South Korean energy and climate policy updates

South Korean Climate, Energy and Environment Minister Kim Seong-hwan announced a series of policy roadmaps focused on energy management and climate security. Initial plans included the development of the 12th Basic Plan for Electricity Supply and Demand, which addresses nuclear power operations and the potential expansion of LNG generation to support semiconductor and AI data center needs. The government also signaled intentions to construct seven new dams and increase budgets for water quality management.

Following these announcements, the government and Korea Electric Power Corporation (KEPCO) detailed a specific proposal for a regional industrial electricity pricing system. The plan seeks to reduce corporate electricity costs by approximately 2.8 trillion won by implementing different rates across four zones: Southern Metropolitan, Northern Metropolitan, Central, and Southern. Under this draft, regions with high concentrations of nuclear and renewable energy, such as the Southern zone, would receive higher discounts. However, the proposal has faced local criticism in Incheon, where stakeholders argue the regional categorization may disadvantage the city’s manufacturing and port sectors despite its high power self-sufficiency.