Page 4 - AsianOil Week 35 2022

AsianOil COMMENTARY AsianOil

Taiwan banks increasingly on

gas despite soaring cost

Taiwan will need more and more gas-fired power as it phases out nuclear and

coal, and the role of intermittent renewables expands.

TAIWAN TAIWAN’S LNG imports are poised to see primarily for shoulder and peak load needs,
further growth in the coming years, in spite of with coal and nuclear serving as the sources
WHAT: soaring prices and the increased risk of China of baseload generation. But the situation has
Taiwan will learn more on seeking to disrupt the island’s energy supplies. Its now changed, with gas increasingly seen as the
gas in the coming years, need for LNG has steadily risen over the years baseload power source of choice. Wheregas gas
despite soaring prices. as its domestic production has declined, and the accounted for only 10% of power generation in
need will only expand as environmental opposi- 2001, this rose to 25% in 2011 and 37% in 2021.
WHY: tion in Taiwan to coal and nuclear power gener- Last year, the country generated 108.3 TWh of
The government is ation increases. power from its 19.2 GW of gas-fired power gen-
committed to phasing out eration capacity.
nuclear and reducing the The rising role of gas This trend can largely be explained by grow-
use of coal. In 2001, Taiwan produced 12% of its gas domes- ing environmental opposition to both coal and
tically, but by last year, the share had shrunk to nuclear energy. A watershed moment came in
WHAT NEXT: only 0.4%. This has led to Taiwan becoming the January 2016, when the incoming Democratic
Targets for expanding biggest importer of LNG after China, Japan, Progressive Party pledged to close all nuclear
renewables may be South Korea and India last year, according to reactors by 2025, and that coal use should be
overly ambitious, and data published by BP. Indeed, the 26.8 bcm of gas reduced to only 30% of power generation.
in any case, gas will be it imported was equal to more than 5% of global At the same time, Taiwan wants to expand
needed as a baseload LNG trade. renewable energy to account for a fifth of elec-
accomplament. Taiwan primarily uses gas for power gener- tricity output by the middle of this decade. But
ation - the power sector has nearly every year this is based on a very ambitious investment plan
since the mid-2000s consumed about 75-80% of that would see 5.5 GW of offshore wind and 20
the gas that the country uses. Industry accounts GW of solar capacity built within the space of a
for a further 10-15%, and there is relatively little few years.
gas used in the household sector. It seems unlikely that the government will
In the 2000s, Taiwan used gas-fired power reverse its stance on coal and nuclear, given

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