Power Report Raises Demand Forecast; Scholar Urges Shift to Energy Saving Performance Subsidies

TAIPEI, June 23 (CNA) The latest national power supply and demand report has significantly revised upward future electricity demand, considering the expansion of semiconductor plants and increased power consumption by AI data centers. Scholars suggest that subsidy policies should shift to "energy saving performance subsidies," and the use of natural gas should include "low-carbon transition conditions."

The Bureau of Energy, Ministry of Economic Affairs, recently released the "114th Year National Power Resource Supply and Demand Report." While overall electricity consumption is projected to slightly decrease in 2025, future demand has been substantially revised upward due to factors such as semiconductor plant expansions, increased power consumption by AI data centers, and extreme weather. The report forecasts an average annual growth rate of 2.5% for national electricity demand from 2026 to 2035, and an average annual growth rate of 2.7% for night peak load, both significantly higher than the 1.24% from 2016 to 2025.

The Taiwan Science Media Center invited experts in energy and power systems to share their perspectives.

Wei Rong-tsung, a distinguished professor in the Department of Electronic Engineering at National Taiwan University of Science and Technology, stated that government subsidy policies should transition from "equipment subsidies" to "energy saving performance subsidies," with actual electricity savings and peak load reduction serving as the basis for subsidy payments.

Wei Rong-tsung suggested that demand response (which refers to using economic incentives to encourage reduced electricity consumption during system peak times to lower peak load) should gradually shift from voluntary participation to capacity obligations or market-based trading for large users.

Furthermore, Wei Rong-tsung pointed out that natural gas policies should include "safety caps" and "low-carbon transition conditions." He recommended that new gas-fired power units should be required to have the flexibility for future retrofitting with hydrogen blending, low-carbon fuels, or carbon capture, utilization, and storage (CCUS). The strategic reserve of natural gas should be evaluated for an increase from the statutory 14 days to 21 to 30 days.

Hsu Hsin-wei, an associate professor and director of the Dual Degree EMBA program in the Department of Industrial Engineering and Management at National Taipei University of Science and Technology, commented that the upward revision of AI electricity demand forecasts can be considered prudent and reasonable. However, international research generally indicates that the growth in electricity consumption by AI and data centers has high uncertainty. Taiwan's electricity demand is simultaneously driven by semiconductor manufacturing, advanced packaging, and the server supply chain. Therefore, power system planning should not rely on single-point estimates but should manage electricity risks under different probabilities using multi-scenario models.

Hsu Hsin-wei believes that the future policy challenge has escalated from "whether power supply is sufficient" to "how to achieve a quantifiable balance between power supply stability, energy security, and net-zero carbon reduction." The key lies not only in meeting installation capacity targets but also in reducing power curtailment, strengthening energy storage and grids, increasing effective night peak capacity, and substantially reducing the carbon intensity of electricity. (Editor: Li Hsi-chang) 0623

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