South Korea's Semiconductor Hubs Face Power Grid Bottleneck

The timely launch of major semiconductor industrial complexes in South Korea's Honam region and Yongin is critically dependent on the pace of power grid expansion, potentially overshadowing the speed of factory construction itself. Even if the government streamlines permits for rapid facility development, factories cannot operate without the necessary transmission lines to deliver electricity from power plants.

A significant hurdle is the lack of a finalized plan for the detailed routes and schedules of key transmission networks required to supply the massive electricity demand of these complexes, estimated at 20 million kW. This challenge is compounded by the projected surge in power needs from large-scale AI data centers. While the exact operational power usage will vary, the combined potential demand could reach up to 38.4 million kW by 2035, according to government plans.

Currently, the expansion of transmission lines lags significantly behind the growth in power generation capacity. From 2020 to the present, while domestic power generation facilities increased by 22.1%, transmission lines only grew by 4.4%. The scale of future projects, such as the "East Coast-East Seoul Ultra-High Voltage Direct Current (HVDC)" project, highlights the challenge. This single project, designed to transmit up to 8 million kW from Uljin on the east coast to Hanam in Gyeonggi Province, spans approximately 560 circuit kilometers (C-km). This one project alone accounts for 37% of the national transmission line increase over the past five years, indicating the immense scale of new infrastructure required.

Experts point to public acceptance as the primary obstacle. Even with reduced environmental assessment and permitting periods, opposition from communities where new transmission towers and substations are planned can delay construction. Professor Jeong Se-eun of Chungnam National University's economics department suggests the government establish a dedicated organization to handle resident consultations and conflict resolution, along with clear compensation standards, as Korea Electric Power Corporation (KEPCO) employees are power grid specialists, not negotiation experts.

Expanding underground transmission lines, despite being five times more expensive than overhead lines, is also being considered as a way to mitigate public opposition. Professor Yoo Seung-hoon of Seoul National University of Science and Technology's Future Energy Convergence department argues that the cost of undergrounding might ultimately be lower when factoring in the expenses related to compensation, lawsuits, and construction delays associated with public resistance. Furthermore, there are calls to treat power grid expansion as a national strategic project, not just KEPCO's investment. Yoo suggests that national funds should be allocated to power grids for semiconductor and AI industries, similar to roads and railways, with beneficiary companies sharing the costs to ensure the government's "speed race" translates into actual construction.