Korea's mega projects depend on reliable, abundant power

Korea’s ambition to build a new generation of semiconductor, physical artificial intelligence (AI) and data-center industries is running into a basic but formidable constraint: electricity.

A government assessment incorporating demand from its three “mega-projects” estimates that peak power demand could reach 158.4 to 165 gigawatts (GW) in 2040. That is roughly 27 GW higher than the projection made just four months earlier — equivalent to the capacity of about 19 large 1.4-GW nuclear reactors.

The scale of the increase should be a wake-up call. Korea’s current all-time peak demand is about 104 GW. Within 14 years, demand could therefore rise by more than half. The country’s industrial ambitions will mean little if it cannot provide the electricity required to operate the factories, data centers and infrastructure behind them. Building semiconductor clusters and attracting AI investment without securing their power supply would amount to constructing engines without fuel.

The latest estimate, presented at the fifth discussion meeting for the 12th Basic Plan for Electricity Supply and Demand, also warrants scrutiny. Demand from AI data centers, whose investment prospects remain uncertain, has been only partly reflected. The government must guard against both extremes: overestimating speculative projects and committing to unnecessary generation and grid capacity, or underestimating genuine demand and exposing industry to power shortages. The sharp revision in the forecast in such a short period underscores the need for a more dynamic forecasting system that is regularly updated as investment plans become concrete and actual electricity consumption patterns emerge.

The more difficult question is how to meet the additional demand. Renewable energy must continue to expand as part of Korea’s decarbonization strategy. But relying on renewables alone to supply power-hungry industries operating around the clock would be unrealistic. Solar and wind generation fluctuates with weather and time of day, while semiconductor plants and AI data centers require reliable, high-quality electricity without interruption. A resilient power system therefore needs a diverse mix of generation sources, backed by storage and a robust transmission network.

The geographical mismatch is another challenge. Much of Korea’s renewable generation capacity is concentrated in the southwest, while major new demand is emerging around the Seoul metropolitan area, including the Yongin semiconductor cluster and large-scale data centers. Moving electricity over long distances requires enormous investment in transmission infrastructure and can trigger prolonged disputes with local communities. Expanding generation without simultaneously expanding the grid would simply relocate the bottleneck.

This is why nuclear power deserves a serious place in the country’s energy mix. Nuclear plants can provide large volumes of stable, low-carbon electricity, making them particularly relevant to an economy increasingly dependent on energy-intensive advanced industries. Large reactors and small modular reactors should be considered according to their economics, safety, deployment timelines and suitability to different demand centers. Energy policy should be guided by these practical criteria, rather than by ideological attachment to any single source.

Transmission deserves equal priority. A power plant is of little use if the electricity it generates cannot reach the factories and data centers that need it. Generation and grid investments must therefore be planned as a single national infrastructure strategy. Both take years to build, and permitting and local opposition can extend those timelines further. Waiting until demand materializes before beginning construction would be a recipe for delay.

The 12th Basic Plan for Electricity Supply and Demand should consequently be more than a tally of future generating capacity. It should provide a credible blueprint linking industrial policy, generation, transmission, storage and decarbonization. It should also establish clear timelines and mechanisms for updating demand projections as major investments move from proposals to reality.

Korea’s competitiveness in the AI era will depend not only on its ability to develop advanced technologies, but also on its ability to power them. The country cannot afford to unveil ambitious industrial projects first and worry about electricity later. Power generation and the grid must be treated as strategic national assets and built ahead of demand.

The choice is not between industrial growth and the energy transition. With the right mix of nuclear power, renewables, storage and transmission, Korea can pursue both. But that will require pragmatism, speed and long-term planning. If the country wants its mega-projects to become engines of growth rather than stranded investments, securing reliable electricity must be regarded as a national priority now — not after the lights start flickering.

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