Page 7 - GLNG Week 36 2022

GLNG COMMENTARY GLNG

Taiwan banks increasingly on

gas despite soaring cost

COMMENTARY Taiwan’s LNG imports are poised to see further now changed, with gas increasingly seen as the
growth in the coming years, in spite of soaring baseload power source of choice. Whereas gas
prices and the increased risk of China seeking accounted for only 10% of power generation in
to disrupt the island’s energy supplies. Its need 2001, this rose to 25% in 2011 and 37% in 2021.
for LNG has steadily risen over the years as its Last year, the country generated 108.3 TWh of
domestic production has declined, and the need power from its 19.2 GW of gas-fired power gen-
will only expand as environmental opposition eration capacity.
in Taiwan to coal and nuclear power generation This trend can largely be explained by grow-
increases. ing environmental opposition to both coal and
nuclear energy. A watershed moment came in
The rising role of gas January 2016, when the incoming Democratic
In 2001, Taiwan produced 12% of its gas domes- Progressive Party pledged to close all nuclear
tically, but by last year, the share had shrunk to reactors by 2025, and that coal use should be
only 0.4%. This has led to Taiwan becoming the reduced to only 30% of power generation.
biggest importer of LNG after China, Japan, At the same time, Taiwan wants to expand
South Korea and India last year, according to renewable energy to account for a fifth of elec-
data published by BP. Indeed, the 26.8bn cubic tricity output by the middle of this decade. But
metres of gas it imported was equal to more this is based on a very ambitious investment plan
than 5% of global LNG trade.Spending Taiwan that would see 5.5 GW of offshore wind and 20
primarily uses gas for power generation – the GW of solar capacity built within the space of a
power sector has nearly every year since the mid- few years.
2000s consumed about 75-80% of the gas that It seems unlikely that the government will
the country uses. Industry accounts for a further reverse its stance on coal and nuclear, given
10-15%, and there is relatively little gas used in those policies enjoy widespread public support.
the household sector. The closure of three nuclear reactors in recent
In the 2000s, Taiwan used gas-fired power years has already led capacity to fall from 5.144
primarily for shoulder and peak load needs, GW in 2016 to 2.859 GW at present. Only the
with coal and nuclear serving as the sources Kuosheng-2 and Maanshaan-1 and -2 reactors
of baseload generation. But the situation has remain in operation, and the target for their

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