Taiwan's energy security at a crossroads

Vyra Wu, DIGITIMES Asia, Taipei 0

US Department of Defense

With global climate change on the rise and geopolitical risks looming, resource and energy supplies are increasingly constrained. For Taiwan, which imports 98% of its energy, strategic planning and leveraging technological capabilities are essential to swiftly adapt to challenges and ensure stable societal operations, thus averting crises stemming from resource and energy shortages.

During a recent tabletop exercise in Taiwan involving over a hundred national security, intelligence, and political-economic experts, it was discovered that one of Taiwan's most vulnerable points is the fragility of its energy supply.

Taiwan's historically low utility rates have failed to accurately reflect costs, but with the nation heavily reliant on imported resources, any international price surges would result in substantial losses for state-owned enterprises like Taiwan Power Company (Taipower), in a global pursuit of net-zero emissions to combat extreme weather events and global warming, low energy prices have failed to incentivize energy conservation and carbon reduction, ultimately undermining energy resilience and economic stability.

Experts emphasized that Taiwan's energy vulnerability in times of conflict underscores the necessity for diversified energy sources. With a mere two weeks of natural gas reserves, Taiwan must explore alternative energy options, with nuclear energy being a contentious but potentially essential component. Maintaining existing nuclear power plants and increasing their output by 10% could address the issue effectively, as suggested by Chi-Yuan Liang, a researcher of Chung-Hua Institution for Economic Research.

Energy is a significant vulnerability in times of war, especially with natural gas supply constraints. Long-term solutions such as nuclear power, oil-fired power generation, and increased coal reserves must be considered.

However, there are challenges in realizing these solutions. With delays in the construction of liquefied natural gas terminals and environmental assessments hindering projects, relying solely on natural gas for 50% of electricity generation by 2025 appears untenable.

Furthermore, enhancing energy resilience entails bolstering emergency response Standard Operating Procedures (SOPs), updating SOPs for greater flexibility, and investing in advanced technologies for monitoring and coordination. Strengthening emergency training for personnel and ensuring robust communication infrastructure are also paramount.

In light of potential island blockades, Taiwan must strengthen its energy storage and transportation capabilities, particularly in the eastern region. Expanding energy infrastructure and adopting innovative solutions such as Floating Storage and Regasification Units (FSRUs) could mitigate risks associated with supply disruptions.

As Taiwan approaches its 2025 target of becoming a "nuclear-free homeland," a goal set without the pressure of achieving net-zero emissions, the landscape has significantly shifted. Climate change threats have intensified, necessitating a reevaluation of priorities. Energy resilience, and maintaining a secure power supply, require a diversified approach to power generation.

Larry Diamond, a senior fellow at Stanford University's Hoover Institution, emphasized earlier this year at a public forum in January that energy resilience is crucial for Taiwan to receive effective assistance during times of crisis. However, he noted that without nuclear energy, Taiwan would struggle to achieve true energy resilience.

As Taiwan navigates global energy trends and strives towards energy efficiency and carbon neutrality, a nuanced approach involving price adjustments, energy diversification, and accelerated renewable energy development is necessary to ensure societal stability and economic prosperity amidst the evolving geopolitical landscape.