Taiwan Joins Others in Asia Restarting Coal-Fired Units Due to Iran War

Why It Matters

The decision underscores how geopolitical shocks can force energy‑intensive economies to revert to carbon‑heavy fuels, highlighting vulnerabilities in Taiwan’s LNG‑dependent power mix. It also signals potential policy reassessments toward nuclear and renewable sources as supply security becomes paramount.

Key Takeaways

• Taiwan restarts 1 GW coal capacity for three months
• LNG supply disruptions from Iran war prompt coal comeback
• Neighboring Asian nations also expanding coal generation amid LNG risk
• Taiwan's electricity demand rising due to high‑tech sector growth
• Potential policy shift may revisit nuclear power options

Pulse Analysis

The Iran‑Qatar conflict has sent ripples through global energy markets, sharply curtailing LNG output from one of the world’s largest exporters. Taiwan, which sources roughly one‑third of its liquefied natural gas from Qatar, faced immediate supply uncertainty as 17% of Qatari LNG capacity went offline. With its power grid already strained by surging demand from the semiconductor and broader high‑tech sectors, Taipower opted for a pragmatic stopgap: re‑activating two coal units at Mailiao to ensure uninterrupted electricity delivery while LNG imports are re‑routed or stockpiled.

Taiwan’s short‑term coal resurgence mirrors a broader regional trend. Japan, South Korea, Thailand and the Philippines have similarly lifted coal generation limits, betting on the fuel’s reliability amid volatile gas markets. While coal’s lower carbon intensity compared with oil makes it a tolerable bridge, the move raises environmental concerns, especially as Taiwan’s 2025 power mix already featured 37% coal and 47% natural gas. The temporary restart adds to existing coal capacity at Mailiao, which still operates three 600‑MW units, and highlights the delicate balance policymakers must strike between emissions targets and grid stability.

Looking ahead, the episode may accelerate Taiwan’s energy policy overhaul. Officials are already weighing the revival of nuclear power, with applications filed to restart the Maanshan and Kuosheng reactors, and are likely to intensify investments in renewables and storage to reduce reliance on imported fuels. The three‑month coal window provides a data point for assessing the feasibility of a more diversified mix, while also prompting scrutiny of environmental safeguards during the restart period. As geopolitical tensions persist, Taiwan’s experience illustrates the strategic imperative for energy‑secure, low‑carbon pathways in the Asia‑Pacific region.