It’s not just about creating more capacity. Taiwan’s energy dilemma is a combination of national security, climate and political challenges. The island depends on imported fossil fuels for about 90 percent of its energy and lives under the growing threat of blockade, quarantine or invasion from China. Furthermore, for political reasons, the government has committed to shutting down its nuclear sector by 2025.
Taiwan regularly attends UN climate meetings, although never as a participant. Barred from United Nations membership at China’s insistence, Taiwan asserts its presence on the margins, calling for side events and adopting the Paris Agreement’s goals of peaking emissions by 2030 and achieving net zero emissions by 2050. Its major companies, including TSMC, have adhered to RE100a corporate renewable energy initiative, and committed to achieving net zero production. But right now there is a big gap between aspirations and performance.
Angelica Oung, a journalist and founder of the Clean Energy Transition Alliance, a nonprofit that advocates for a rapid energy transition, has studied Taiwan’s energy sector for years. When we met at a restaurant in Taipei, she cheerfully ordered an incredibly large number of dishes that piled up on the small table as we talked. Oung described two major outages: one in 2021 that affected TSMC and 6.2 million homes for five hours, and another in 2022 that affected 5.5 million homes. It’s a sign, he says, of an energy system that is running dangerously close to the limit.
Nicholas Chen argues that the government is failing to meet existing demand. “In the last eight years there have been four major blackouts,” he said, and “blackouts are common.”
The operating margin on the network (the buffer between supply and demand) should be 25 percent in a secure system. In Taiwan, Oung explained, there have been several occasions this year when the margin was reduced to 5 percent. “This shows that the system is fragile,” he said.
Taiwan’s current energy mix illustrates the magnitude of the challenge: last year, Taiwan’s power sector was 83 percent dependent on fossil fuels: coal accounted for about 42 percent of generation, natural gas 40 percent. percent and oil 1 percent. Nuclear power supplied 6 percent, and solar, wind, hydro and biomass power together nearly 10 percent. according to the Ministry of Economic Affairs.
Taiwan’s fossil fuels are imported by sea, leaving the island at the mercy of both international price fluctuations and a possible blockade by China. The government has tried to protect consumers from rising global prices, but that has resulted in mounting debt for Taiwan Electric Power Company (Taipower), the national supplier. In the event of a naval blockade by China, Taiwan could have about six weeks’ worth of coal reserves, but not much more than a week’s worth of liquefied natural gas (LNG). Given that LNG supplies more than a third of electricity generation, the impact would be severe.
The government has announced ambitious energy targets. The net zero 2050 roadmap released by Taiwan’s National Development Council in 2022 promised to shut down its nuclear sector by 2025. By the same year, the share of coal would have to drop to 30 percent, gas would have to rise to 50 percent. percent, and renewable energies would have to jump to 20 percent. None of those goals are on track.