Massive AI Projects Demand 18 Nuclear Reactors' Worth of Power, Sparking Energy Plan Review

The South Korean government's announcement of massive AI data center and semiconductor industrial complex projects, slated for development in the Honam, Chungcheong, and Yeongnam regions, is poised to trigger a significant overhaul of the nation's electricity plan. These initiatives are projected to require an additional 25 gigawatts (GW) of power, a demand equivalent to that of 18 state-of-the-art large nuclear reactors, far surpassing existing electricity demand forecasts.

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We need to analyze how much of the peak demand will be reflected, and the actual peak demand, as well as the year-round and time-of-day electricity usage patterns.

This substantial increase in power needs compels the government to re-evaluate the 12th Electricity Supply and Demand Basic Plan (2026-2040). The plan's projected peak electricity demand for 2040, initially estimated between 131.8 GW and 138.2 GW, will need to be revised upwards to accommodate the new demand from data centers and advanced industries, which adds over 20 GW to the previously factored increase of 2.2 GW.

The critical question now is how this burgeoning electricity demand will be met. While the government has committed to expanding renewable energy sources and utilizing existing nuclear power plants, specific allocations for each power source remain undisclosed. Officials have indicated that the revised plan will likely include nuclear power, LNG, hydrogen, and various renewable energy sources.

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The 12th Electricity Basic Plan will include nuclear power, LNG, hydrogen, and all sorts of renewable energy.

Concerns are mounting regarding the potential environmental implications, particularly in relation to the nation's climate goals. The massive power demand for the AI data centers and semiconductor complexes could lead to increased reliance on nuclear and LNG power, potentially slowing the decarbonization of the power sector and conflicting with the national greenhouse gas reduction targets. Environmental groups have criticized the government for prioritizing industrial development without a clear climate action strategy, advocating for green data centers powered by renewable energy.

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Data centers should be 'green data centers' based on renewable energy at a minimum, but the government is focusing only on attracting data centers, not on what the power source is.

Furthermore, the plan to supply power to the Yongin semiconductor cluster, a project with an estimated 15 GW demand, raises questions about the immediate reliance on existing coal-fired power plants located in the eastern and western coastal regions. Transmitting such large amounts of power to the Seoul metropolitan area will necessitate the expansion of ultra-high voltage transmission networks, a process often fraught with local opposition and delays. The environmental groups argue that focusing on new power demands before fully transitioning to renewable energy is a misplaced policy approach.

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Presenting large-scale new power demands before renewable energy transition is sufficiently underway is a policy that is backward.