Taiwan has raised its forecast for electricity demand growth over the next decade, citing expanding semiconductor production and artificial intelligence (AI) data centres, even as power consumption declined slightly last year despite the economy posting its fastest growth in years.
The island’s Ministry of Economic Affairs said last week that electricity demand is expected to grow by an average of 2.5 per cent annually between 2026 and 2035, up from a previous forecast of 1.7 per cent and more than double the 1.2 per cent average growth recorded over the past decade.
Taiwan’s economy grew 8.76 per cent in 2025, but electricity consumption fell 0.3 per cent, reflecting the changing structure of the island’s economy, the ministry said.
Wu Chih-wei, director-general of the Energy Administration, said much of last year’s growth was driven by semiconductor and electronic component manufacturers, which generate higher economic value per unit of electricity consumed than traditional industries.
At the same time, uncertainty over international tariffs weighed on production in energy-intensive industries such as steel, petrochemicals and other traditional manufacturers, reducing overall power demand, Wu added.
Weather conditions also played a role. Frequent typhoons during July and August reduced the number of extremely hot days, keeping air-conditioning demand below expectations.
Looking ahead, however, the ministry expects power demand to accelerate as previously delayed expansion plans by semiconductor firms and AI data centre operators begin to materialise.
The ministry also said rising temperatures linked to climate change are likely to contribute to higher electricity consumption in coming years.
To meet rising demand, Taiwan plans to add 25.98 gigawatts (GW) of new thermal generating capacity by 2035, mostly through new natural gas-fired units at state-owned and private power plants.
To meet the projected demand growth, Taiwan plans to add 25.98 gigawatts (GW) of new thermal power capacity by 2035, primarily from natural gas-fired generating units at state-owned utility Taiwan Power Co’s Hsinta, Taichung, Talin, Tunghsiao and Hsiehho power plants, as well as privately operated facilities such as Kuo Kuang and Mailiao.
The ministry’s planning documents also include 4.2 GW of yet-to-be-designated gas-fired capacity between 2033 and 2035. Officials said the capacity was included based on demand modelling and would be assigned locations at a later stage.
Taiwan Power, a state-owned electric power industry providing electricity to Taiwan and its offshore islands, said future siting decisions would depend partly on where major electricity users ultimately establish operations.
The report projects that Taiwan’s reserve margin during nighttime hours will reach its lowest point in 2029 at 7.1 per cent, though officials said reserve capacity would still remain around 3 GW. Additional generating units scheduled to come online from 2030 are expected to lift reserve margins above 20 per cent from 2031 onward.
The ministry noted that some ageing thermal power units that have reached the end of their economic life would be retained as backup generators because of growing uncertainty over electricity demand and geopolitical risks.
Wu said similar arrangements exist in countries including Japan, South Korea and Britain, adding that the units would only be used when needed. He confirmed that older units at the Hsinta power plant would be converted into reserve capacity rather than remain in regular operation.
On renewable energy, the government said it would no longer focus on percentage-based generation targets and instead use installed capacity as its primary benchmark.
Taiwan aims to reach 31.2 GW of solar power and 10.97 GW of offshore wind capacity by 2030. By 2035, those figures are expected to rise to 35.02 GW and 18.41 GW respectively.
The government acknowledged delays in recent offshore wind development rounds after several developers terminated contracts or fell behind schedule. Wu said authorities would improve the auction and procurement framework and are evaluating additional offshore areas that could support another 2 GW to 3 GW of capacity.
Projects that were previously cancelled or delayed will be reviewed together with future development zones, he said.
On nuclear power, Wu said restarting the two reactors at the Maanshan Nuclear Power Plant, known as Nuclear Three, could provide about 15 billion kilowatt-hours of electricity annually. However, because no timetable has been set for a restart, nuclear generation was not included in the long-term power planning assumptions contained in the report.
