Taiwan Increases Coal Power to Secure Energy Supply Amid Middle East LNG Shortages

Taiwan is ramping up coal-fired power generation to ensure energy security amid severe disruptions to global liquefied natural gas (LNG) supplies caused by war in the Middle East.^[2][1] The government-owned Taiwan Power Company will procure additional output from the Mailiao plant's Units 1 and 3 starting in May, as announced by the Ministry of Economic Affairs, to counter LNG shortages and stabilize electricity rates battered by soaring gas prices.^[1][2]

The conflict, involving the US, Israel, and Iran, has crippled shipments through the Strait of Hormuz—a critical chokepoint for about a fifth of global oil and LNG trade—and prompted Qatar, the world's No. 2 LNG exporter, to halt deliveries.^[1][2][5] This has doubled Asia spot LNG prices to three-year highs, marking the second major supply shock in four years and removing roughly 28 million tons of supply from the market—equivalent to nearly all projected global growth for 2026.^[2][3] Taiwan, which relies on LNG for about 50 percent of its power, faces acute vulnerability, with secure supplies lasting only through late March despite domestic reserves holding steady for now.^[4][1]

This pivot is not isolated to Taiwan. Across Asia, Japan, South Korea, Bangladesh, India, the Philippines, Vietnam, Thailand, and Indonesia are boosting coal use to cut costs, preserve LNG stocks, and meet demand amid the crisis.^[1][2][5] South Korea has lifted caps on coal power during low-pollution periods, while India ramps up for summer peaks, and Southeast Asian nations prioritize domestic or alternative coal imports as Newcastle coal prices rise 13 percent.^[5] In Europe, nations like Poland and Germany consider increasing coal or reactivating plants.^[1]

The shift underscores broader energy vulnerabilities in import-dependent Asia, where natural gas's share of power generation has declined over the past decade due to renewables growth, yet LNG demand was expected to surge.^[2] Taiwan has stockpiled 2.48 million tons of thermal coal at facilities like Hsinta as a buffer and secured alternative LNG from Australia and the US, but renewables lag at 13.1 percent of electricity—short of the 20 percent target—exacerbating reliance on fossil fuels amid political hurdles on nuclear power.^[3][4]

While the coal increase is framed as temporary to bridge the LNG shortfall until the Hormuz blockade eases, it risks higher emissions, urban smog, and delays in clean energy transitions.^[3][5] Analysts forecast reduced Asian LNG imports by 2026, with prices staying volatile even post-crisis, as most contracts tie to oil prices on a three-month lag.^[2] Governments must now accelerate storage, alternative routes, and renewables to build long-term resilience against such geopolitical shocks.