Taiwan's energy Achilles' heel: Expert warns of two-week gas buffer in a blockade

Taiwan’s global dominance in advanced semiconductor manufacturing has long been regarded as a strategic asset, often described as a “silicon shield” that could deter potential aggression by making the island indispensable to the global economy.

But what happens if the factories that underpin this shield can no longer access the electricity they need to operate?

In the latest episode of Taiwan Frontlines, launched by Taiwan Current News (TCN) in partnership with the German Marshall Fund of the United States (GMF), Phil Chen (陳信生), CEO of the New Taipei-based battery energy storage system manufacturer and AI energy infrastructure company Cold Electric, examines Taiwan’s energy vulnerabilities and warns that its heavy reliance on imported fuel could leave the island dangerously exposed in a blockade scenario.

The silicon shield’s energy Achilles’ heel 

Chen argued that even though the silicon shield is real, its strategic value ultimately depends on a much more fundamental resource: electricity.

Semiconductor fabrication plants, data centers and critical infrastructure all require a stable and uninterrupted power supply. Yet Taiwan’s dependence on imported energy, particularly liquefied natural gas (LNG), presents a significant vulnerability.

Drawing on discussions about military contingency planning and blockade scenarios, Chen estimated that Taiwan has only approximately 11 to 14 days of natural gas reserves, and that it is not “adequately prepared for any type of blockade.”

He said the general international community thinks that Taiwan is in a very critical situation but the Taiwanese people on the ground have lived under that shadow for decades, indicating that they may not feel the same urgency to prepare for contingencies.

In Chen’s assessment, even a limited disruption to maritime energy shipments could therefore place considerable pressure on Taiwan’s electricity system, with potentially serious consequences for its industrial production and broader economy.

Chen also questioned whether Taiwan’s electricity grid is sufficiently resilient to withstand attacks on critical infrastructure.

The loss of several major power plants, he warned, could potentially destabilize the entire grid, further exposing the limitations of relying on a relatively concentrated energy infrastructure.

Coal and nuclear power in the security equation

The discussion also examined whether Taiwan could compensate for disrupted LNG supplies by turning to coal.

While the island maintains substantial coal-fired generation capacity, Chen questioned whether coal reserves would last several months during a blockade.

He acknowledged the importance of coal in the short term, particularly given the difficulties of storing natural gas in large quantities. However, he also mentioned the environmental challenges associated with continued reliance on coal.

Nuclear power, meanwhile, represents a particularly important component of his proposed energy mix. Although politically contentious in Taiwan, Chen argued that nuclear generation makes considerable sense from a technological and national security perspective.

Unlike LNG, which must be continuously transported by sea and stored under specialized conditions, nuclear fuel is highly energy-dense and can be stockpiled for extended periods.

In Chen’s view, this makes nuclear power a potentially valuable source of energy security in an island economy vulnerable to maritime disruptions.

Chen maintained that Taiwan should reconsider its energy mix by combining LNG, coal and nuclear power, while diversifying its natural gas suppliers.

Although he acknowledged that the appropriate technical solutions are relatively straightforward, he said their implementation remains difficult because of political considerations.

Chen’s technology and investment background

Chen brings a combination of technology entrepreneurship, investment experience and energy industry involvement to the discussion.

Before becoming CEO of Cold Electric, he joined HTC in 2007 and worked with the team involved in developing the world's first Android smartphone and later the HTC Vive brand that focuses on virtual reality (VR).

In 2015, Chen joined Hong Kong-based Horizons Ventures as an advisor while becoming a managing partner at Presence Capital, a firm focused on investments in VR and augmented reality (AR) technologies.

He subsequently continued his involvement in technology entrepreneurship and investment, before taking on a leading role in Taiwan's battery manufacturing and energy storage sector.

Today, Cold Electric develops and manufactures its own lithium iron phosphate (LFP) battery cells and integrated battery energy storage systems (BESS), with applications ranging from commercial and industrial facilities to grid-scale storage and microgrid infrastructure, according to the company’s website.

The company also develops battery management and energy management systems to support power reliability, optimize electricity use and improve energy resilience.

Chen not only has a background in technology entrepreneurship and investment, but also sees energy issues from a practical standpoint through his current involvement in battery manufacturing and energy storage solutions.

Security, time and truth

Chen develops his broader argument in an essay published on Sept. 23, 2026, titled Security, Time, and Truth: What Batteries, Fuel, and Price Can and Cannot Do for Taiwan.

In it, he identified three distinct dimensions of energy resilience: security, time and truth, arguing that each requires a different set of solutions.

The first, security, concerns whether Taiwan has sufficient fuel reserves to withstand disruptions to energy imports.

Chen argued that LNG diversification, greater fuel stockpiles and the potential revival of nuclear power are essential to reducing the island's vulnerability to maritime supply disruptions.

The second, time, concerns the ability of the electricity grid to maintain stability and respond to sudden disruptions. Batteries, he explained, cannot generate energy or replace a sustained fuel supply, but they can provide rapid-response electricity, stabilize grid frequency and protect critical facilities against brief power interruptions.

The third, truth, concerns the role of electricity pricing. Drawing on economist Friedrich Hayek's theory of price signals, Chen argued that artificially suppressed electricity prices obscure the actual cost and scarcity of power, weakening incentives for energy efficiency and private investment.

He advocates moving electricity tariffs closer to their actual costs while providing targeted assistance to households that need it.

His central formulation captures the distinction: "Batteries buy time. Fuel and nuclear buy security. Price buys truth." For Chen, Taiwan's energy resilience depends not on any single technology or policy, but on recognizing that these three challenges must be addressed together.

For more in-depth coverage, tune in to Taiwan Frontlines on the NOWNEWS official YouTube channel.