The government needs a concrete plan to move its energy transition policy forward as it struggles to fulfill its first initiatives to make renewable energy a significant contributor to the country’s energy mix by next year. Meanwhile, it is facing new challenges to the plan amid rapidly growing power consumption from the semiconductor industry, a pillar of Taiwan’s economy, and the burgeoning artificial intelligence (AI) sector.
Under President William Lai’s (賴清德) “Energy Transition 2.0” policy, the government aims to boost Taiwan Power Co’s (Taipower) ability to provide stable electricity by 2030 as power usage surges to meet the demand of AI data centers and more sophisticated semiconductor manufacturing equipment over the next few years.
The AI sector alone is expected to consume 10 times more power over the next five years from 24 megawatts to up to 2.24 gigwatts, an estimate from the National Climate Change Committee showed. Set up in August, the cross-industry, cross-party committee is responsible for setting national strategies to reach the government’s net zero emissions goal by 2050.
To support the energy transition policy, the Cabinet last month unveiled an ambitious NT$116.1 billion (US$3.61 billion) budget plan, a 21.6 percent increase from this year’s NT$96.4 billion. A major portion of the budget, about NT$33.4 billion, is earmarked for modernizing Taipower’s electricity grid and building energy storage systems for solar and wind power. That update is needed, as the aging grid has failed to cope with disasters such as earthquakes and typhoons, resulting in recurrent power outages.
Government funding for wind power and solar installations is about NT$33.2 billion, primarily to be used for offshore wind turbines. Despite the large sum, it is unclear how such a fund would be spent and what target it aims to hit. The government also plans to spend about NT$5 billion on exploring cutting-edge green energy technologies — such as hydrogen, geothermal and micro-hydropower systems.
With the record-high energy transition budget plan, the government aims to push its net zero transition policy to the next level to reach its 2050 goal. However, the nation has not hit its target for the first stage of the policy, to substitute 20 percent of gray power with green energy by next year and to retire nuclear power, set by former president Tsai Ing-wen (蔡英文) eight years ago. Due to severe delays in solar energy installations, the government has postponed its schedule to boost renewable energy production to make up 20 percent of the nation’s total power production by October 2026. By that time, the installation of solar energy should reach the government’s 20-gigawatt target, while power energy deployment should reach 6.5 gigawatts.
Solar installations this year are expected to have been set back about 37 percent to 1.7 gigawatts, compared with 2.7 gigawatts installed last year, because the government did not set an annual installation target as it did previously. At the local level, protests against the installation of solar arrays have caused the number of solar projects to plummet this year. Slow-moving local governments have led to delays in issuing grants for new solar projects, stoking fears that the nation’s energy transition might face further delays.
The government has only laid out a blueprint to tackle climate change, setting up a committee and making an ambitious budget, which has been shelved by the legislature along with the rest of the government budgets. Without executing its plans, it would be difficult for the government to fulfill the nation’s energy transition policy.
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