34 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 43 | 2025 is building an advanced nuclear reactor in Wyoming, reflective of the positive outlook for nuclear energy (McDermott, 2024). South Korea too has reversed its policy to phase out nuclear power and broke ground on two new reactors in 2024 (World Nuclear News, 2024). These nuclear buildouts reflect the favorable economics of nuclear energy and a global nuclear renaissance. Nuclear power is cost-competitive with other forms of electricity generation, such as coal and natural gas, and operating costs for nuclear power are less than for intermittent renewables (World Nuclear Association, 2023). The greatest monetary drawback for nuclear power is the capital needed for nuclear power plants. Yet Taiwan has five nuclear reactors that are not in use, which will moderate the new capital required for integrating nuclear electricity into the energy mix. Another policy ripe for reform involves caps on foreign ownership. Foreign investment is limited to 50% in nuclear power plants, with the remaining share owned by Taipower (Hilton, 2024). However, Taipower’s debt is growing. Private investors hesitate to finance nuclear proposals if a partner is broke and in debt. Permitting nuclear projects with greater foreign ownership shares would encourage private engagement (Hilton, 2024). In 2017, Taiwan’s total operational nuclear capacity was 5052 million watts of electric capacity but fell to only 938 million watts of electric capacity in 2024 (World Nuclear Association, 2024a). The shutting down of five of the six existing nuclear reactors resulted in slower economic growth, higher pollution and carbon dioxide emissions, and increased electricity prices (World Nuclear Association, 2023). Because lack of domestic ability to handle nuclear waste was a principal reason for shutting down reactors, Taiwan now has reprocessing procedures to export nuclear waste and is considering repurposing used fuel pools (World Nuclear Association, 2024a). Overreliance on either nuclear or wind sources presents vulnerabilities: Offshore wind power requires exposed undersea cables to carry the electricity to the island, while nuclear power involves nontrivial probabilities of earthquake damage (Hilton, 2024). Both these solutions include risks, will take significant time to implement, and expose Taiwan to more Chinese interest. Oil supply diversification provides a less-than-ideal solution too. A complete phase-out of oil is not feasible due to the dependencies of the transportation sector and requirements for nonenergy purposes. A three-pronged approach provides a solution: encouraging offshore wind development, reestablishing a nuclear energy program, and diversifying nonrenewable imports. This balanced approach distributes risk while capitalizing on the benefits of each solution. Conclusion To counter Chinese influence and preserve independence, Taiwan must take a comprehensive look at its energy security. Increasing its domestically produced clean energy along with building out a greener energy grid for domestic firms can help maintain export competitiveness. Revamping regulatory and financial approaches to wind energy projects would encourage investment and accelerate wind energy. Taiwan should relax capacity limits, reduce localization requirements, minimize local authority, and offer financial incentives for companies to fund offshore wind. Driven by its status as an economic and technological hub, Taiwan can attract international interest in developing the necessary offshore wind infrastructure. Taiwan must reevaluate its stance on nuclear energy to ensure meeting growing industrial demand. The implications of a complete nuclear phase-out must be thoroughly assessed, as meeting both growing demand and renewable energy goals would be difficult without nuclear power. Taiwan must capitalize on the inexpensive and abundant source of clean power of nuclear energy, especially considering the existing infrastructure that would limit capital investment. Taiwan should postpone its nuclear phase-out and reintegrate its existing nuclear plants. In parallel, Taiwan must manage its nonrenewable imports through expanded oil trade agreements with Canada and other countries to ensure the island is not overly reliant on countries easily swayed by China and OPEC. Taiwan should also seek to import its natural gas from a greater number of countries so that no one country or region has too great an effect on supply. These import diversifications will, aside from a blockade, temper the impact of disruptions and international interests, including but not limited to China’s One China agenda. This three-pronged approach will allow Taiwan to manage the vulnerability to China that its high energy import creates while also providing domestic firms with clean energy. Increasing domestically produced renewable and nuclear energy will reduce Taiwan’s geopolitical vulnerabilities and strengthen its economic position. Taiwan does not need to produce 100% of its energy via domestic renewables to enhance energy security. If Taiwan can propagate renewable energy at the rate of its increase in consumption, it can begin to stabilize its energy sector and diminish risks from its high energy imports.
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