Taiwan Proposes On Site Power and Storage Rules for TSMC and Other Major Electricity Users

Taiwan is preparing to expand the energy obligations placed on its largest electricity consumers, with a proposed amendment to the Energy Management Act requiring qualifying businesses to install their own power generation and energy storage equipment. However, the proposal would not force TSMC or other companies to independently generate all the electricity consumed by their facilities.

Taiwan’s Executive Yuan approved the draft amendment in May 2026, and the Legislative Yuan is scheduled to review the proposal on July 22. The amendment would add new provisions to Article 10 requiring electricity users above a specified contract capacity to install a minimum amount of self generation and storage infrastructure within a defined implementation period. The exact capacity threshold, required generation volume, storage capacity, equipment types, and compliance timetable would be determined later through supporting regulations.

According to the Economic Daily News, the Ministry of Economic Affairs is considering a threshold of 5 MW. More than 500 electricity accounts reportedly meet that level, with approximately 400 businesses expected to remain within the policy after schools and hospitals are excluded. Potentially affected sectors include semiconductors, displays, steel, petrochemicals, textiles, cement, and artificial intelligence data centers.

Taiwan already requires major electricity users with contract capacities of at least 5 MW to install or procure renewable energy equivalent to 10% of their contract capacity. The proposed Energy Management Act amendment would introduce a separate obligation focused on energy independence, grid resilience, and the ability of large industrial users to support part of their own electricity requirements.

The draft does not specify that companies must replace their entire grid supply with private power plants. It only requires a future minimum amount of self generation and storage, with the final requirements still awaiting legislative approval and subsequent regulations. The Energy Administration has also indicated that the current draft does not restrict qualifying generation equipment exclusively to renewable or low carbon sources. Companies that already operate sufficient compliant infrastructure may not need to install additional equipment.

Businesses that fail to meet the eventual requirements would first receive an improvement deadline. Continued noncompliance could result in fines ranging from NT$150,000 to NT$750,000, followed by additional penalties if the required changes are still not completed. The regulations are also expected to provide a transition period because power equipment, fuel infrastructure, permitting, and construction can require significant preparation.

TSMC would become one of the most closely watched companies under the proposed rules because of the scale of its manufacturing operations. The company currently operates 6 major 12 inch wafer facilities, 4 8 inch fabs, and 1 6 inch fab in Taiwan, alongside research centers and advanced packaging operations. TSMC is also expanding domestic production through projects such as its A14 facility for future 1.4 nm manufacturing and broader 2 nm, 3 nm, and CoWoS capacity investments.

TSMC’s 2024 Sustainability Report recorded total energy consumption of 27,456 GWh, with purchased electricity representing approximately 93%, or about 25.5 billion kWh. Taiwan consumed approximately 283.85 billion kWh during 2024, meaning TSMC’s reported purchased electricity is equivalent in scale to around 9% of national consumption. However, the comparison requires context because TSMC’s sustainability figure includes facilities outside Taiwan and should not be presented as a precise Taiwan only electricity share.

The amendment could create substantial infrastructure and compliance costs for Taiwan’s semiconductor industry, but claims that TSMC will be forced to power its entire fab network independently overstate the proposal. The real impact will depend on the minimum generation and storage percentages established after the law passes. A limited requirement could improve industrial resilience and reduce peak pressure on the grid, while an aggressive threshold could raise manufacturing costs and complicate further advanced node expansion. For TSMC, reliable electricity is not simply an operating expense. It is critical infrastructure for Taiwan’s position at the center of global artificial intelligence, gaming hardware, mobile computing, and high performance semiconductor production.

Should major semiconductor manufacturers be required to build their own power and storage capacity, or should reliable industrial electricity remain primarily the responsibility of the national grid?