Taiwan’s Energy Crisis Shows the Cost of Import Dependence
US Crude Oil Inventories Down Again, Losing 52 Million Barrels in 9 Weeks Consumers worldwide are increasingly investing… The issue of energy dependence and its consequences has, in recent months, become a major topic of discussion.
The Hormuz crisis has brought energy security to the political agenda with a vengeance amid fuel price caps, rationing, and warnings of severe shortages.
A lot of countries have been used as examples of either low dependence and therefore insulation against shocks, or high dependence that has resulted in a lot of economic pain.
In the latter category, Taiwan stands out as a particularly noteworthy case: the nation depends on imports for between94%and97%of its energy needs, according to different estimates, with LNG dependence especially heavy.
Taiwan saw a third of its liquefied natural gas imports erased from the market after Iran closed the Strait of Hormuz and struck Qatar’s LNG production facilities.
Natural gas accounts for over 23% of the island’s power generation, with another 36% coming from oil and almost 32% generated from coal.
Solar is a minuscule 2% of the energy mix, with wind and hydropower together generating 3%, according to the Global Taiwan Institute.
In other words, Taiwan is extremely dependent on imported hydrocarbons.
To make matters more complicated, Taiwan is an electronics powerhouse, a leader in chip production, which requires substantial amounts of energy.
Semiconductor heavyweight TSMC alone consumes as much as 8% of Taiwan’s electricity, The Diplomat reported in a recent analytical piece on Taiwan’s energy woes.
Meanwhile, Taiwan is emerging as an artificial intelligence hub as well, and demand for electricity from that segment of the economy is going to grow at a faster pace than the rest, The Diplomat’s authors also noted.
Interestingly, Taiwan was able to weather the Hormuz crisis, thanks to the surge in U.S.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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