Subsidy Policy Launched, Domestic Battery Cells as Key Threshold
On August 18, the Ministry of Economic Affairs held a press conference to announce a subsidy of NT$5 million per MWh for behind-the-meter energy storage systems that use domestically manufactured lithium-based battery cells. The policy is expected to drive industrial parks, science parks, and other industrial users to accelerate the adoption of energy storage systems. The ministry stated that this initiative serves dual purposes: stabilizing the power grid and fostering the domestic supply chain. By improving power quality through load regulation, the policy aims to shift industrial energy consumption from a "unidirectional reliance on the grid" to a new model of "energy reserves."
The Bureau of Energy further clarified that the subsidy is explicitly limited to energy storage systems using domestically produced lithium-based battery cells, including mainstream technologies such as ternary lithium, pouch lithium, and lithium titanate. Following the policy’s implementation, it is anticipated to directly stimulate demand for domestic battery cells, injecting momentum into the related industrial chain. However, the Ministry of Economic Affairs has not yet disclosed the total budget or execution timeline for the subsidy, raising questions about the policy’s actual driving force.
Taiwan Cement and Giga Solar Expand Production Lines, Targeting AI Data Center Opportunities
EnerOne, a subsidiary of Taiwan Cement under the Molicel brand, operates a factory in the Southern Taiwan Science Park, focusing on the production of high-performance ternary lithium battery cells. Its products are already applied in energy storage systems and backup power for data centers. EnerOne stated that as demand for high-efficiency batteries in AI data centers continues to rise, the company is prepared to expand production capacity and is expected to directly benefit from the new policy.
Another battery manufacturer, Giga Solar, has established three production bases in the Zhongli Industrial Park, specializing in pouch lithium battery cells. Its product lineup includes LTO lithium titanate, XNO niobium-based, and ternary lithium technologies. Giga Solar noted that its battery products have already penetrated the backup power market for AI data centers and industrial energy storage. The company plans to adjust its production capacity structure in response to the policy to meet domestic market demand. Other manufacturers, such as Enebest, are also evaluating expansion plans to seize the policy-driven opportunities.
National Standards and Testing Capacity Upgraded in Tandem
To ensure the safety of energy storage equipment, the Bureau of Standards, Metrology and Inspection has completed the formulation of 24 national standards by the end of 2025, covering battery cells, modules, and systems at all levels. Starting in 2026, Taiwan’s National Energy Storage System Testing Center will officially commence operations, offering testing services for systems up to 360 kWh and featuring the country’s only combustion testing capability.
The Ministry of Economic Affairs stated that the launch of the new testing center will significantly enhance domestic testing capacity for energy storage equipment. Previously, most domestic testing capacities were below 100 kWh, making it difficult to meet the needs of large-scale energy storage systems. With localized testing services, costs are expected to be reduced by over 50%, while also saving time and expenses associated with overseas sample shipments, thereby lowering the entry barriers for businesses.
Despite the simultaneous upgrades in policy and testing infrastructure, the industry remains concerned about the actual production capacity and market competitiveness of domestic battery cells. The Ministry of Economic Affairs has not yet released specific data on the production capacity or market share of domestically produced lithium-based battery cells, nor has it provided information on the current adoption rate of energy storage systems among industrial park and science park users. Analysts suggest that the effectiveness of the subsidy policy in driving demand for domestic batteries will depend on the actual adoption willingness of industrial users and the coordination of the domestic supply chain.
