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Taiwan’s Electricity Shortage: Economic Crisis May Occur

Map of China and Taiwan and power plant.

On August 15th at 5 pm (Taiwan time), 668,000 homes, multiple office buildings, commercial establishments, and city streets experienced sudden darkness because of an electricity shortage. Phone lines also went dead for a few hours as the rapid pace of this highly industrialized city, which supplies technical components to the biggest companies in the world, came to a grinding halt.

Considering the number of factories and industries operating in Taiwan, you’ve got an economic crisis waiting to happen should the electricity shortage continue.

Officials for the Taiwan Power Corporation (TaiPower) stated that six units at the Datan Power Station in Taoyuan, located at the South of Taipei, tripped due to human error. They lost four million kW of power – a loss, so massive Economics Minister Lee Chih-Kung had to resign.

Fortunately, airports, railways, and motorways were unaffected. However, traffic was brought to a standstill in some areas. Additionally, there were reports of people being trapped inside elevators and supermarkets when cellular phone signals failed.

Officials were able to restore electricity in the city after four long hours. The outage affected 17 cities. If Taiwan continues to burn as much power as it currently does, it is on its way to a major power crisis.  According to reports, power consumption rose in Taiwan days before the electricity shortage. The heat index soared to 38 degrees Celsius, which caused people to increase air conditioning usage inside their homes and offices.

Taiwan, the Power Guzzler

Quartz Media reports that Taiwan imports more than 98% of the energy it uses, which is mostly fossil fuel. Taiwan also has three nuclear power plants that source about 6.25% of its power supply.  Considering they are geopolitically isolated, it is unwise for Taiwan to rely on imports this heavily. Taiwan needs to take bold action to avert a crisis.

Electricity Shortage

TaiPower has been reminding the public, since January, that energy supplies are dangerously low. While the power company admitted fault and blamed human error for the massive electricity shortage, it was said that they issued a “red alert” warning before the incident. This was due to the heatwave, causing operating energy reserves to fall to a critical 1%.

Considering the number of factories and industries operating in Taiwan, you’ve got an economic crisis waiting to happen should the electricity shortage continue. The eye-opener here is that Taiwan, much like the rest of the world, has an outdated power infrastructure. They’re not capable – yet – of shifting to renewable energy sources since the state-run power company cannot raise how much they charge the public.

Taiwan’s President Tsai Ing-wen is vehemently against nuclear power and favors renewable energy alternatives. Nuclear isn’t a viable option for Taiwan, as its location makes it prone to earthquakes and natural disasters. The President earlier pledged a 20% increase to renewable energy by the year 2025.

The problem with choosing the renewable energy option is that this will require updating Taiwan’s power grid because it cannot currently accommodate wind and solar energy. Such upgrades would cost Taiwan some serious money, which would either come out of additional taxes or reluctantly increased power prices for the public.

Interestingly, parts of mainland China have been able to secure their footing when it comes to renewable energy. Thousands of wind turbines and solar panels have been installed in remote provinces within the last few years, to reduce urban smog. It has been said that China now has the most significant renewable power capacity in the world.

Taiwan is a separate issue. Unless it does something significant to fix its power system, four-hour of electricity shortage could become a recurring nightmare. Two things can be learned from this: citizens need to reduce the power they consume, and leaders need to consider alternative power sources before electricity shortage crash their economy severely.

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