Is Taiwan ready for the energy demands of the AI era?

As Taiwan's digital economy accelerates and geopolitical risks loom, the island is confronting an intensifying test: How to sustain reliable and sustainable electricity while powering its high AI and semiconductor energy demand.

Taiwan's electricity system and relatively low electricity price have become the locus of one of its most consequential policy debates as lawmakers and former ministers called into question Taiwan's energy stability amid the surge in electricity demand.

Rising demand in the digital age

In a press release updated in late October, Taiwan's Ministry of Economic Affairs (MOEA) projected that national electricity demand will grow by an average of 1.7 percent annually through 2034, driven by the rapid development of artificial intelligence (AI), including data centers, the expansion of the energy-intensive semiconductor sector, and the reciprocal tariffs imposed by the US. The Taiwan Institute of Economic Research (TIER) recently revised Taiwan's projected economic growth upward and attributed it to the demand for AI infrastructure and data centers. 


This transition is unfolding amid compounding energy pressures seen around the world. Bloomberg reported that in Santa Clara, California, the home of Nvidia's headquarters, two of the world's largest data center developers have launched new projects that may sit idle for years, as local utilities are not yet prepared to deliver the necessary power supply.

Goldman Sachs estimated that global data center demand would surge by more than 80 percent between 2023 and 2026, representing a compound annual growth rate of 17.7 percent. The company estimated that electricity consumption would soar, with over 60 percent of the increase driven by AI computing.

By 2030, AI data centers alone may require 20 to 25 gigawatts of electricity, roughly equivalent to the capacity of 20 large nuclear power plants, per anue.

Microsoft CEO Satya Nadella stated, on a recent podcast with OpenAI chief Sam Altman, that the biggest issue now is power and the ability to get the builds done fast enough, close to power, NDTV reported. Otherwise, there will be chips sitting in inventory, he added.

Bill Dougherty, Executive Vice President of the Data Center Solutions at US real estate firm CBRE Group, recently said demand has never been so high; we are indeed facing a power supply problem, Liberty Times reported

Chen Shih-Hau (陳詩豪) from Taiwan's Chung-Hua Institution for Economic Research (CIER) pointed out that if foreign companies wanted to build data centers in Taiwan, reducing the cost concerning power would be beneficial, as electricity itself has been the highest cost for such businesses.

In its 2024 National Electricity Supply and Demand Report released in September 2025, the MOEA said that regarding energy transition, it would continue promoting renewable energy sources such as solar photovoltaics, offshore wind, geothermal, and small hydropower to achieve the targets of 20% renewables by November 2026 and 30% by 2030.  

To bridge intermittency, Taiwan will expand gas-fired capacity by a net positive 12.2 gigawatts over the next decade, the MOEA said. This energy would serve as the main source of nighttime power, and hydropower and energy storage will be developed as ancillary support, it added.

However, as Taipei-based news outlet Domino Theory suggested, Taiwan's reliance on imported natural gas could be a concern during a conflict with China.

Taiwan's energy stability is called into question

On November 4, lawmaker Chang Chih-lun (張智倫) from Taiwan's opposition Kuomintang party (KMT) raised the question of energy stability during a legislative interpellation. He stated that as Taiwan looks to accelerate its adoption of AI, scholars and experts have voiced concern that the island may lack the vast computing power and stable energy to supply such soaring demands.


He asked MOEA whether Taiwan's electricity capacity can keep pace with its digital ambitions, and raised the issue of reactivating the Maanshan Nuclear Power Plant was previously shut down in May 2025.

KMT Legislator Lee Yen-hsiu (李彥秀) questioned how fast the Maanshan Nuclear Power Plant could be reactivated if deemed necessary. MOEA Minister Kung Ming-hsin (龔明鑫) responded that, due to having to cooperate with and matching the schedule with foreign nuclear specialists, the speed does not entirely depend on MOEA.

Professor Liang Chi-yuan (梁啟源) at Taiwan's Graduate College of Sustainability and Green Energy of the National Central University said that people had to pay attention to whether renewable energy sources are resilient enough. It is understandable why the industry may be worried, as nuclear energy has been excluded from Taiwan's current energy plan, he added. 

Former Minister Without Portfolio, Chang Ching-sen (張景森) also wrote in early November on his social media that Taiwan needs emergency power backup and that the island's reserves of liquid natural gas could only last for 10 to 11 days, under a blockade on Taiwan or a global transportation disruption affecting Taiwan's energy import.

President Lai Ching-te (賴清德) said at a public forum on Nov. 5 that the government plans to inject NT$900 billion (approximately US$29 billion) by 2030 to accelerate initiatives in renewable energy, energy storage, and efficiency. The program aims to attract both domestic and foreign green capital, advancing Taiwan's energy transition while fostering industrial upgrading and transformation, he added.

Tseng Wen-sheng (曾文生), chair of Taiwan's state-owned electricity group, stated at the Global Views Leaders Forum, that supply-demand synergy and power matching are key factors as the rise of AI data centers has led to more intensive electricity demand.

He told the audience at the forum that since Taipower's Grid Resilience Strengthening Construction Plan took place in 2022, Taipower has been generating power with a particular focus on making the process more effective and safer.