Taiwan Faces Power Crisis as AI Boom Raises Electricity Demand

Taiwan's electricity demand is projected to grow at 2.5 times its historical average over the next five years, driven by the global artificial intelligence boom and the island's energy-intensive semiconductor industry. The staggering forecast is raising critical questions about how President Lai Ching-te's (賴清德) administration will meet the demand without revising its controversial nuclear-free policy.

According to a Storm Media report citing internal remarks by Taipower Chairman Tseng Wen-sheng (曾文生), power demand growth will surge well beyond past metrics. Over the past decade, Taiwan added an average of roughly 400 megawatts of installed capacity each year.

"However, our current calculations show that over the next five years, we need to add an average of 1 gigawatt annually," Tseng reportedly told Taipower colleagues, describing the projected 1,000-megawatt annual increase as an "extremely alarming number." （Related： Exclusive | Soprano Nadine Sierra: ‘It’s Sort of an Olympian Thing We Do’ ｜ Latest ）

The root of this impending power crunch is twofold. Globally, the AI boom has triggered power supply warnings. Data from last year indicates that ChatGPT processes approximately 1 billion queries daily, consuming 2.9 million kilowatt-hours—equivalent to the daily usage of 100,000 American households. A single AI query consumes 25 times more electricity than a standard internet search. By the end of this year, global data centers are expected to account for 4% of total worldwide electricity usage, matching the power consumption of Japan.

Locally, Taiwan faces the additional strain of its primary economic engine: semiconductor manufacturing. As Taiwan Semiconductor Manufacturing Co. (TSMC) advances toward cutting-edge nodes, its power consumption has skyrocketed. TSMC's share of Taiwan's national power consumption grew from 6% in 2020 to 9% in 2024. It is projected to reach 10% in 2025 and exceed 12% by 2030.

Despite the predicted surge, the ruling Democratic Progressive Party (DPP) remains committed to a nuclear phase-out. Existing nuclear plants are being systematically shut down and decommissioned. Concurrently, the expansion of green energy faces significant hurdles, including a lack of land for large-scale renewable deployment, the inherent intermittency of wind and solar power, and slower-than-expected development timelines.

To bridge the gap, the government is relying almost entirely on increased fossil fuel generation. In his internal remarks, Tseng noted that four large generating units will begin trial operations this year. （Related： Exclusive | Soprano Nadine Sierra: ‘It’s Sort of an Olympian Thing We Do’ ｜ Latest ）

"We will have 5.2 gigawatts of units simultaneously in trial operation," Tseng said, adding that the scale is unprecedented in Taipower's history. These massive capacity additions are almost exclusively powered by fossil fuels.

Critics warn that leaning on natural gas and coal will deteriorate Taiwan's carbon emissions and air quality. Statistical data show that average carbon emissions per kilowatt-hour are 48 grams for solar, 11 for wind, 490 for natural gas, and 820 for coal. By comparison, nuclear power emits just 12 grams per kilowatt-hour while operating at a fraction of the cost and delivering superior baseload stability.

While the Lai administration continues to expand fossil fuel capacity, top officials have occasionally signaled slight shifts in tone regarding nuclear energy. Lai and Premier Cho Jung-tai (卓榮泰) have recently suggested they do not rule out the use of "new nuclear technologies" if specific safety and waste conditions are met. Tseng also mentioned that assessments regarding nuclear systems are proceeding.

However, energy analysts and opposition figures argue these statements are political deflections. The Ministry of Economic Affairs is reportedly assessing the possibility of restarting nuclear reactors by 2028, but critics point out that Taiwan's nuclear plants operated safely for 40 years and were only shuttered to comply with the DPP's political platform.

Without a formal abandonment of the nuclear-free homeland policy, technical assessments remain practically moot. Reversing course to restart plants like Nuclear Plant No. 3 or the sealed Nuclear Plant No. 4 would require a massive political pivot.

As the AI and semiconductor sectors continue to multiply Taiwan's energy needs, pressure is mounting on the Lai administration to reconcile its ambitious economic goals with the physical realities of its grid. （Related： Exclusive | Soprano Nadine Sierra: ‘It’s Sort of an Olympian Thing We Do’ ｜ Latest ）