Taiwan AI growth highlights need for energy storage, renewables

The AI boom is putting Taiwan in a particular bind when it comes to energy: more clean electricity is needed to run the data centers but also to run the industries producing the technology parts used in the data centers themselves. 

The answer for many companies is to focus on more renewable energy, particularly on-site and coupled with battery storage, though the investments needed are daunting.

The International Energy Agency estimates that global data center energy consumption could more than double from about 415 TWh in 2024 to about 945 TWh by 2030. In Taiwan, data center energy use is forecast to grow eightfold by 2030.

AI is meanwhile driving electricity demand further upstream. Taiwan manufactures most of the world’s advanced chips and many of the servers powering data centers, but its renewable energy development is struggling to keep pace. According to a recent white paper by Earth & Life Symbio, renewable electricity available for companies to contract in Taiwan could fall about 22.2 TWh short of their needs by 2030.

To illustrate the scale of the issue, the chipmaking giant Taiwan Semiconductor Manufacturing Company (TSMC) could account for nearly 24% of Taiwan’s electricity consumption by 2030, up from about 8%, according to S&P Global. The company aims to power 85% of its Taiwan operations with renewable electricity by the same year.

Renewables supplied about 15% of Taiwan’s electricity in early 2026, below the government’s target of 20%. Clean energy’s role in meeting the growing electricity needs of the AI and semiconductor industries is highlighted regularly by executives. Most recently, the Energy Taiwan 2026 conference, held from Oct. 14 to 16, saw a particular focus on battery storage, uninterruptible power supplies and on-site generation technologies.

Data centers look to storage as grid delays mount

Limited grid capacity and lengthy connection timelines are making it harder for new data centers to secure electricity, according to Jessie Tsai, senior energy analyst at Taipei-based media and consultancy RECCESSARY. Her model estimates that facilities requiring upstream substation expansion could wait five years and three months for full power supply, compared with three years and three months where sufficient grid capacity already exists.

The delays are prompting developers to explore on-site power solutions. Lin Sheng-tse, chairman of energy storage provider Seetel, said data centers could combine on-site generation with six to eight hours of battery storage before securing additional grid capacity. Despite volatile gas prices, gas-fired generation is still expected to complement solar energy and battery storage as a source of baseload power in the near term, Tsai said.

Making storage more economically attractive could also help ease pressure on the grid. Chen Cheng-i, professor of electrical engineering at National Central University, said allowing customer-side batteries to provide grid services and trade electricity could improve returns beyond backup use. Tsai also called for greater transparency around grid capacity and incentives for data centers that reduce grid pressure through storage or self-generation.

Regional markets rethink data center power supply

Other Asian data center markets are also adjusting their electricity policies to accommodate rising demand while expanding access to renewable energy.

Malaysia, one of Southeast Asia’s fastest-growing data center hubs, is seeking to make renewable procurement more accessible to corporate buyers. In September, the government announced an Acceleration Package under the Corporate Renewable Energy Supply Scheme (CRESS), cutting grid access charges for firm renewable power by 30%. The package aims to make corporate renewable procurement more competitive and provide greater cost certainty through contracts of at least 10 years, with projects required to begin commercial operations by the end of 2028.

Since CRESS launched in 2024, 11 developers and 8 corporate buyers have registered projects with a combined capacity of 3,148 MW.

Singapore-headquartered hyperscale data infrastructure builder Bridge Data Centres became the first data center operator to sign a CRESS agreement with Malaysia’s national electricity utility, Tenaga Nasional Berhad (TNB). Solar electricity delivered through the grid now supplies about half of the electricity used at its Malaysian sites.

Thailand is also introducing measures to encourage data center operators to procure cleaner electricity. On Oct. 1, 2026, its Data Centre Policy Committee approved a separate legal category for data centers, alongside two electricity tariff tiers offering lower rates to operators sourcing clean power through direct power purchase agreements (PPAs) or renewable energy.

Both Malaysia and Thailand are introducing financial incentives to make renewable electricity more attractive to data center operators. For Taiwan, where AI-related demand is adding to already substantial electricity consumption from semiconductor manufacturing, the challenge is ensuring that renewable energy development and grid infrastructure can support continued industrial growth.