Amid Iran War Energy Crunch, Taiwan Turns Back Toward Nuclear Energy

Why It Matters

Restoring nuclear capacity could shore up Taiwan’s energy resilience amid volatile Middle‑East supplies and rising Chinese pressure, directly protecting its high‑value tech sector. The policy shift also signals Taiwan’s willingness to make hard choices to maintain international support and deterrence credibility.

Key Takeaways

• Taiwan plans to recommission two nuclear reactors by 2028.
• Energy security linked to semiconductor industry's global importance.
• China's offer highlights shifting geopolitical energy competition.
• Renewables remain minor; nuclear seen as short‑term fix.

Pulse Analysis

The recent flare‑up in the Iran‑Israel conflict has choked the Strait of Hormuz, a key artery for liquefied natural gas (LNG) shipments to Taiwan. With half of its power generation relying on imported gas in 2025, Taiwan faced a sharp rise in crude‑oil prices that knocked the Taiex index down nearly two percent. Although the island has not yet experienced physical shortages, the market reaction underscored the vulnerability of an energy system dependent on distant, geopolitically sensitive supply routes. Analysts warn that any prolonged disruption could ripple through Taiwan’s semiconductor supply chain, threatening the global AI and chip markets.

Against this backdrop, President Lai Ching‑te’s administration reversed the Democratic Progressive Party’s long‑standing anti‑nuclear stance, directing Taipower to file restart plans for the Guosheng No. 2 and Maanshan No. 3 reactors. The proposal emphasizes a phased, regulatory‑driven recommissioning schedule, with full operation projected for 2028 rather than an emergency, short‑term activation. By invoking small‑modular reactor (SMR) technology as a safer alternative, the government seeks to allay public safety concerns while signaling a pragmatic response to energy insecurity. This policy pivot also reflects a broader strategic calculus: ensuring a reliable power supply for the island’s high‑tech sector, which underpins the so‑called "Silicon Shield" that deters aggression.

Looking forward, Taiwan’s energy debate will balance nuclear revival against the growth of renewables, which currently supply just over 12 percent of the mix. Critics argue that centralized nuclear plants could become strategic targets in a conflict, whereas a decentralized renewable grid offers greater resilience. Nonetheless, the nuclear restart is positioned as a bridge solution, buying time for the island to expand solar, wind, and storage capacity while maintaining the industrial output that keeps global partners invested in Taiwan’s security. The decision thus serves both domestic energy stability and international diplomatic signaling, reinforcing Taiwan’s resolve to protect its economic lifelines amid escalating regional tensions.