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In 2016, Taiwan set a target for gas-fired generation to reach
50% by 2025 to phase out nuclear and reduce coal-fired power. New
capacity—both gas-fired power and LNG regasification—will
need to be developed, given that the existing gas-fired power fleet
and LNG receiving terminals ran at 63% and 115%, respectively, in
2020.
Gas-fired capacity is on schedule to achieve the 2025 target,
with 18.5 GW operating at the end of 2020 and 7.0 GW of new
capacity under construction. But LNG receiving capacity could be a
bottleneck to bring supply to the new power plants, as greenfield
projects are facing opposition from local environmental groups and
governments.
CPC Corporation (CPC) plans for its 3 MMtpa Taoyuan LNG terminal
to start commercial operation in 2023. Although the terminal
construction is already half completed, local environmental groups
have been challenging the terminal's siting for algal reef
protection. Opposition groups successfully included the terminal
relocation issue for voters to vote on in the referendum originally
scheduled for 28 August 2021 and subsequently delayed to 18
December 2021. In May 2021, Taiwan's Ministry of Economic Affairs
(MOEA) proposed a solution to mitigate the impact on the algal
reef: extending the jetty by 455 m into the sea and eliminating all
additional land reclamation, pushing back the online date to
mid-2025 and increasing costs by 15 billion New Taiwan dollars
(around US$540 million). The alternative of relocating the terminal
could delay the project by 5-10 years.
The jetty part of Taiwan Power Company's (TaiPower's) Taichung
LNG terminal is included in the Taichung Port's outer harbor area
expansion, which is facing opposition owing to the potential impact
on the nearby white dolphin habitat. In addition, the Taichung City
Government has not issued the construction permit for the onshore
facilities and related gas-fired power units, demanding that
TaiPower dismantle its two 550 MW coal-fired units two years after
each CCGT unit comes online. TaiPower, on the other hand, only
agrees to mothball the coal units to retain them as emergency
backup. As a result of the delayed construction, TaiPower has
pushed back the online date of the Taichung LNG terminal and
gas-fired units from 2024 originally to 2025.
Assuming that the Taichung LNG terminal Phase 2 starts operation
in 2022 and the Taoyuan LNG and TaiPower's Taichung LNG terminals
in 2025, Taiwan can still attain the 2025 target. Any slippage in
the commercial start date for the latter two terminals will
jeopardize the achievement of the target. Furthermore, the terminal
development delay may create a gas supply constraint during
2023-24, with potential impacts on power supply security.
