Taiwan Frontlines: Why Taiwan needs microgrids to strengthen its energy resilience

Taiwan’s energy security is increasingly inseparable from its national security, as rising electricity demand, geopolitical vulnerabilities and the growing dependence on digital infrastructure expose the limitations of a centralized power system.

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), Cold Electric CEO Phil Chen (陳信生) argued that while nuclear power remains an important component of long-term energy security, distributed energy storage and microgrids could provide Taiwan with a practical way to strengthen its resilience against disruptions.

Speaking with hosts Bonnie Glaser and Jason Hsu (許毓仁), Chen explained why batteries alone cannot resolve Taiwan’s energy challenges, but why combining solar power, storage systems and decentralized electricity networks could make the island considerably harder to disable or coerce.

Energy security is national security

Chen began by emphasizing that electricity is fundamental to both industrial infrastructure and national security.

Asked whether Taiwan should view nuclear power as a national security asset rather than solely through the lens of environmental policy, Chen said “absolutely.”

He added that nuclear energy can provide months or even years of energy security through its fuel-storage capacity. By comparison, he noted that natural gas is considerably more expensive to store, while coal is more polluting than nuclear power.

Chen's argument is particularly relevant to Taiwan, where the semiconductor industry and data centers depend on a stable electricity supply.

As he pointed out, energy is not simply a matter of meeting everyday consumption needs; it underpins the technological infrastructure on which modern industries and national security depend.

Batteries: Managing electricity across time

Drawing on his professional experience in the battery industry, Chen cautioned against treating batteries as an independent energy source. They do not produce new energy; rather, their value lies in storing energy and releasing it when demand requires.

He described large-scale battery systems as a kind of “time machine” that does “time shifting” for electricity.

When paired with solar generation, they can store surplus energy during daylight hours and discharge it during evening peak demand, improving the utilization of existing power infrastructure.

Chen estimated that this time-shifting capability could address approximately 20% to 35–40% of the broader energy challenge without generating additional electricity.

He also highlighted the different time scales involved in energy security. Semiconductor fabrication plants and systems used to train large AI models need protection against power interruptions lasting milliseconds or seconds, while hospitals, schools and communications infrastructure may need backup power lasting days.

Grid-level storage, meanwhile, can help balance supply and demand over several hours.

The implication is that battery deployment should be designed around different operational requirements rather than treated as a single, uniform solution.

Microgrids and the strength of decentralization

Chen identified microgrids as another essential component of Taiwan's energy resilience.

Unlike the conventional centralized electricity network, a microgrid combines local generation, storage and power management to maintain electricity supply independently when disconnected from the main grid.

He cited a recently activated pilot project at the Beimen District Office in Tainan, which combines solar panels, a generator and battery storage to create a system capable of operating independently of the main grid.

During severe weather or other emergencies, such facilities could serve as local refuges, maintaining electricity and communications when surrounding infrastructure is disrupted.

His broader proposal is to establish independent microgrids across public schools, universities, hospitals and government institutions. Rather than relying on a handful of large facilities, Taiwan could develop as many as 10,000 smaller systems.

Chen argued that this distributed approach would provide redundancy: even if several microgrids were disabled by cyberattacks, physical attacks or technical failures, thousands of others could continue operating.

A deployable strategy for Taiwan

Another advantage, Chen said, is the relatively short deployment timeline.

Chen estimated that a microgrid for a small site could take approximately two to three weeks to establish, while a school might require around a month. This contrasts with the years needed to construct nuclear power plants.

With sufficient government support and subsidies, he believes Taiwan could accelerate deployment considerably.

For Chen, the objective is not to replace the existing electricity grid, but to complement it with thousands of independent systems capable of sustaining essential services during emergencies.

He added that the “strength in numbers” of 10,000 microgrids would allow some to fail while the others continued operating.

In an environment where energy infrastructure is increasingly intertwined with national security, that distributed resilience could become one of Taiwan's most consequential strategic investments.

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