Taiwan pivots to coal power as Mid-East war disrupts global LNG market
Why it matters: Taiwan's pivot to coal will cost billions in additional oil and gas spending and impact global chipmakers.
- Taiwan Power, the state-owned utility, will procure more coal-fired power from the Mailiao plant starting in May to bolster energy security.
- The Ministry of Economic Affairs stated this move addresses LNG supply risks and mitigates the impact of high gas prices on electricity rates.
- Global energy markets have been upended by the war between the US, Israel, and Iran, cutting LNG and crude oil flows and forcing countries like Japan, South Korea, Bangladesh, and European nations to increase coal reliance.
- Taiwan, a hub for top chipmakers, typically relies on LNG for about half its electricity, with a third of its 2025 supplies from Qatar, which has seen export plant shutdowns and Strait of Hormuz closures.
- Taiwan's opposition chief is simultaneously traveling to China on a 'peace' mission, as detailed by Straits Times Asia and Channel News Asia, adding a layer of diplomatic complexity to the island's energy crisis.
Taiwan is significantly increasing its reliance on coal-fired power generation to secure energy supplies, as the ongoing Middle East conflict disrupts global liquefied natural gas (LNG) markets and drives up prices. This pivot comes as Taiwan's opposition leader embarks on a 'peace' mission to China, highlighting the complex geopolitical landscape the island navigates.
