South Korea’s $3.1t mega-project risks power gap without grid push

Solar alone would require about 19.5 GW of new installations within five years.

South Korea's flagship $3.1t (KRW470t) national mega-project, including the $528b (KRW800t) semiconductor and artificial intelligence data centre cluster planned for the Honam region, faces a widening power shortfall unless grid investment accelerates.

In a report, Wood Mackenzie said the Honam cluster alone could push regional peak electricity demand to 19.1 gigawatts (GW) once fully built out from an estimated 11.8 GW today.

The report forecasts effective regional generating capacity will reach only 16.8 GW by 2030 under current plans, leaving a shortfall of roughly 2.3 GW.

Honam holds the strongest renewable energy potential of any region in the country, but the report noted that transmission constraints are blocking access.

The Honam-Central corridor already experiences spring congestion, preventing new solar and other renewable projects from securing grid connections despite available resources.

Closing the gap through solar alone would require about 19.5 GW of new installations within five years.

“Only 679 MW of solar capacity was added region-wide in 2025, making that pace unrealistic without a rapid scale-up of battery energy storage systems,” Wood Mackenzie said.

Moreover, market design is a key bottleneck—batteries currently earn revenue mainly through South Korea's central contract market, limiting deployment.

Wood Mackenzie says either expanding procurement volumes or introducing broader market reforms is essential.

On firm generation, extending the Hanbit Nuclear Power Plant's operating life by 10 years could preserve about 2 GW of capacity otherwise set to retire; roughly 3 GW of Hanbit's 5.9 GW fleet is currently scheduled to reach end-of-life by 2035.

Natural gas is a secondary option, though global turbine lead times run five to six years, making domestically manufactured turbines a faster path under the upcoming 12th Basic Plan for Electricity Supply and Demand.

Longer term, brownfield nuclear development on land reserved for Hanbit Units 7 and 8 could cut construction costs by 10 to 15% versus greenfield projects.

Reinforcing the Yeongnam-Honam transmission corridor could also route surplus nuclear power from Yeongnam, where effective capacity exceeds peak demand by 15.9 GW, into Honam's growing industrial load.

The report notes that rising local consumption of Honam's renewable output could also reduce the scale needed for the proposed 8 GW West Coast HVDC transmission project.