Energy policy
The South Korean government is currently redesigning its national power supply plan—the 12th Basic Plan
21 Aug 2026 · SuhngJoon Han
The South Korean government is currently redesigning its national power supply plan—the 12th Basic Plan for Electricity Supply and Demand (“12th Electric Plan”)—to accommodate a massive upward revision in demand driven by AI and semiconductor megaprojects, with a draft expected by September–October 2026 and finalization by year-end.
Revised demand outlook and planning timeline
Demand forecast reset: In August 2026, the government announced it would rebuild the demand forecast from scratch for the 12th plan, incorporating the new 38 GW (≈260 TWh/year) of demand from the three megaprojects.
Scale of revision: The 2040 peak demand outlook has been raised by about 200 TWh within four months, with peak demand now projected up to 165 GW (vs. 129.3 GW in the 11th plan), necessitating a full rework of generation and grid plans.
Timeline: A draft of the 12th plan is due in September–October 2026, with public consultations and parliamentary reviews to follow, aiming for year-end 2026 finalization.
Generation mix and resource roles
The government’s emerging framework treats renewables as the main pillar, nuclear as firm zero-carbon baseload, and LNG as a transitional “bridge” while phasing out coal by 2040.
Coal phase-out: The plan assumes coal-fired generation will end by 2040, requiring replacement capacity from other sources.
Renewables (solar and wind):
Target: 100 GW of renewable capacity by 2030 (accelerated).
Role: Solar is seen as the daytime主力电源 (main daytime source); wind is valued for night-time complementarity, though large-scale offshore wind still faces cost and grid challenges.
Enablers: Border-area and reclaimed-land solar, agrivoltaics, mandatory rooftop solar on factories, and expanded offshore wind.
Nuclear power:
Continued operation of existing reactors (9 units) is treated as a fast way to secure zero-carbon baseload using existing sites.
New large reactors: Adding about 2 new large reactors is under discussion as 2030s–2040s baseload, but the exact number and timing remain subject to expert review and public deliberation.
SMRs: Small Modular Reactors are also on the table, with scale to be decided through the same deliberative process.
Political nuance: While the Presidential Office has signaled that new nuclear will be reflected, the Ministry has emphasized that nothing is finalized until the public process concludes.
LNG as a bridge:
LNG is positioned as a transitional resource to cover intermittency and provide firm capacity while the zero-carbon mix scales up, conditional on a clear decarbonization pathway (e.g., future hydrogen co-firing or strict operating limits).
For the Honam semiconductor cluster, the government says nuclear + renewables can meet electricity needs, but new LNG plants may be built if process heat/steam is required.
Flexibility resources and grid
To manage higher renewable shares and large, concentrated loads, the plan emphasizes storage, pumped hydro, and grid reinforcement:
ESS and pumped hydro: Expansion of battery storage and pumped-storage hydro is a key pillar to balance solar/wind variability and support system reliability.
Grid upgrades: Proactive transmission and distribution reinforcement is planned to deliver power to AI data centers and semiconductor fabs, including new high-voltage corridors and substation upgrades.
Regional industrial tariffs: A region-differentiated industrial electricity tariff system is being developed in the second half of 2026 to reflect local grid costs and encourage efficient siting of large loads.
Public power company reform
The 12th plan also incorporates restructuring of the five state-owned thermal power companies:
Merger/reorientation: The government intends to merge or integrate the five KEPCO-affiliated thermal generators and transform them into renewables-focused entities, aligning with the coal phase-out and renewable expansion goals.
This is meant to address their declining output, aging fleets, and the need for new investment platforms in renewables and storage.
Key open decisions
Several critical elements will be finalized through the ongoing deliberation process:
Number and timing of new large nuclear units and SMRs (including potential Honam-site reactors).
Exact scale and siting of LNG “bridge” capacity, especially around Honam and other industrial clusters.
Detailed renewable deployment pathways (offshore wind scale, solar land-use solutions, and grid connection queues).
Final 2040 generation mix consistent with coal phase-out, net-zero trajectories, and the 38 GW megaproject demand.