The Ministry of Economic Affairs released the 2024 National Power Resource Supply and Demand Report on September 26, projecting an average annual growth rate of approximately 1.7% in national electricity demand over the next decade (2025 to 2034). However, experts warn that the rise of AI, high-performance computing, and semiconductor manufacturing could significantly alter Taiwan’s electricity consumption structure. There are concerns that the government may be underestimating the impact of AI on power consumption, and the report notably fails to provide specific estimates, potentially obscuring risks to the power grid.
The report indicates that Taiwan’s electricity consumption reached 283.85 billion kWh in 2024, reflecting a 2.92% year-on-year increase. Industrial electricity usage surged by 2.71%, driven by the semiconductor and high-performance computing sectors, while the service and residential sectors saw increases of 3.55% and 3.8%, respectively. Experts suggest that if AI servers, data centers, and cooling equipment are fully operational, the current power grid may struggle to accommodate such a substantial load.
Despite the government’s commitment to expanding renewable energy production, the report lacks predictions regarding the electricity consumption of AI and data centers. Chao Chia-Wei, an associate professor at National Taiwan University specializing in climate change and sustainable development, emphasized that the Ministry of Economic Affairs’ estimate of “eightfold growth over five years” implies that annual electricity consumption in data centers must exceed 50%, which is more than three times the global average growth of 15% projected by the U.S. Electric Power Research Institute and Goldman Sachs. He stated, “If we develop at this growth rate, Taiwan’s existing power grid and gas supply simply cannot sustain it.”
Chao pointed out that while the report emphasizes “deep energy conservation” and “demand management,” it does not reveal the energy-saving contributions of various measures, making it impossible for outsiders to assess whether these efforts can curb electricity growth back to 1.7%. Another energy expert noted that the report’s “information disclosure is significantly lower than in previous years,” as it omits a complete timeline for power development and yearly renewable energy share targets, and fails to introduce resilience testing for extreme weather and supply disruptions.
Experts recommend that the government reevaluate the report’s framework to include simulations of AI electricity consumption scenarios, sensitivity analyses, and decentralized energy planning, while also updating progress on microgrids and local power recovery capabilities. Given the surge in AI computing density and data center energy consumption, continuing to use “supply-demand balance” as the sole indicator may underestimate structural risks. Taiwan’s energy transition could face unprecedented pressures in the future.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/ai-power-consumption-emerges-as-major-challenge-for-taiwans-future-electricity-supply-experts-warn/
