Taiwan evolves AI data center review amid power grid concerns

Taiwan is enhancing its review process for AI data centers (AIDC) to manage the significant electricity demands driven by the global computing power race. While individual AIDC power consumption is typically between 30 to 50 MW, less than a TSMC fabrication plant, their compact size and rapid deployment in urban areas can overload local power grids. Consequently, Taiwan, like other nations, is shifting from a simple 'power available' approach to a multi-faceted review that includes energy efficiency, site selection, grid load capacity, and industrial impact.

Since September 2023, Taiwan has temporarily halted applications for large AIDCs (over 5 MW) north of Taoyuan, guiding companies to establish facilities in central and southern regions with more abundant power. The Ministry of Economic Affairs anticipates approximately 1.2 GW of AIDC demand by 2035, with an additional 2 to 3 GW reserved. Taipower highlights that the primary challenge is not total consumption but the concentration of power usage, noting that two AI server racks can consume more electricity than two Taipower office buildings.

Taiwan's Energy Administration recently amended related regulations under the Energy Management Act, requiring new and expanded data centers over 5 MW to adopt best available technologies for energy efficiency. Further revisions are proposed to include an 'industrial benefit assessment,' evaluating factors such as investment, economic output, job creation, supply chain contributions, AI ecosystem development, and cybersecurity resilience. This moves the review beyond mere power supply capacity.

Globally, countries are adapting their data center management strategies. Singapore, facing limited land and power, employs total capacity limits and competitive reviews, emphasizing energy efficiency, renewable energy use, and contributions to the digital economy. The US manages data centers based on state and grid conditions, with some regions requiring self-provided power, energy storage, or demand response measures. Japan is reviewing its grid connection system to guide new facilities away from congested metropolitan areas, while China's 'East Data West Computing' policy directs large data centers to western regions with ample renewable energy and land. The international trend is a comprehensive approach balancing grid stability, energy efficiency, and economic benefits.