Key View
- Following the December 2021 referendum results, favourable progress on the Datan Liquified Natural Gas Terminal in Taiwan, China informs our view that gas power sector expansion will carry on as per the government’s plans.
- The Taiwan government’s nuclear power phase-out strategy remains contested on the topic of energy security, though we expect the phase-out to continue as planned, with the result of the referendum in December 2021 against restarting the Lungmen Nuclear Power Plant supporting the government’s view.
- Increasing developments in the offshore wind sector will boost Taiwan’s non-hydropower renewables growth, gradually replacing nuclear capacity and generation.
Following the December 2021 referendum results, favourable progress on the Datan Liquified Natural Gas Terminal in Taiwan, China informs our view that gas power sector expansion will carry on as per the government’s plans. On December 18 2021, the Taiwanese government called for a referendum to vote on four questions. One out of these four questions was on whether to relocate the Datan LNG Terminal, which was planned to be on Taoyuan’s coast, near the Datan Algal Reef. For the 8.1mn voters that cast their votes, the majority voted against relocating the LNG terminal. We highlight that the total number of votes against the terminal’s relocation was about 4.2mn, below the 25% mark of total eligible voters in Taiwan. While a legislative outcome is not required, the result still informs our Oil and Gas team’s view that it will strengthen the current government’s stance to continue with its LNG pivot, as it is an indication of the market’s sentiment. Additionally, in March 2022, Taiwan’s Environmental Protection Agency approved the proposal for the proposal to construct the LNG terminal, prepared by CPC Corporation. With the go-ahead of the Datan LNG Terminal, we expect it to support Taiwan’s expansion of the gas power sector, more specifically the new gas-fired units for Taipower‘s Datan Combined Cycle Power Plant Expansion Project (which the terminal will directly feed LNG into for power generation).
