Realizing Taiwan’s AI ambitions

When Taiwan Power Co (Taipower) vice president Tsai Chih-meng (蔡志孟) visited Paris last week, the discussion was not about another spectacular artificial intelligence (AI) investment announcement. It was about the less visible infrastructure needed to make those investments possible: power grids, transformers, fuel supplies and the ability to deliver electricity where and when industry needs it.

Tsai on Thursday last week cochaired the Taiwan-France Economic Cooperation Conference with MEDEF International Sustainable Cities Task Force chairman Gerard Wolf. The meeting was organized by the Chinese International Economic Cooperation Association and MEDEF International, with the involvement of the Taipei Representative Office in France. Representative to France Hao Pei-chih (郝培芝) also addressed the meeting.

The program showed how much the energy discussion has changed. The three sessions dealt with grid modernization, infrastructure resilience in the AI era, and energy security and geopolitics. For Taiwan, AI policy is becoming electricity policy.

Taipower has already received 75 transmission-level connection requests from data centers, representing 4,523 megawatts of requested capacity by the end of July. However, a request for capacity is not the same thing as a functioning data center.

Of the 47 requests that had received Taipower’s agreement, about 40 percent expired before a formal application was submitted.

Governments and grid operators need to know which projects are likely to happen, where they would be located and when they would need electricity. Otherwise, billions could be committed to infrastructure for projects that remain on paper, while more mature investments wait for connections.

This issue is not unique to Taiwan. France is also changing the way large electricity users are connected, paying more attention to the maturity of projects rather than the date on which a request entered the queue. That creates an obvious field for Taiwan-France cooperation.

Taipower’s Chang Chia-hsi (張家熙) spoke in Paris about grid upgrades in response to the AI wave. Lionel Besombes of EDF International Networks discussed smart metering. Ancillary Power founder and CEO Ivan Cheng (鄭智文) presented a Taiwanese view of grid resilience.

Behind these technical subjects lies a political question: How much infrastructure should be built, for whom and who should pay for it?

A new data center or semiconductor plant can require major upgrades to substations and transmission lines. If a project is delayed by five years, those costs do not disappear. If several very large consumers arrive in the same area, the problem becomes even more acute.

Demand management, storage and better information can reduce some of the pressure, but they do not remove the need for physical infrastructure. The same is true of equipment.

Fortune Electric, whose representatives I met during the conference, manufactures transformers and other power equipment. This is another part of the Taiwan-France relationship that deserves more attention. Taiwan is not simply a market for European energy technology. Taiwanese companies can also contribute to the huge investment now required in European grids.

The wider Taiwanese mission in France reflects this shift. The association’s program included meetings with major energy companies and grid actors, including RTE, TotalEnergies and Hitachi Energy. This is important, because Taiwan’s energy problem does not stop at the grid.

The country remains highly dependent on imported fuels. Taipower Department of Fuels deputy director Chiang Kuan-shen (蔣光聲) spoke in Paris about reserves and diversification at a time of growing geopolitical uncertainty.

For liquefied natural gas, diversification is useful, but has limits. Buying gas from more countries reduces dependence on a single supplier. Yet the gas still has to reach Taiwan by ship.

That is why I said in Paris that Taiwan should look at energy security in terms of different kinds of dependence.

Gas provides useful flexibility, but it requires frequent deliveries. Nuclear power also depends on imported fuel and technical services, but the fuel can be planned over much longer periods. Offshore wind produces electricity locally, but requires a stronger and more flexible grid. Geothermal can provide firm domestic generation, but the first obstacle is finding and proving the resource.

For geothermal, the main risk comes before the plant produces a single kilowatt-hour. Exploration wells are expensive and some will fail. France has experience with mechanisms that share part of that geological risk. This is the kind of practical tool that could be discussed with Taiwanese partners.

The same reasoning applies to nuclear power. A restart of nuclear plants is not simply a decision to turn a reactor back on. Fuel must be procured, maintenance organized, qualified suppliers available and spent-fuel storage managed. If Taiwan chooses that path, these issues have to be planned together.

The objective should not be to choose one technology and expect it to solve every problem.

Taiwan needs technologies with different strengths and weaknesses. Gas, nuclear, offshore wind, solar, storage and geothermal do not create the same vulnerabilities. A more resilient system is one that does not depend too heavily on a single fuel, route or technical solution.

Taiwan’s semiconductor industry is central to global supply chains. Europe has spent several years discussing how to reduce the risks surrounding its semiconductor supply, but chip security also depends on the reliability of the electricity system that produces those chips.

Taiwan and France have a reason to move beyond general discussions about “energy cooperation.” They could compare electricity demand scenarios linked to AI and semiconductor investment, share experience on grid planning and large consumers, work on storage and flexibility, and select a small number of concrete projects where cooperation can actually be measured.

Some cooperation would be French technology moving to Taiwan. Some should also be Taiwanese technology moving to Europe.

The office, the association and MEDEF International have already created the political and business channels. Taipower and French grid companies have technical experience. Taiwanese manufacturers have equipment and industrial capacity. The next stage is to connect these pieces.

The energy transition is often presented as a debate about how electricity is produced. For Taiwan, that is too narrow. The more important question is whether the entire electricity system — generation, fuel, grids, storage and equipment — could support the industrial strategy the country has chosen.

For an economy betting heavily on semiconductors and AI, that might become one of the most important economic questions of the decade.

Romain Blachier is president of Association France-Formosa, an energy and Asia consultant, an associate fellow at the Fondation Jean-Jaures, works in renewable energy, and teaches energy policy and geopolitics.