of this research are stated as follows:1.

By using the questionnaire, surveyed people in Taiwan for their awarenessof/attitude to offshore wind power and risk of nuclear power.

2.

By using the questionnaire, collect empirical data which shows how people’s
awareness of offshore wind power and risk of nuclear power affect their
willingness-to-pay (WTP).

3.

By combining Choice Experiment and Contingent Valuation Method, evaluate
Taiwanese people’s willingness-to-pay (WTP) for substituting nuclear powerwith offshore wind power and investigate whether ‘benefit of terminating
nuclear power’ or ‘nuclear power plant decommissioning’

will influencepeople’s willingness-to-pay or not.
Keywords: offshore wind power, nuclear power, willingness to pay, contingent
valuation method, choice experiment, risk perception