Chip giant Taiwan’s energy security on the line with LNG referendum

Author of the article: TAOYUAN — Taiwanese voters will decide this Saturday on a new LNG terminal considered key for the chipmaking powerhouse to secure its energy supply but facing attacks from conservationists – and from an opposition party eager to wrong-foot the government. The referendum, which seeks to relocate the project away from an…
Chip giant Taiwan’s energy security on the line with LNG referendum

Author of the article:

TAOYUAN — Taiwanese voters will decide this Saturday on a new LNG terminal considered key for the chipmaking powerhouse to secure its energy supply but facing attacks from conservationists – and from an opposition party eager to wrong-foot the government.

The referendum, which seeks to relocate the project away from an ancient algal reef and would likely delay it for years, has a reasonable chance of passing, some polls have shown.

At stake for the government is not just averting future power cuts, like those in May during a drought and heat wave, but an environmental policy that moves away from polluting coal and nuclear power, towards greener and renewable alternatives.

“If we can’t build this third LNG terminal, we will really have an electricity supply problem,” Economy Minister Wang Mei-hua told reporters last month.

The project would make the Datan Power Plant the island’s biggest while advancing the government’s goal of boosting LNG to produce half its power by 2025.

It would also help to supply Taiwan’s semiconductor plants, thrust into the spotlight by a global chip shortage that has crimped supplies of cars and electronics. They require vast amounts of energy and water.

In 2019, Taiwan Semiconductor Manufacturing Co Ltd’s electricity consumption was about 5% of Taiwan’s total, according to a Bernstein report.

Mark Li, a Bernstein semiconductor analyst, said TSMC, the world’s largest contract chipmaker and a major Apple Inc supplier, has for years worked with the government to ensure that Taiwan’s power supply will increase as the company expands.

“They’ve been talking to the government to make sure there wouldn’t be long-term outages that become a real issue for the company,” Li said.

When Taiwan faced its worst drought in more than half a century this year, the government prioritized water for households and industry over irrigation, while companies ordered in truckloads of water and set up generators for power cuts.

‘SACRED MOUNTAIN’

TSMC, known widely in Taiwan as a “sacred mountain protecting the nation,” is wary of being drawn into the island’s polarized politics and has stayed out of the referendum debate.

But one chip executive, who spoke on condition of anonymity because he is not authorized to talk to the media, said the industry has long worried about Taiwan’s limitations on land, water and electricity.

“But of all those, it’s electricity that is the top concern, especially a stable power supply,” he said.

The Taiwan Semiconductor Industry Association and TSMC both declined to comment on the referendum.

The referendum petition was initiated by an environmental activist and garnered more than 700,000 signatures on the back of an endorsement from the main opposition party, the Kuomintang.

The party, eyeing local elections next year when it hopes to stage a political comeback, is pushing instead for more nuclear power as the green solution to Taiwan’s energy woes, and supports a separate referendum on restarting a mothballed nuclear power plant opposed by the government.

The Kuomintang has framed the four upcoming referendums as a vote of no confidence in the ruling party.

President Tsai Ing-wen signaled the vote’s importance to her government during a visit last month to the Datan Algal Reef, which stretches along the northwest coastline next to Taoyuan city.

“Taiwan has world-class, high-end manufacturing industries,” Tsai told reporters. “For the country’s safety and for economic development, we need to provide reliable and stable electricity.”

Chou Kuei-tien, a National Taiwan University professor, added that Taiwan urgently needs to speed up its move to cleaner energy sources.

“Taiwan already lags behind other countries in the energy transition,” he said.

None of this cuts much ice with activist Pan Chong-cheng, who led the campaign for the vote to move the terminal and protect the more than 7,000-year-old reef.

“This is the world’s shared property, this is our next generation’s property,” said Pan, a retired teacher and the convener of the Rescue Datan’s Algal Reefs Alliance.

“With so many people wanting to preserve it, if we can’t preserve it then this country would only seem to have economic development and money before its eyes.”

(Reporting by Sarah Wu; Additional reporting by Ben Blanchard; Editing by Edmund Klamann)

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
Top Economic Events to Feb. 22
Read More

Top Economic Events to Feb. 22

Author of the article: Publishing date: Dec 09, 2022  •  14 hours ago  •  6 minute read Join the conversation Dec 10 (Reuters) – For other diaries, please see: Financial Post Top Stories Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc. By clicking on the sign…
As Ukraine forces counter near Kyiv, Russia scales back goals
Read More

As Ukraine forces counter near Kyiv, Russia scales back goals

Author of the article: Reuters Gleb Garanich and Natalia Zinets MARIUPOL/LVIV — Ukrainian President Volodymyr Zelenskiy pushed for further talks with Russia as Moscow signaled it was scaling back its ambitions to focus on territory claimed by Russian-backed separatists in the east after attacks elsewhere stalled. In an announcement on Friday appearing to indicate more…
UAE supermarket chain Lulu hires Moelis for IPO – sources
Read More

UAE supermarket chain Lulu hires Moelis for IPO – sources

Author of the article: Reuters Hadeel Al Sayegh and Yousef Saba DUBAI — Abu Dhabi-headquartered supermarket chain Lulu Group International is planning an initial public offering and has hired investment bank Moelis & Co to advise it, two sources familiar with the matter said. Lulu, one of the largest supermarket chains in the Gulf region…