Taiwan Explores Nuclear Options as AI Demand Soars

Taiwan's Shift Towards Nuclear Energy: A Response to Surging Demand

Taiwan is at a crucial crossroads as it grapples with an escalating demand for electricity, particularly driven by the semiconductor industry amid the artificial intelligence (AI) boom.

Premier Cho Jung-tai has opened the door to discussions on nuclear energy, marking a significant shift in government policy that has traditionally been sceptical of nuclear power due to safety concerns.

"As long as there is a consensus within Taiwan on nuclear safety and a good direction and guarantees for handling nuclear waste, with this strong consensus, we can have a public discussion," Cho stated in an interview with Bloomberg News.

His remarks signal a readiness to reconsider the role of nuclear technology in Taiwan’s energy landscape.

Is the Fear of Nuclear Energy Easing?

The decline in public support for nuclear energy following the Fukushima disaster in Japan in 2011 has long shaped Taiwan's energy policy.

The crisis led to heightened fears about nuclear safety, causing widespread resistance to the use of reactors.

However, as electricity demands soar — particularly from industry giants like Taiwan Semiconductor Manufacturing Co. (TSMC), which is pivotal in global semiconductor production — pressure is mounting on the government to explore all viable energy sources.

Cho expressed optimism, asserting, “We hope that Taiwan can also catch up with global trends and new nuclear technologies.”

This suggests a potential evolution in public perception as the urgency for reliable energy supply intensifies.

What Does the Future Hold for Nuclear Technology in Taiwan?

In a dramatic turn of events, the demand for electricity for AI applications in Taiwan is projected to grow from 240,000 kilowatts in 2023 to an astonishing 2.24 million kilowatts by 2028.

This eightfold increase could push the total electricity consumption in Taiwan beyond 300 billion kilowatt-hours by 2027.

Amidst this backdrop, electricity prices have already been raised twice this year, including a notable 12.5% increase for industrial users implemented this month.

With TSMC reassured by the government about securing sufficient electricity, water, and land for its expansion, the pressing question remains: can Taiwan sustain its economic growth without revisiting nuclear energy?

A Broader Context: Global Trends and Regional Security

Taiwan is not the only nation reassessing its stance on nuclear power.

Companies like Microsoft, Google, and Amazon are investing in next-generation nuclear technologies, while countries such as the Philippines and South Korea are exploring the feasibility of reviving dormant nuclear facilities.

These developments highlight a growing international trend towards embracing nuclear energy as a stable, carbon-free power source.

The geopolitical landscape also plays a role; recent military drills by China that simulate a blockade of Taiwan have raised concerns about energy security.

As Cho noted, “We also hope that through Taiwan’s efforts, the world will recognise Taiwan’s determination and provide greater support.”

The need to secure reliable energy supplies in the face of potential external threats is prompting a reassessment of nuclear power's viability.

Preparing for Future Nuclear Developments

Despite Taiwan's commitment to phasing out nuclear energy — with its last reactor set to be decommissioned in spring 2025 — Cho has taken proactive steps.

The No. 1 reactor at Pingtung's Third Nuclear Power Plant, Taiwan's only remaining nuclear facility, will cease operations by May 2025.

He stated that he would request the state-backed power provider to ensure that personnel from decommissioned reactors remain in their roles to facilitate the transition to future nuclear technologies.

This forward-thinking approach reflects the administration’s intent to keep nuclear energy as a potential option on the table, preparing for any legal or technological changes that may arise in the coming years.

Taiwan’s Global Partnerships: A Strategy for Resilience

The current administration, led by President Lai Ching-te, is also keen to enhance Taiwan's relationships with other democracies, particularly in light of increasing competition for TSMC’s capabilities.

“Taiwan’s economic resiliency comes from the partnership we have with friendly countries,” Cho remarked, emphasising the importance of a strong vertically integrated supply chain.

As nations like the United States and Japan vie for TSMC to build chip factories within their borders, Taiwan's strategy of fostering international cooperation appears to be an astute move, bolstering its position within the global semiconductor industry.

Defense Spending on the Rise: A Necessary Measure?

Amid these energy and economic considerations, Taiwan is also boosting its defense budget to unprecedented levels, with plans for record spending in 2025.

This increase is aimed at ensuring Taiwan's security in a region fraught with geopolitical tensions.

Former US President Donald Trump suggested that Taiwan should allocate 10% of its GDP to defense spending, a recommendation that Cho responded to with caution.

“While we cannot allocate 10% of GDP to defense in one go, we have increased the budget compared to the past,” he explained, indicating a measured approach to addressing security concerns.

As Taiwan navigates these complex challenges, the discourse surrounding nuclear energy is evolving.

The need for reliable power sources, the pressures of economic growth, and the realities of regional security are prompting a reconsideration of policies that were once firmly opposed to nuclear energy.

The government's willingness to engage in open discussions could signify a pivotal change in Taiwan’s energy strategy, potentially positioning the island as a leader in the democratic supply chain of the future.