Taiwan Mulls Nuclear Revival to Cut Its LNG Exposure

Taiwan is moving toward a nuclear comeback barely a year after shutting its last reactor, as soaring LNG prices and mounting dependence on imported gas force a rethink of its energy strategy. The preparations are already tangible: Taipower has submitted a restart plan for the Maanshan nuclear power station, and regulatory reviews are advancing. But restoring nuclear generation will take years, limiting its ability to ease the immediate supply squeeze. Taiwan may be preparing to reduce its LNG exposure, but it will first have to navigate an expensive transition.The island shut its last operating reactor in May 2025, completing the nuclear phaseout pursued by the Democratic Progressive Party (DPP) after it took office in 2016. Alongside deliberate efforts to reduce coal use (from 45.4% in 2015 to 30% in 2026), that policy shifted more of the electricity burden onto natural gas. While natural gas supplied 30.6% of Taiwan’s electricity in 2015, in July 2026 it already covered 50.5% of its generation.Taiwan is fully reliant on LNG imports in terms of its natural gas consumption, and the imports have been constantly increasing. In 2025, LNG imports increased by almost 9% year-on-year to 23.6 million tonnes. In 2026 to date, every month has been a year-on-year increase in terms of LNG imports, taking in so far 16.3 million tonnes of LNG between January and August so far, already 6% more than last year by this point.Now, following the outbreak of the US-Iran war in March 2026, the blockade of the Strait of Hormuz and the resulting halt in Qatar’s LNG exports on the marker, that dependence comes at a substantially higher price. The Asian spot LNG benchmark JKM has almost tripled over the past six months to around $29/MMBtu, while the disappearance of Qatari supplies from the market has forced Taiwan to reorganise its purchases. Qatar previously supplied roughly 600,000–800,000 tonnes a month. The US initially became the largest source of replacement LNG, accounting for 48% of Taiwan’s imports in June (or 880,000 tonnes). However, US shipments declined to 470,000 tonnes in August. Australia then became Taiwan’s largest supplier, delivering 950,000 tonnes in July and 1.1 million tonnes in August.Higher LNG prices have added to inflationary pressure and imposed a substantial burden on public finances. The inflation forecast was lifted from 1.93% to 2.07% in August, despite measures shielding consumers from rising energy costs. With gas supplying half of Taiwan’s electricity and regulated tariffs preventing full cost recovery, Taipower reported a first-half pre-tax loss of approximately US$810 million and projected more than US$3.8 billion in additional fuel costs for 2026. The government’s proposed US$13.3 billion energy package is supposed to help recapitalise Taiwan’s state-owned oil and gas supplier CPC and subsidise oil, gas and electricity costs. This growing fiscal burden has been a strong reason for the state authorities to restart nuclear reactors to reduce LNG dependence and the cost of keeping electricity affordable.The nuclear option is therefore becoming more commercially compelling, and the legal route has already opened. A May 2025 amendment to the Nuclear Reactor Facilities Regulation Act allowed reactors with expired licences to apply for renewals of up to 20 years. Taipower submitted Maanshan’s restart application in March 2026, and the regulator began substantive review in April, progressing to its concluding review round by July. The DPP has not formally abandoned its nuclear-free policy, but legal preparations to reverse its practical consequences are underway.For Taiwan’s economy, the primary prize of nuclear comeback is the recovery of almost 3.9 GW of nuclear generating capacity, potentially reducing the volume of expensive LNG it must buy in a volatile international market. Maanshan’s two 951-MW reactors provide 1.9 GW of gross capacity, while Kuosheng’s two 985-MW reactors add another 1.97 GW. These are substantial sources of electricity, thereturn of which could materially change Taiwan’s gas requirements.Maanshan offers the nearer opportunity, and its unit 2 reactor is planned to come back to operation already in 2027. Restarting one reactor could replace around 1 million tonnes of LNG annually. Restarting the second reactor would substitute roughly 2 million tonnes of LNG, however this is not expected to happen earlier than 2028. Of course, those figures represent full-year potential rather than savings Taiwan could automatically achieve in the calendar year of a restart. Equipment restoration, safety assessments and renewed operating licences must precede any potential re-commissioning.Kuosheng would roughly double the capacity restored, bringing potential LNG displacement across the four reactors to around 4–4.5 million tonnes a year. Its contribution is further away, however, because spent fuel must first be removed from the reactors and sufficient storage capacity made available before refurbishment and safety reviews can proceed, and thus is expected to happen not earlier than 2031. The economic benefit would also depend on how much nuclear output replaces gas-fired generation. Taiwan’s electricity demand will undoubtedly keep growing (the Ministry of Energy anticipates an average annual rate of 2.5% over the next decade), and while some of the restored nuclear output would meet that extra demand, nuclear power could only slow the growth of LNG imports without completely substituting it.That creates an energy dilemma: Taiwan must secure enough LNG to cover the time before nuclear generation resumes, while preserving room to reduce purchases if nearly 3.9 GW returns to service. Flexible-delivery volumes and staggered contract expiries would help manage that uncertainty. Overcommitting could leave buyers paying for gas they no longer need, while buying too little will expose them to expensive spot cargoes if reactor restarts get postponed. The commercial value of the restart therefore lies both in the LNG it could displace and in Taiwan’s ability to adjust its purchasing commitments as the timetable becomes clearer. With nuclear restarts potentially happening from 2028 onwards, Taiwan cannot yet count on nuclear power to reduce its immediate gas procurement needs.By Natalia Katona for Oilprice.comMore Top Reads From Oilprice.comGermany Weighs Market Incentives to Boost Record Low Gas Storage LevelTTF Gas Hits $92.95 as Gulf Tensions Weigh on Energy MarketsUkraine Hits Refinery as Moscow Prepares to Extend Diesel Export Ban