Nuclear Plant Shutdown Leaves Taiwan Facing Energy Crunch

(Bloomberg) -- In 1996, a rust-streaked freighter carrying barrels of nuclear waste attempted to dock at Orchid Island off the southeast coast of Taiwan. It never made it to shore. Hundreds of residents, mostly from the island’s indigenous community, blocked the vessel with fishing boats and rocks, forcing it to turn back. It was the last time nuclear waste was sent there.

“I told them, if they insisted on coming in, we would burn the ship that night,” recalled Kuo Chien-ping, one of the movement’s leaders. Onshore, residents armed with rocks and bottles they claimed were filled with gasoline — it was actually water — lined the pier prepared to defend their island, also known as Lanyu. “It was the first time the government really listened to us,” said Syaman Lamuran, whose entire family joined the protest. “Everyone was there. Even my mother, barely five feet tall, was clutching a stone.”

That defiant moment — part resistance, part reckoning — helped shape Taiwan’s decades-long retreat from nuclear energy. The island will shut its last reactor on Saturday, the culmination of a phaseout strategy that threatens Taiwan’s energy-guzzling chip industry and its security as tensions with China rise. The move also runs counter to the growing global appetite for atomic power, especially in nations racing to fuel AI infrastructure and meet climate change emissions targets.

Taiwan’s decision comes with a steep price. This weekend’s final reactor shutdown, the sixth since 2018, takes place just as power demand is projected to rise 13% by the end of the decade, largely driven by datacenters and chipmakers. Each shuttered reactor adds about $500 million in annual liquefied natural gas import costs, according to Bloomberg calculations. 

Taking into account energy demand growth, Taiwan may need to spend around $2 billion more per year on LNG purchases by 2030, according to a BloombergNEF analysis. Already, companies like Taiwan Semiconductor Manufacturing Co., or TSMC, face soaring electricity bills, with rates on the island surpassing those at their overseas plants.

That’s why nearly three decades since that standoff on Orchid Island, smaller and less hostile protests have been organized in downtown Taipei, this time in support of keeping the Maanshan nuclear plant on Taiwan’s southern tip online. Over a hundred activists, including lawmakers and staff from state-utility Taiwan Power Co., stationed themselves outside the Ministry of Economic Affairs early this month and raised red banners reading, “The wrong policy will destroy Taipower.”

Rising fuel costs and renewable energy investments have weighed on the finances of Taipower, the island’s primary power supplier. The state utility, which has absorbed higher costs to keep prices affordable, reported over NT$420 billion ($14 billion) in accumulated losses by the end of last year. That’s putting pressure on the government to increase power rates for businesses and households.

“Taipower can only stop having losses if it extends the life of nuclear plants,” because those facilities don’t operate at a loss, said Java Yang, a Taipower worker and organizer of the May 1 pro-nuclear demonstration. “We lost lots of money because the price of natural gas has surged, and we paid too much for renewable energy.”

There have been signs that the government is softening its stance. Taiwan’s legislature revised a nuclear power bill on Tuesday that effectively opens the door for a restart of the island’s atomic plants by renewing or extending licenses for up to 20 years, but it isn’t clear if the central government will push forward with that strategy. For now, it’s too late to halt the closure of Maanshan, which is hitting its 40-year operational limit. Premier Cho Jung-tai said it could take 3.5 years to safely restart a closed plant, citing an estimate from Taipower.  

Nevertheless, one of Taiwan’s opposition parties said it intends to hold a public referendum on resuming operations at the plant in August. A similar vote in 2021 narrowly cemented the closure of one nuclear plant. This time could be different. 

“Taiwan’s public opinions seems to indicate that this referendum will definitely pass,” said Chang Chi-kai, a lawmaker from the opposition Taiwan People’s Party. “The Referendum Act stipulates that when a referendum passes, the government has the responsibility and duty to implement it.”

Economic and Security Risks

Starting in the early 1980s, shipping nuclear waste for storage on Orchid Island was standard practice, though most local residents weren’t initially told what was happening. But following the highly-publicized protests nearly three decades ago, no other Taiwanese town was willing to accept the shipments. High-level waste, like spent fuel from reactors, was just stored on site at nuclear plants.

With no permanent waste disposal site, the government was under increasing pressure to reduce atomic generation. Then came the 2011 Fukushima disaster in Japan — a magnitude 9.0 earthquake off the coast severely damaged the Fukushima Dai-ichi power plant, leading to a partial meltdown that released radiation into the surrounding air, water and soil. It was the worst nuclear accident since Chernobyl. 

That calamity — accompanied by a devastating tsunami — was the final nail in the coffin for Taiwan’s nuclear industry.

“Taiwan has many geographical faults and we have a lot of earthquakes, so the risk of an accident happening here is higher,” said Tsai Ya-ying, a lawyer at Wild at Heart Legal Defense Association. “One nuclear accident can be considered the end of Taiwan.”

Following a decisive 2016 election victory, the Democratic Progressive Party cemented a complete nuclear phaseout into law.

At the time, the goal was for Taiwan to accelerate the deployment of wind and solar to replace nuclear. But the island has fallen short on those goals. Initially targeting 20% renewables by mid-decade, the government downgraded its goal to 15% by 2025. As of late 2024, renewables made up less than 12% of the energy mix, according to Taiwan's energy administration.

To maintain a stable power supply, Taipower is adding nearly five gigawatts worth of gas-fired capacity to the grid this year, equal to roughly five nuclear reactors. Taiwan's power supply will be stable through at least 2032, Premier Cho said last month.

"New electricity consumption has been taken into consideration, and the addition of new units is larger than decommissioning to ensure a stable power supply," Taiwan's energy administration added.

Removing nuclear from the energy mix will raise power generation costs by NT$100 billion annually, according to Chang, the opposition lawmaker. Also at risk are green goals: Taiwan aims to reduce its emissions by about 38% in 2035 from 2005 levels. TSMC expects to hit peak carbon emissions this year.

Following the reactor shutdown this weekend, Taiwan will derive roughly 84% of its electricity from fossil fuels — up slightly from 2024. Nuclear contributed about 5% of electricity generation in 2024, down from 20% in the early 2000s. While nuclear generates toxic long-term waste, it produces almost no greenhouse gas emissions, unlike coal and gas. 

“If we phase out nuclear, our carbon emissions will spike,” warns Eugene Chien, a government adviser who heads the Taiwan Institute for Sustainable Energy, or TAISE. He noted that environmental concerns are pushing more citizens to reconsider nuclear energy. In November, a TAISE poll showed 58% of respondents supported nuclear power, while 23% opposed it.

That’s an increasingly global trend. Even Japan has moved away from its decision to shut down nuclear plants — last month its atomic watchdog approved the first nuclear restart since 2021. Nations from the US to Belgium are taking similar steps. 

Moreover, Taiwan’s reliance on seaborne LNG shipments to fill the gap doesn’t just heighten environmental concerns — it creates a strategic vulnerability amid rising tensions with China, which considers the self-governing island to be part of its territory. A Chinese blockade could prevent deliveries and quickly drain gas reserves. With just 11 days of gas storage, Taiwan faces a serious risk if shipments are disrupted by conflict or disaster, Chien said. 

Even with pockets of support for nuclear emerging on Orchid Island, many of its roughly 5,000 residents remain wary, fearing links between the waste and health issues, including cancer and deformities in local fish. While earlier protests succeeded in halting new waste shipments, efforts to move the existing waste have largely stalled. 

“I’ve fought for 30 years,” said Kuo from Orchid Island. “How many 30 years do we have in life? I am still fighting.”

(Adds rising global support for nuclear power in 23rd paragraph.)

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