Taiwan Mulls Nuclear Revival to Cut Its LNG Exposure

Taiwan is considering reactivating its nuclear power plants to reduce its reliance on liquefied natural gas (LNG) imports, which have seen a significant increase in price and usage following geopolitical tensions. The island nation shut down its last nuclear reactor in May 2025, following a nuclear phaseout policy initiated by the Democratic Progressive Party (DPP) in 2016.

While Taipower, the country's power company, has submitted a restart plan for the Maanshan nuclear power station, the process of restoring nuclear generation will take years, limiting its immediate impact on easing the energy supply squeeze caused by soaring LNG prices.

The increase in LNG prices and Taiwan's dependence on imports has already contributed to inflationary pressures, with the inflation forecast raised from 1.93% to 2.07% in August 2026. To cope with the situation, Taipower, which already accounts for 50.5% of Taiwan's electricity generation through LNG, has been forced to seek alternative sources of power. As a result, the country is shifting its focus to LNG suppliers such as Australia, which has become Taiwan's largest LNG supplier in recent months.

The economic benefits of a nuclear comeback are substantial, with the potential to restore nearly 3.9 GW of nuclear generating capacity. This would significantly reduce Taiwan's dependence on expensive LNG imports and help keep electricity costs affordable. Taipower's Maanshan reactor, with its two 951-MW units, offers a nearer opportunity for a nuclear restart, with the first unit expected to come back online in 2027.

However, the full potential of nuclear power in reducing LNG imports is not expected until 2028, as spent fuel removal and storage capacity are required before refurbishment and safety reviews can proceed.

The decision to restart nuclear reactors is becoming more commercially compelling due to the growing fiscal burden imposed by the high cost of LNG imports and the need to keep electricity prices affordable. The government has proposed a US$13.3 billion energy package to help recapitalize Taiwan's state-owned oil and gas supplier CPC and subsidize oil, gas, and electricity costs.

Nonetheless, the decision to revive nuclear power comes with an energy dilemma, as Taiwan must secure enough LNG to cover the time before nuclear generation resumes while preserving room to reduce purchases if the nearly 3.9 GW of restored nuclear capacity returns to service.