As the Biden administration works to deepen trade, diplomatic, and defense ties with Taiwan in the face of escalating aggression from Beijing, the U.S. government should prioritize energy cooperation with the island. Improving Taiwan’s energy system is a necessary prerequisite to defending the island’s security, resiliency, economy, international space, climate ambitions, and democracy. Moreover, American support for Taiwan’s energy security would help safeguard critical U.S. supply chains, such as Taiwan-sourced semiconductors, and could further America’s influence on Beijing’s climate agenda as well.
Gaps in Taiwan’s energy security pose a significant liability to the island’s resistance against Beijing’s long-term aim of reunification. Taiwan’s reliance on foreign energy imports and its troubled transition away from fossil fuels have emboldened the mainland Chinese government to undermine and delegitimize Taiwan’s democracy. Beijing is also using Taiwan’s energy deficiencies to justify increased interconnection with Taiwan’s outer islands. U.S. policymakers interested in safeguarding Taiwan’s de facto independence, as well as those focused on mitigating climate change, should prioritize Taiwan’s energy security and assist with the island’s transition to renewable energy sources. Not only will this bolster Taiwan’s national security more broadly, but it could also be a potent way to indirectly influence Beijing’s thinking about renewables integration, climate policy, coal-to-gas switching, and nuclear power.
Taiwan’s energy security and climate dilemma
Taiwan’s energy insecurity is a dire situation. Since 2016, the island has experienced frequent power rationing and blackouts due to insufficient power supply reserves and intense heat waves.1 Two major outages occurred within a week in May 2021 due to a spike in demand resulting from a heatwave and a drought that impacted hydropower sources.2 The blackouts affected millions of residents in major cities, including Taipei and Kaohsiung, and briefly shut down production at a major Taiwan Semiconductor Manufacturing Company facility.3 In August 2017, Taiwan had experienced similar wide-scale blackouts that also affected semiconductor manufacturing companies.4 Taiwan is a critical player in the global semiconductor supply chain and is home to 62 percent of global semiconductor foundry capacity.5 Disruptions—including from power supply instability—to Taiwan’s ability to produce semiconductors would have serious downstream effects on U.S. businesses and consumers.
Over the past five years, low power reserve margins—a precursor to potential blackouts—have become a perennial concern and an intense political issue between the ruling Democratic Progressive Party (DPP) and the opposing Kuomintang (KMT).6 The Taiwan government is also struggling to implement an energy transition plan that shuts down all nuclear power by 2025 (which accounts for 10 percent of the island’s electricity generation) while preserving commitments to decreasing carbon emissions.7 Upon assuming Taiwan’s presidency in 2016, Tsai Ing-wen announced an ambitious energy plan to transition away from nuclear energy using a “20-30-50” fuel mix. This plan called for 20 percent of the island’s electricity to be generated by renewable sources, 30 percent to be generated from coal, and 50 percent to be generated from natural gas by 2025.8 However, this transition has proven to be an extremely difficult task. In 2020, renewables comprised only 5.5 percent of electricity generation, coal comprised 45 percent, and liquified natural gas (LNG) made up 35.7 percent.9
Nuclear energy remains a contentious political issue in Taiwan, with the DPP traditionally opposing nuclear power and the KMT supporting it. On December 18, the public voted in a referendum not to open a mothballed nuclear power plant in New Taipei, aligning with Tsai’s policy.10 While the DPP is committed to mitigating Taiwan’s emissions, its multidecade history of agitating against nuclear waste and power plants has not changed.11
Taiwan’s struggle to achieve its near-term energy transition is exacerbating an already difficult carbon emissions reduction path. In April 2021, President Tsai announced that the government was working on a plan to achieve net-zero carbon emissions by 2050, but Taiwan’s current emissions-reduction commitments are less ambitious than those of other developed countries, and Taiwan lacks a near-term blueprint for reducing emissions. Taiwan’s Greenhouse Gas Reduction and Management Act of 201512 committed Taiwan to reducing greenhouse gas emissions by 50 percent of 2005 levels by 2050, but Taiwan’s emissions have remained essentially unchanged since the law was enacted.13 While Taiwan’s emissions are certainly not as significant as mainland China’s, Taiwan is the 24th-largest global emitter, and its per capita emissions are higher than those of Singapore, Germany, and many other developed economies.14 Although Taiwan has put forth its own climate pledges, the government is not subject to the peer pressure or international support associated with the Paris Agreement pledges because China blocks Taiwan government officials from participating in the annual U.N. Framework Convention on Climate Change (UNFCCC) Conference of Parties.15
Besides its troubles in the power generation sector, Taiwan relies almost exclusively on imports to meet its overall energy needs due to its lack of natural resources. In 2020, 98 percent of its domestic energy consumption came from abroad.16 A majority of Taiwan’s energy resources are imported from the Middle East.17 Taiwan’s reliance on foreign energy imports is a major strategic vulnerability, especially when considering a cross-strait crisis scenario in which Beijing employs a blockade or exerts diplomatic pressure on energy exporters to “strangle” Taiwan.18 LNG supplies from Qatar and Russia in particular would likely be susceptible to potential Beijing pressure campaigns.19 In these scenarios, Taiwan’s energy insecurity undermines the island’s resiliency and ability to hold out before the United States and its allies can meaningfully come to its aid.
Beijing’s role
Further complicating the situation for Taiwan, the Chinese government has used Taiwan’s energy insecurity as a justification for increased economic connections and integration with the island. In a January 2019 speech, Chinese President Xi Jinping offered to supply “water, electricity, gas, and construction of sea-crossing bridges from coastal areas in Fujian province to Kinmen and Matsu in Taiwan,” giving high-level support for the “small four links” strategy of peacefully integrating Kinmen, a strategically valuable island controlled by Taiwan that is about six kilometers away from the major Chinese coastal city of Xiamen, into the mainland economy.20
More recently, during a visit to Fujian province in March 2021, Xi urged local officials to “be bold in exploring new paths for integrated cross-strait development.”21 Nongovernment cross-strait climate and energy cooperation currently consists of trade fairs and the Cross-Strait Forum on Climate Change and Sustainable Energy Development, now entering its 17th year.22 The vice chairman of the Fujian Science and Technology Association—a Chinese Communist Party United Front23 organization that “promotes the reunification of the motherland”—has also seized this opportunity to advocate for “strengthening exchanges and cooperation in the fields of energy and power … providing people on both sides of the strait with cleaner, reliable, economical, and sustainable energy supplies.”24
Although no major politician from Taiwan has explicitly endorsed the argument that Taiwan will enjoy greater energy security by integrating further with China, KMT politicians have previously signaled openness to “connecting electricity” between Kinmen and the mainland.25 Some local Kinmen politicians are also solicitous of energy and transportation linkages offered by the mainland, perceiving their own Taiwan government—and particularly the DPP—as inattentive to the island’s development.26
State-run media on China’s mainland also use Taiwan’s energy difficulties to denigrate Taiwan and show that democracies fail to deliver on public goods. State-affiliated media outlets such as the People’s Daily and Xinhua News have published numerous articles highlighting Taiwan’s energy shortcomings. For example, one article published in the People’s Daily after Taiwan’s blackouts in May 2021 described the island as a “severe disaster area” where people are living in “dire straits.”27 These articles not only mock the island’s frequent blackouts as explicit policy failures of the DPP, but they also claim that the policies are unpopular, such that the people of Taiwan are feeling “hopelessness, resentment and dissatisfaction” with the government.28
In academic circles, Chinese scholars have also used Taiwan’s energy shortcomings to argue the inferiority of a democratic system of government and subtly support Beijing’s more technocratic authoritarianism. Two mainland Chinese scholars writing for the Taiwan Research Journal, an influential publication that has been praised by high-level Chinese government officials, asserted that “the general [Taiwanese] public often does not have the professional knowledge to view Taiwan’s energy issues from the perspectives of technology, economy and the environment.”29 As a result, the scholars note, Taiwan authorities are more inclined to come up with popular energy policies rather than the most effective ones. Moreover, these scholars stress that Taiwan’s electoral and party politics lead to fragmented policies formed by too many stakeholders in society.30
While some mainland scholars subtly denigrate Taiwan’s democratic political system, others squarely assign blame on Taiwan’s policy implementation. Namely, they assert that Taiwan’s ruling authorities “lack coherence and effectiveness.”31 Similar to the arguments made by state-run media, these arguments maintain that strengthening cross-strait interconnectivity will solve Taiwan’s energy shortcomings.
Addressing Taiwan’s energy insecurity is a low-cost strategy that would address multiple short- and long-term U.S. priorities.
Recommendations for the United States
U.S. assistance in stabilizing Taiwan’s energy security and easing Taiwan’s energy transition could further U.S. interests regarding Beijing. Evidence from established Chinese publications suggests that Beijing views energy policies in Taiwan as potential models to be applied on the mainland.32 Chinese energy scholars and experts reference and study Taiwan’s energy experiences and have sought to learn from both successes and failures. For example, scholars from the School of Economics at Xiamen University penned an article in 2013 for a sustainable energy journal in which they summarized the successful practices of Taiwan’s new energy development to provide reference for the mainland. The article concluded that “mainland China can learn the experience of the new energy industry from Taiwan, such as new energy policies, advancing technology, and raising the awareness of environmental protection of its citizens.”33
More recently, in an assessment of Taiwan’s electric grid failures, researchers from the Energy Research Institute of China Southern Power Grid published an article in May 2021 that made proposals to China’s own electric power development.34 The researchers asserted that Taiwan’s blackouts “are of warning significance for our power and energy security.”35 This article was notably prescient as mainland China is now experiencing its own power outages, which, like Taiwan’s, have resulted from high electricity demand, the impacts of climate change, and the complications of energy transition efforts.36 Should U.S.-China bilateral climate cooperation continue to remain stalled, the United States can still indirectly influence Chinese government thinking on its climate policies by assisting Taiwan’s energy transition.
Taiwan’s energy insecurity is a multifaceted threat to the island and to American defense, economic, and climate interests. In light of this, the U.S. government should bolster its energy partnership with Taiwan and build a foundation for long-term cooperation.
One way to build this foundation is for the United States to expand the U.S.-Taiwan Economic Prosperity Partnership Dialogue, a five-year undersecretary-level dialogue agreed to by the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) in November 2020.37 The dialogue covers an array of issues—including energy infrastructure cooperation, economic ties, science and technology exchanges, and supply chains—and is an ideal venue for addressing Taiwan’s energy insecurity and climate policies.38
The Biden administration should continue and expand this dialogue by bringing in undersecretaries from the U.S. Departments of Commerce and Energy to co-lead the process; and it should also designate a permanent representative from the Office of the Special Presidential Envoy on Climate (SPEC) to attend. The Department of Commerce should promote trade and bring trade associations and commercial actors into the discussion, while the Department of Energy should explore long-term energy system planning with the Taiwan government and bring technical insights into bilateral trade advocacy and diplomatic discussions. The Department of Energy could also provide unique insights from the U.S. government’s ongoing cooperation with Taiwan in nuclear power plant decommissioning and nuclear waste management.39 Additionally, the U.S. Trade Representative should be leveraged to help support bilateral trade advocacy.
Besides deepening mutual dialogue, the United States can also take direct action to assist Taiwan’s energy insecurity by beginning exploratory discussions with the Taiwan government to establish a Clean Energy Research Center (CERC), modeled on the U.S.-China Clean Energy Research Center. The CERC model brings together government representatives, national labs, research and academic institutions, and industry into a joint research and development (R&D) consortium. The CERC model focuses on producing commercial and scalable intellectual property and best practices and policies that address shared needs. The U.S.-China version focused on advancing coal technology, building energy efficiency, and developing clean energy vehicles, among other issues.40 A U.S.-Taiwan CERC could explore shared needs such as microgrids, demand-side management, and battery storage. It could also capitalize on complementary strengths in areas like IT hardware, autonomous technology, and semiconductors.
The CERC model also creates a sustainable platform for building lasting government, research, and commercial ties, potentially recreating the U.S.-Taiwan industrial cooperation that led to breakthroughs in semiconductors in the ’80s and ’90s.41 Such a platform would help the United States address Taiwan’s immediate energy insecurity through shared research and build the foundation for a productive, long-term relationship on clean and renewable energy technologies.
Conclusion
The Chinese government appears set to increase pressure on Taiwan to unify over the next few years. The challenge for Taiwan and its allies, including the United States, will be to fortify Taiwan politically, economically, and militarily against a multipronged pressure campaign from China. Shoring up Taiwan’s energy security will be a key component of all three lines of effort.
Addressing Taiwan’s energy insecurity would also help further other critical American foreign policy goals. Helping Taiwan to successfully transition its energy system toward carbon neutrality would address the island’s high emissions trajectory and could affect Chinese government thinking and planning about the mainland’s energy transition process. U.S.-Taiwan science and technology cooperation around clean energy and the energy transition could also benefit America’s development path and that of other economies undergoing a dual transition (away from both nuclear and carbon-intensive power generation), such as Germany and Japan. Keeping the lights on in Taiwan is also of critical importance for American and allied supply chain security, which remains highly dependent on Taiwan-based semiconductor production.
As America re-engages with the world under the Biden administration, it must prioritize cost-effective strategies that meet multiple goals. Addressing Taiwan’s energy insecurity is a low-cost strategy that would address multiple short- and long-term U.S. priorities.
The author would like to thank Nina Palmer, senior fellow for China at the Center for American Progress; Jordan Link, China policy analyst at the Center; and Laura Edwards, China research and program associate at the Center, for their invaluable contributions to this report