AI becomes biggest challenge in Taiwan's power supply: MOEA


Minister of Economic Affairs Kuo Chih-hui talks about Taiwan’s industry and energy policies at his first press conference on May 30. (Photo: Carol Chen)

Minister of Economic Affairs Kuo Chih-hui (郭智輝) reviewed Taiwan’s current power supply as soon as he assumed office, assuring that there would be sufficient power supply by 2030. However, he noted that the rising power demand of generative AI is a major variable.

“To make Taiwan the Silicon Valley of Asia, we need a stable power supply, reasonable electricity prices, and adequate green electricity for companies,” said Kuo.

AI is expected to boom from 2025 to 2028, with many servers and data centers set to be built from next year. In response to the potential surge in power demand brought about by AI, Kuo has, for the first time, suggested that the Third Nuclear Power Plant could serve as backup power for AI needs.

MOEA guarantees sufficient power supply by 2030 to anchor semiconductor industry 

Since the availability of electricity has always been a major concern for the industry and people's livelihood, Kuo, with industry experience, prioritized reviewing power supply in his first two weeks in office.

He said that there will be two peaks of electricity demand this year: in July due to the summer season and in October for power dispatch during coal reduction. However, the Taiwan Power Company (Taipower) is prepared. Retired generating units have been replaced with new ones, and there will be no shortage of electricity.

In response to peak demand for green electricity in the supply chain by 2030, the MOEA has guaranteed a supply of 90 billion kWh, exceeding demand of 40.8 billion kWh, enabling companies, including small and medium-sized enterprises (SMEs), to purchase renewable energy.

Kuo stressed the importance of a stable power supply, noting that a shortage of electricity could hinder the development of Taiwan's AI and semiconductor industries.
The current power supply can accommodate future demand from semiconductor plants and data centers based on current construction applications, he said.

Third Nuclear Power Plant may extend service to meet AI demand

Next week marks the annual tech event COMPUTEX Taipei, where Taiwan will showcase its strength in the semiconductor industry, which gives it a crucial role in the international supply chain. Kuo is optimistic that AI chips and servers will keep Taiwan thriving for another 50 years, continuing to lead on the global stage.

However, AI-driven power demand, which is expected to surge from 2025 to 2028, has reignited the debate on whether to extend the service life of the Third Nuclear Power Plant.

According to the law, Unit 1 and 2 of the nuclear plant, which generate 7% of Taiwan's electricity, will be shut down in July this year and May next year, respectively.

While the shutdown will not affect power supply this year and next, the Third Nuclear Power Plant could serve as a backup power source to address growing AI electricity demand between 2027 and 2029, as it takes two to three years to reactivate a nuclear plant, said Kuo.

The Third Nuclear Power Plant (including Unit 1 and 2) accounts for 7% of Taiwan's electricity generation. (Photo: Taiwan Power Company)

Semiconductors, data centers to increase electricity demand by 20M kWh

The estimated growth in power demand over the next five to ten years has been raised from 2.7% to 3% due to AI demand, according to Deputy Minister Lin Chuan-neng (林全能) of Economic Affairs.

An official also revealed that AI demand has been included in the assessment of power demand, with changes being monitored.

Electricity demand of the semiconductor industry and data centers is expected to increase by 10 to 20 million kWh, well below Taipower's annual generation capacity of 300 billion kWh. In addition, since most of power-hungry AI training models are in the U.S., the increase in power demand may not be as large as expected. However, it remains unknown whether AI will see significant growth again in the next three to five years.

In response to unexpected increases in electricity demand, the MOEA plans to increase energy storage installations and promote energy conservation to fill the supply gap, while introducing different pricing tiers for major electricity consumers to reflect electricity costs.

Known as “the most semiconductor-savvy minister ever” and former chairman of Topco Scientific, Kuo is confident about the stability of future power supply. When it comes to potential political wrangling over the extension of nuclear plant service life, he assured that inspections would be carried out for at least three years before the plant was put back into operation, emphasizing that safety must not be compromised.

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