It’s not just about improving your abilities. Taiwan’s energy dilemma is a combination of national security, climate, and political challenges. The island relies on imported fossil fuels for about 90 percent of its energy and lives under increasing threat of blockade, isolation and invasion by China. Furthermore, for political reasons, the government has promised to close down the nuclear sector by 2025.
Taiwan regularly attends United Nations climate change conferences, but has never participated as a participant. Taiwan, which has been excluded from UN membership due to China’s strong demands, held a side event to adopt the Paris Agreement goals of achieving peak emissions by 2030 and net zero by 2050. , asserting its presence on the periphery. Major companies including TSMC have signed the agreement. We have joined RE100, the corporate renewable energy initiative, and committed to achieving net-zero production. But at the moment, there is a huge gap between aspirations and performance.
Angelica Own, a journalist and founder of the Clean Energy Transition Alliance, a nonprofit organization that advocates for a rapid energy transition, has been studying Taiwan’s energy sector for many years. When we met at a restaurant in Taipei, she cheerfully ordered an incredible amount of food while we were talking, cramming it all around a small table. Mr Own described two major power outages. The first was in 2021, when TSMC and 6.2 million households were affected for five hours, and the second in 2022, when 5.5 million households were affected. This is a sign that the energy system is operating dangerously close to its limits, she says.
Nicholas Chen argues that the government is not even keeping up with existing demand. “We’ve had four major power outages in the past eight years, so power outages are common,” he said.
In a secure system, the operating margin of the power grid (the buffer between supply and demand) should be 25%. In Taiwan, profit margins have fallen to as low as 5% several times this year, Own explained. “This shows that the system is vulnerable,” she says.
Taiwan’s current energy mix illustrates the scale of this challenge. Last year, Taiwan’s power sector was 83% reliant on fossil fuels, with coal accounting for about 42% of power generation, natural gas 40% and oil 1%. According to the Ministry of Economy, nuclear power provided 6%, and solar, wind, hydropower and biomass together provided nearly 10%.
Taiwan’s fossil fuels are imported by sea, leaving the country at the mercy of both international price fluctuations and the possibility of an economic blockade by China. The government’s efforts to protect consumers from rising global prices have resulted in mounting debt for state-run power company Taiwan Power Company (Taipower). In the event of a Chinese naval blockade, Taiwan could only have about six weeks’ worth of coal reserves, but only one week’s worth of liquefied natural gas (LNG) at most. The impact will be severe, given that LNG supplies more than a third of electricity generation.
The government has announced ambitious energy targets. The 2050 Net Zero Roadmap released by Taiwan’s National Development Commission in 2022 commits to shutting down the nuclear sector by 2025. By the same year, the share of coal needs to fall to 30% and the share of gas needs to rise to 50%. Once that percentage is reached, renewables will have to jump to 20 percent. None of these goals are on track.
