Powering Taiwan’s AI Future: Navigating Grid Challenges with Smarter Energy Solutionste

Taiwan is entering a new phase of technological growth, driven by the rapid rise of AI data centers. These facilities are crucial for cloud services, generative AI, and big data processing, but their immense power demands challenge Taiwan’s electric grid and sustainability goals.

Electricity use from AI-related activities is projected to grow nearly tenfold—from 240 MW in 2023 to over 2,200 MW by 2028—driven by tech giants like AWS, Nvidia, and Foxconn. As Northern Taiwan faces grid constraints, new AI hubs are shifting toward the south where renewable energy is more accessible.

To meet these demands, the government launched a NT$564.5 billion (US$18 billion) 10-year power grid resilience plan led by Taipower, involving substation upgrades, transmission reinforcements, and smart grid adoption.

The nuclear phase-out by 2025 adds further pressure. Without nuclear power, Taiwan must increasingly rely on renewables, LNG, and energy storage, which is complicated by land and infrastructure limitations. Strong public-private collaboration and rapid permitting are essential.

Taiwan is integrating solar and geothermal energy. For example, Google’s 100 MW solar plant and 10 MW geothermal agreement support its operations. However, the intermittent nature of these sources requires enhanced energy storage and grid upgrades to ensure stability.

Modernizing substations and building large-scale battery energy storage systems (ESS) are key to improving flexibility and reliability—storing excess power during off-peak and releasing it when needed.

New data centers are expected to achieve PUE (Power Usage Effectiveness) below 1.2, relying on efficient cooling, smart energy management, and optimized power distribution to reduce strain on the grid and cut costs.

To enhance resilience, many centers adopt on-site generation such as solar, geothermal, and fuel cells, minimizing transmission loss and improving energy independence. Temporarily, gas-powered gensets are used as backup, but will phase out as renewables scale.

A holistic energy strategy—combining renewables, storage, and high-reliability backup—supports Taiwan’s goals of low-carbon growth, grid stability, and AI innovation leadership. Success depends on collaboration among government, energy providers, and tech players. Companies like ABB contribute vital technologies such as high-efficiency UPS, PCS, and ESS.