Seoul: Korea's ambition to develop next-generation semiconductors, physical artificial intelligence, and data centers is encountering a significant constraint: electricity. According to Yonhap News Agency, a government assessment integrating demand from Korea's "three megaprojects" suggests that peak power demand could soar to 158.4 to 165 gigawatts by 2040. This marks an increase of approximately 27 gigawatts from projections made just four months earlier, equating to the capacity of about 19 large nuclear reactors.
The sharp rise in projected power demand serves as a wake-up call, highlighting the need for Korea to secure the electricity necessary to sustain its industrial ambitions. The country's current peak demand stands at about 104 gigawatts, indicating a potential increase of over 50% within 14 years. Without a reliable power supply, the development of semiconductor clusters and attraction of AI investments could falter.
The recent estimate, discussed at the fifth meeting for the 12th Basic Plan for Electricity Supply and Demand, raises concerns. Demand forecasts from AI data centers, with uncertain investment prospects, have been only partially considered. The government must balance against overestimating speculative projects or underestimating genuine demand, preventing power shortages or unnecessary infrastructure investments. The rapid revision in forecasts underscores the necessity for a dynamic system that adapts as investment plans and consumption patterns evolve.
Meeting the additional demand poses a challenge, as relying solely on renewable energy is unrealistic for industries requiring uninterrupted, high-quality electricity. The intermittent nature of solar and wind power necessitates a diverse energy mix, supported by storage and a robust transmission network.
Geographical mismatches further complicate the situation. Much of Korea's renewable capacity is in the southwest, while demand grows around the Seoul metropolitan area. Transmitting electricity over long distances requires substantial investment in infrastructure and could lead to disputes with local communities, highlighting the need for simultaneous grid expansion.
Nuclear power could play a significant role in Korea's energy strategy, providing stable, low-carbon electricity essential for energy-intensive industries. Large and small modular reactors could be considered based on economic and safety factors. Energy policy should focus on practical criteria rather than ideological preferences.
Transmission infrastructure also requires priority, as power plants need to deliver electricity to factories and data centers effectively. Coordinated planning for generation and grid investments is crucial, as delays in construction could hinder Korea's industrial growth.
The 12th Basic Plan should offer more than a future capacity tally, providing a blueprint linking industrial policy, generation, transmission, storage, and decarbonization. Clear timelines and mechanisms for updating demand projections as investments progress are essential.
Korea's competitiveness in the AI era relies not only on technological advancements but also on the ability to power them. The country must prioritize power generation and grid infrastructure as national assets. By combining nuclear power, renewables, storage, and transmission, Korea can achieve industrial growth and energy transition. Pragmatism, speed, and long-term planning are vital for turning mega-projects into engines of growth rather than stranded investments.