Taiwan is reconsidering its anti-nuclear energy policy as it grapples with mounting dependence on liquefied natural gas imports and volatile international prices. The island completed its nuclear phaseout in May 2025 following a policy established by the Democratic Progressive Party in 2016, which coincided with deliberate reductions in coal consumption. This transition shifted electricity generation increasingly toward natural gas, which now accounts for 50.5% of Taiwan’s electricity supply as of July 2026, up from 30.6% in 2015.
Taiwan imports all of its natural gas supply as LNG, with purchases growing substantially. In 2025, LNG imports reached 23.6 million tonnes, representing a 9% year-on-year increase. Throughout 2026 to date, monthly imports have consistently exceeded prior-year levels. However, the conflict between the US and Iran beginning in March 2026 disrupted global LNG markets, triggering a blockade of the Strait of Hormuz and halting Qatari exports. This geopolitical event caused the Asian spot LNG benchmark to nearly triple over six months to approximately $29 per million British thermal units. Qatar, which had supplied roughly 600,000 to 800,000 tonnes monthly, was replaced by US and Australian suppliers, though US shipments later declined while Australian volumes increased significantly.
The elevated LNG costs have strained Taiwan’s public finances and contributed to inflationary pressures. State utility Taipower reported a first-half pre-tax loss of approximately $810 million and anticipates over $3.8 billion in additional fuel costs for 2026. The government proposed a $13.3 billion energy package to support the state-owned oil and gas supplier and subsidize costs. These fiscal challenges have motivated authorities to restart nuclear reactors to reduce LNG exposure.
Taiwan’s nuclear revival is now progressing through formal channels. A May 2025 regulatory amendment permitted reactors with expired licenses to apply for renewals lasting up to 20 years. Taipower submitted a restart application for the Maanshan nuclear station in March 2026, and regulators began substantive review in April, advancing to concluding review rounds by July. Maanshan’s two reactors offer 1.9 gigawatts of capacity, with unit 2 potentially operational by 2027, capable of displacing roughly 1 million tonnes of LNG annually. Unit 1 restart is not anticipated before 2028. The Kuosheng facility, adding another 1.97 gigawatts, faces a longer timeline, with restarts potentially occurring no earlier than 2031 due to spent fuel handling requirements.
While nuclear restarts could collectively displace 4 to 4.5 million tonnes of LNG annually, Taiwan faces a complex energy management challenge. Growing electricity demand, projected to increase 2.5% annually over the coming decade, means restored nuclear capacity would primarily moderate LNG import growth rather than enable substantial reductions. Taiwan must secure sufficient LNG through the extended transition period while maintaining contractual flexibility to adjust purchases if reactor restarts proceed on schedule. The energy strategy therefore depends on balancing immediate supply security with long-term cost management as nuclear generation gradually returns to service over multiple years.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI