Decoding the Energy Management Act Amendment: Power Supply Resilience, Cybersecurity, and the Microgrid Revolution in the AIDC Era

Taiwan's Legislative Yuan recently passed amendments to certain provisions of the Energy Management Act (《能源管理法》) in the 3rd reading, completing the most significant overhaul of the law in nearly a decade. In addition to requiring greater transparency in energy sales data and increasing penalties for violations, the amendment's most closely watched provision requires newly established or expanded energy users exceeding a specified scale to install "self-use power generation facilities" or "energy storage systems"within a designated timeframe.

The requirement signals that Taiwan's energy policy is moving beyond the traditional focus on "energy conservation and carbon reduction" and "energy efficiency improvement" toward a new era centered on operational resilience and power supply stability through additional generation and backup capacity. As artificial intelligence reshapes industries worldwide, this legislative milestone sends a clear message: national power is increasingly tied to computing power, and computing power ultimately depends on electricity.

Electricity Is National Power: National Security and Cybersecurity Strategies in the Sovereign AI Era

The explosive growth of AI applications is rapidly reshaping the global energy consumption landscape. According to data from the International Energy Agency (IEA) and industry reports, global data center power demand is projected to reach 174 GW by 2030, requiring the addition of more than 53 GW of data center capacity annually on average.

Jensen Huang (黃仁勳), CEO of Nvidia (輝達), has said "Human labor needs rice, but AI labor needs electricity.[1]"
From a hardware perspective, conventional server racks typically consume only around 5–10 kW, but driven by next-generation GPUs such as the GB200 and GB300, as well as the future Rubin platform, power consumption per AI Data Center (AIDC) rack has surged to 100 kW or even more than 300 kW. This extreme power density has already pushed beyond the physical constraints of conventional grids and power transmission and distribution systems. Electricity is therefore no longer merely an operating expense for businesses, but a critical infrastructure underpinning national competitiveness.

A deeper consideration lies in the national security strategy surrounding "Sovereign AI[2]" (主權 AI) and data localization. To prevent the leakage of core commercial secrets, sensitive government documents, and advanced semiconductor process data, the development of localized AIDCs has become a non-negotiable requirement. However, as energy systems and high-density computing infrastructure become increasingly digitalized and networked, the energy infrastructure itself can become a potential cybersecurity vulnerability. If the High-Voltage Direct Current (HVDC) architectures, microgrids, and Energy Management Systems (EMS) deployed in future AIDCs are compromised by cyberattacks or controlled by external threats, they could trigger widespread cascading power outages and potentially disrupt national computing capacity.

Accordingly, from the smallest control units and battery management systems to EMS control rooms, adopting energy supply chains featuring robust cybersecurity software, mature and stable hardware architectures, and locally developed and manufactured technologies has become an essential strategy for safeguarding both energy sovereignty and national security.

Breaking Through Industry Bottlenecks: Microgrids as a Solution to the NIMBY Effect Through Technological Innovation

As the modernization of aging power grids progresses slowly—with the U.S. grid, for example, facing transformer lead times of more than 100 weeks—businesses can no longer rely solely on the expansion schedules of Taipower or public utilities. The shift towards intelligent microgrid systems featuring autonomous on-site power supply and Behind-The-Meter (BTM) energy storage is becoming a vital strategy for high-tech companies and AIDCs. Microgrids enable businesses to store lower-cost electricity during off-peak periods, shift loads during peak periods, and switch to self-sufficient operation within milliseconds when grid abnormalities occur, combining economic benefits with enhanced backup resilience.

However, the biggest obstacle to deploying microgrids and AIDCs is often the strong "Not In My Back Yard" (NIMBY)[3] effect among local residents. Concerns over electromagnetic fields from high-voltage substations, as well as fears of fires caused by thermal runaway in large-scale lithium-ion battery energy storage systems, can trigger strong community opposition and make site selection difficult. Transforming such "NIMBY facilities" into "Yes In My Back Yard (YIMBY)[4] facilities" will require technological innovation, shared social benefits, and carefully developed communication and consensus-building strategies:

－Breakthroughs in Insulation Safety Technology:
Traditional air- or water-cooling systems cannot completely prevent thermal runaway in lithium-ion batteries. Immersion cooling energy storage technology, which fully submerges battery modules in a non-conductive and non-combustible insulating medium, can provide uniform 360-degree temperature control. Even when an individual battery cell malfunctions, the system can absorb heat within milliseconds and interrupt the chain reaction. Technologies meeting stringent international fire-safety standards and certifications, including UL 9540A and NFPA 855, can help address fundamental public concerns over energy storage safety.

－Shared Community Resilience—Disaster-Resilient Microgrids:
Intelligent microgrids should not function solely as private corporate assets. During severe typhoons, earthquakes, or regional power outages, microgrids can use intelligent dispatch systems to provide backup electricity to surrounding communities for emergency medical services or essential lighting, transforming them into "resilience fortresses" that help safeguard community power supplies.

Connecting with NDC 3.0: Rethinking Corporate Facility Development for Energy and Carbon Gains

Taiwan's latest 2035 Nationally Determined Contribution (NDC 3.0) explicitly sets an ambitious target of reducing greenhouse gas emissions by 36% to 40% from the baseline year by 2035 through a "Twin Transformation" (Green x Digital). Against this policy backdrop, the amendment to the Energy Management Act serves as a key driver of this dual transformation.

For businesses, decision-making surrounding new facilities and capacity expansion must undergo a fundamental shift. In the past, facility development typically focused on land, water, electricity, and supply chains. Going forward, companies will need to incorporate the Capital Expenditures (CapEx), equipment depreciation, and Operating Expense (OPEX) associated with self-generation facilities, Battery Energy Storage Systems (BESS), power supply architectures, and intelligent EMS management platforms into comprehensive return-on-investment and risk assessments.

Following the implementation of IFRS S1/S2 Sustainability Disclosure Standards (IFRS 永續揭露準則)[5] and the carbon fee system, accurate energy data and efficient electricity-use strategies will directly translate into core competitive advantages for companies seeking green financing and integration into international supply chains.

The energy competition in the high-computing era is by no means a solo endeavor. The Legislative Yuan's amendment to the Energy Management Act marks the beginning of the next phase of Taiwan's energy transition. Through improvements in safety enabled by indigenous technological development, stronger cybersecurity protection, and broader deployment of microgrid technologies, Taiwan's industries may be able to safeguard energy sovereignty while steadily advancing toward net-zero emissions and sustainable value creation. With the right business models, this transformation could also provide a mature and replicable template for international markets.

Reference:
[1] Nvidia CEO Jensen Huang publicly stated during his visit to Taiwan in May 2026: "Human labor needs rice, but AI labor needs electricity. So, in the future, Taiwan will unify human labor, robotic labor, and AI labor. To do that, we'll need a lot more electricity."
Source: https://www.youtube.com/watch?v=kZs6-yqwFig

[2] Sovereign AI refers to a country or region that has developed its own AI infrastructure, data resources, talent, and algorithms. This self-sufficiency allows the country to avoid relying entirely on foreign technology companies or external influences. The goal is to safeguard national security, protect economic interests, and preserve local cultural values.
Source: https://www.bnext.com.tw/article/79391/sovereign-ai

[3] Not In My Back Yard" (NIMBY) is a term for when people support a new project or building in general, but fight to stop it from being built near their own homes.
Source: https://www.ebsco.com/research-starters/psychology/not-my-backyard-attitudes

[4] "Yes In My Back Yard" (YIMBY) primarily refers to public facilities that are welcomed and appreciated by residents because they bring positive benefits to the surrounding living environment, convenience, and comfort.
Source: https://zh.wikipedia.org/zh-tw/%E8%BF%8E%E8%87%82%E6%95%88%E6%87%89

[5] IFRS Sustainability Disclosure Standards: IFRS S1 and S2 are global sustainability disclosure baselines released by the International Sustainability Standards Board (ISSB) in 2023. S1 regulates general sustainability information disclosure, while S2 focuses on climate-related disclosure. It is expected that listed companies in Taiwan will gradually adopt these standards starting in 2026.
Source: https://coreverie.com/guide/ifrs-sustainability