Industry groups and a number of lawmakers are urging the Lai Ching-te administration to reconsider phasing out nuclear energy.

Taiwan remains formally committed to ending its use of nuclear energy in line with an objective former President Tsai Ing-wen (2016-2024) first articulated in January 2015. The operating license for Unit 2 of Taiwan’s last active nuclear plant, Maanshan in Pingtung County’s Hengchun Township, is set to expire in May.

Nuclear power today accounts for less than 5% of Taiwan’s energy mix, down sharply from a peak of 52% in the 1980s, according to the Ministry of Economic Affairs. In the early 1980s, the government quietly built a nuclear waste storage facility on the southern coast of Orchid Island – home to the Indigenous Tao people – misleading residents by presenting the project as a fish cannery. When the true purpose of the facility came to light, it ignited decades of protest from the Tao community, who viewed the storage of radioactive waste on their ancestral land as a profound violation of their rights, an environmental injustice, and a threat to both their health and cultural survival.

While Taiwan has a deep-seated anti-nuclear movement in civil society, the roots of its current policy to phase out nuclear energy trace back to the early 2010s and the fallout from the earthquake-triggered Fukushima Daiichi nuclear disaster in Japan, widely regarded as the worst nuclear incident since Chernobyl.

Yet in recent months, there has been a palpable shift in the Lai Ching-te administration’s approach to nuclear energy. On the one hand, concerns about power supply are mounting in the business community, given Taiwan’s reliance on energy-intensive manufacturing. On the other, government is assessing how to increase whole-of-society resilience in the face of relentless pressure from the People’s Republic of China.

The government remains committed to developing diverse green energy sources while keeping the door open to “new” nuclear power under certain conditions, Premier Cho Jung-tai said in remarks to the Legislative Yuan in March. Cho did not go into many details about the conditions that would be necessary for Taiwan to reexamine its plan to phase out nuclear power, other than to say that nuclear safety must be ensured and a societal consensus on its use should be reached.

Among the options reportedly under consideration are Small Modular Reactors (SMRs) and Liquid Metal Reactors (LMRs), next-generation nuclear technologies that advocates say could help Taiwan strengthen its energy security without the risks associated with large-scale nuclear plants. SMRs, which are compact and factory-built, can be deployed incrementally and are considered safer than conventional reactors because of their passive cooling systems. LMRs, meanwhile, use liquid metal – typically sodium or lead – as a coolant, allowing for higher operating efficiency and the potential to recycle nuclear waste.

Supporters of these technologies argue that they could provide a stable, low-carbon source of energy that complements Taiwan’s renewable energy ambitions. Meanwhile, critics caution that significant regulatory, financial, and public acceptance hurdles remain.

“The Lai administration is under pressure both from the business community and from the United States to reconsider its position to better ensure the island’s energy security,” says Michael Cunningham, a research fellow at the Heritage Foundation Asian Studies Center in Washington, D.C. “The pressure isn’t all external – the administration is also keenly aware that if war ever breaks out with China, they’re going to have trouble importing energy resources from abroad.”

Because Taiwan relies on imports for about 96% of its energy, it is vulnerable to a maritime blockade and other disruptions of shipping lanes. Given that risk, policymakers have been exploring ways to boost resilience. In that context, nuclear energy that Taiwan can generate domestically might be useful. 

However, the more immediate concern is economic. Proponents of nuclear energy argue that it is stable, economical, and does not pollute the air – unlike fossil fuels. “Taiwan is currently pursuing industries with high added value and is developing vigorously, and this all requires electricity,” Tung Tzu-hsien, chairman of Taiwanese electronics manufacturer Pegatron and deputy convener of Taiwan’s National Climate Change Committee, said at a March forum on energy policy hosted by the opposition party Kuomintang.

Tung further stated that wind and solar power are “inefficient and vulnerable to climate change,” while natural gas prices are highly volatile, with supply chains “easily affected by winter demand and geopolitical conflicts.”

Power hungry

Taiwan’s reliance on energy-intensive manufacturing to drive economic growth complicates efforts to phase out nuclear energy. Manufacturing accounts for approximately 35% of Taiwan’s GDP, unusually high for an advanced economy. In comparison, it accounts for 25.5% in South Korea and 19% in Japan.

With the semiconductor industry accounting for the largest share of manufacturing, it is no surprise that it has substantial energy requirements. TSMC alone consumes about 8% of Taiwan’s electricity, according to S&P Global Ratings. By one estimate, Taiwan’s chipmakers by 2030 will consume twice as much electricity as all of New Zealand.

A major driver of Taiwan’s rising energy demand is its push to meet surging global demand for AI chips.Goldman Sachs estimates that data center power demand globally will grow 160% by 2030 as the use of AI applications rises.

“Taiwan’s AI industry is driving a substantial increase in electricity demand, especially due to the expansion of energy-intensive cloud computing and high-performance computing data centers,” says Helen Chang, a senior industry analyst at the semi-governmental Market Intelligence & Consulting Institute.

Chang notes that advanced AI chips such as Nvidia’s H100 and AMD’s MI300X rely on cutting-edge process nodes (4 nanometers or 5 nanometers), consuming three to five times more power than mature nodes (larger than 16 nanometers).

These chips require stable, high-quality power to maintain manufacturing yield rates, she says. She estimates that based on power consumption plans from AI-related industries, including data centers and semiconductor companies, Taiwan’s additional electricity demand from these sectors could exceed 30 billion kWh by 2028.

All options on the table

At present, the Lai administration seems intent on exploring a wide variety of solutions to Taiwan’s energy challenges. While its willingness to consider the continued use of nuclear power signals a break with its predecessor, Lai’s government remains hesitant to commit itself to reversing what has been a longstanding policy of the ruling Democratic Progressive Party (DPP), analysts say.

“The DPP has always been opposed to nuclear energy,” says the Heritage Foundation’s Cunningham. There would be political costs to deviating from that path, he reckons. “It’s clear that some around President Lai see nuclear energy as important, but it’s hard to tell whether the administration is really open to embracing nuclear or whether it’s just saying what it needs to in order to keep key stakeholders happy.”

For its part, the United States has signaled an interest in deepening energy cooperation with Taiwan. “The United States is already the world’s largest energy exporter, and we can offer Taiwan the full range of energy solutions, from geothermal to nuclear to advanced grid technologies,” American Institute in Taiwan Director Raymond Greene said at AmCham Taiwan’s Hsieh Nien Fan banquet in March.

Greene mentioned liquefied natural gas (LNG) from Alaska’s North Slope LNG project. “This project and its short delivery supply chains have the potential to provide Taiwan a new stable and secure source of energy,” he said. “It also offers the opportunity to strategically bind the United States, Taiwan, and other partners in the region even closer together.”

Renewables will also remain integral to Taiwan’s energy mix, particularly solar and wind. In December 2024, the Executive Yuan approved a four-year plan to offer subsidies of up to NT$300,000 (around US$9,250) each to install rooftop solar panels on private residential buildings. The subsidy plan comes as MOEA pushes back a target for solar photovoltaic installations to 2026.

Speaking at the Wind Energy Asia Expo in Kaohsiung in February, Vice Minister of Economic Affairs Lien Ching-chang said that Taiwan has completed six offshore wind farms and installed 374 wind turbines. He described Taiwan as a “global leader” in terms of growth in offshore wind power capacity.

That said, Taiwan remains well behind its target of renewables, accounting for 20% of the energy mix by 2025. As of the end of 2024, renewables accounted for just 11% of the energy mix.

In a November 2024 research note, American credit rating agency Fitch Ratings said that “a strong push toward renewable energy and rising demand from various sectors are driving a significant change in Taiwan’s power market” but that “SMEs face notable obstacles in meeting renewable targets, with rising electricity costs adding pressure.”