Business · Companies · 1 hr ago
South Korea weighs cutting planned power for AI data centers
South Korea is considering a major cut to planned power for AI data centers in its next national electricity plan.
The government is weighing a reduction of 3–4 gigawatts from the 7.9 gigawatts included in a preliminary plan last August.
It says some proposed projects remain uncertain, and counting too much demand could lead to costly grid investments if projects do not go ahead.
Industry leaders say reliable power is essential to build AI infrastructure quickly, and warn that delays could hurt South Korea’s ability to compete.
A policy group says planned domestic AI data-center investment through 2035 is about 20 gigawatts, but only 2.5 gigawatts has confirmed demand.
Companies want more ways to buy electricity directly from power producers, including gas and nuclear generators, rather than only through state utility KEPCO.
The energy ministry opposes expanding gas power deals, saying they could disrupt electricity supply and shift costs to other producers and consumers.
The government plans to publish its final electricity plan early next year.
South Korea is considering cutting projected electricity demand from AI data centers by 3–4 gigawatts in its next power supply plan.
The proposal would reduce the 7.9GW of AI data center demand included in an August provisional plan.
The government says uncertain projects should be included in a later plan rather than counted now.
Industry representatives warn that reducing planned power could delay projects and weaken South Korea’s competitiveness.
They are calling for rules that would allow data centers to buy power directly from a wider range of generators.
- Who
- South Korea’s Ministry of Climate, Energy and Environment is reviewing the proposal. AI data center businesses oppose reducing the planned power.
- What
- The ministry is considering cutting projected AI data center electricity demand by 3–4GW from the provisional 7.9GW figure.
- When
- The proposal is being considered for the 12th Basic Plan for Electricity Supply and Demand, due to be announced early next year.
- Where
- South Korea.
- Why
- The government is concerned that uncertain or cancelled projects could leave Korea Electric Power Corp. with costly grid investments. Industry says reliable power is essential to building data centers quickly.
South Korean government
AI data center industry
Planned power demand
South Korean government
The government is considering reducing the provisional 7.9GW forecast by 3–4GW, saying uncertain demand is better reflected in a later plan.
AI data center industry
Industry representatives say cutting planned power could stall projects and weaken competitiveness.
Power purchasing rules
South Korean government
The climate ministry opposes expanding LNG power purchase agreements, citing risks to power supply management and costs being passed to other generators and consumers.
AI data center industry
Industry representatives want direct power purchase agreements expanded to include stable sources such as LNG, nuclear power, small modular reactors and hydrogen.
The government announced a plan to pursue AI data center projects in two phases.
A provisional power plan included 7.9GW of AI data center demand from first-phase projects.
Maeil Business reported that the ministry was considering cutting 3–4GW from the provisional figure.
The government is due to announce the final 12th Basic Plan for Electricity Supply and Demand.
- Proposed reduction
- 3–4GW
- Provisional AI data center demand
- 7.9GW
- First-phase project demand
- 8.4GW
- Second-phase project demand
- 10GW
- Confirmed demand
- 2.5GW of planned domestic AI data center investment, according to the Next policy think tank
- Final plan
- 12th Basic Plan for Electricity Supply and Demand is due early next year
What people are saying
Projects initially proposed are being divided into those that are proceeding and those that are not.
With construction speed being competitiveness, if securing power takes months or years, we will inevitably fall behind in global competition.