South Korean Ministry of Climate warns nuclear PPA could raise electricity rates

The Ministry of Climate, Energy, Environment and Labor has acknowledged that allowing direct Power Purchase Agreements (PPA) for nuclear energy could increase electricity costs for general consumers. Under a PPA, specific companies or industrial complexes would be permitted to purchase electricity directly from nuclear power plants rather than through the standard power market.

The Ministry expressed concerns regarding “cherry picking,” where specific entities monopolize low-cost nuclear power, which accounts for 31% of domestic generation. If nuclear energy is diverted through private contracts, other consumers may be forced to rely on more expensive energy sources, driving up the average purchase price for Korea Electric Power Corporation (KEPCO) and increasing pressure on consumer rates.

Calculations from lawmaker Park Hae-cheol’s office suggest that if a single company were to monopolize the annual output of Wolsong Nuclear Power Plant Unit 2, other electricity consumers could face an additional burden of approximately 280 billion won. While the Ministry previously expressed outright opposition to legislation allowing such agreements, its recent stance has shifted toward calling for a “cautious approach,” a move critics suggest may leave the door open for future implementation.