Newly-projected energy demand created by AI and chips calls for 19 more nuclear reactors
Korea’s projected 2040 peak electricity demand jumped by up to 26.8 gigawatts, intensifying debate over new nuclear reactors and liquefied natural gas plants.
An SK hynix semiconductor fab under construction in Wonsam-myeon, Cheoin District, Yongin, Gyeonggi, on Aug. 11.JOINT PRESS CORPS
Korea’s projected peak electricity demand in 2040 has risen by as much as 26.8 gigawatts from an estimate made just four months ago — equivalent to about 19 large APR1400 nuclear reactors with a capacity of 1.4 gigawatts each.
The increase reflects the country's three so-called megaprojects, which include a semiconductor cluster in its southwest region and AI data centers. Discussions on building new nuclear reactors and liquefied natural gas power plants are expected to accelerate to meet surging electricity demand.
The Ministry of Climate, Energy and Environment unveiled its electricity demand forecast for the 12th Basic Plan for Long-Term Electricity Supply and Demand during a forum at the National Assembly in western Seoul on Thursday. The government released an initial estimate in April but revised the forecast four months later after three major megaprojects, including the Honam semiconductor cluster and AI data centers, were announced and companies fleshed out their investment plans. Honam refers to Korea's southwestern region, including the Jeolla provinces and Gwangju.
Under the new forecast, annual peak electricity demand is projected to reach between 158.4 and 165 gigawatts in 2040. That is about 20 percent, or 26.6 to 26.8 gigawatts, higher than the 131.8 to 138.2 gigawatts projected in April. Given that Korea’s peak electricity demand currently stands at around 100 gigawatts, peak demand is expected to exceed 1.5 times the current level within 14 years.
The sharp revision was driven by semiconductor facilities and AI data centers. Additional peak electricity demand from semiconductors and other advanced industries beyond their existing growth trajectory is now projected at 24.3 to 24.6 gigawatts, more than six times the 3.7 to 4 gigawatts estimated in April. Additional demand from AI data centers also nearly tripled from 4 gigawatts to 11.9 gigawatts.
The government estimates potential semiconductor electricity demand at around 40 gigawatts of contracted capacity by 2040. That includes the early completion of the Yongin semiconductor cluster, four new semiconductor fabs in the Honam region and expansions of fabs in Pyeongtaek and Cheongju. Of that amount, the government incorporated 36.8 gigawatts into the latest forecast.
“We reflected everything announced as part of the megaprojects, while making some adjustments to account for uncertainty regarding additional expansion plans submitted after the megaprojects were announced,” said Choi Yong-ok, a professor of economics at Chung-Ang University.
The government applied relatively conservative criteria to AI data centers. Companies have submitted investment plans amounting to 20.8 gigawatts of contracted capacity by 2040, but the government reflected only 10.8 gigawatts from the first phase, for which details such as locations and scale have been specified. It plans to monitor progress on the remaining 10 gigawatts in the second phase before deciding whether to include them in the next basic electricity plan, because AI data center investments carry greater uncertainty than semiconductor investments..
A photo shows ongoing construction and infrastructure work at the Yongin Semiconductor Cluster in Yongin, Gyeonggi, on June 29.YONHAP
The government also sharply raised its forecast for annual electricity consumption. Target electricity demand in 2040 increased by as much as 191 terawatt-hours, from the 657.6 to 694.1 terawatt-hours projected in April to 847.3 to 885.1 terawatt-hours. Compared to the 624.5 terawatt-hours targeted for 2038, the final year covered by the 11th basic electricity plan, the new projection is as much as 260.6 terawatt-hours, or 41.7 percent, higher, although the base years are two years apart. In April, the difference from the 11th basic electricity plan had been only around 70 terawatt-hours at most.
Concerns mount that Korea could lose competitiveness in advanced industries if power plants and transmission infrastructure are not built in time.
“It would be a major strategic mistake if a lack of energy supply prevents us from pursuing advanced manufacturing or AI industries that other countries are developing,” said Kim Hee-jip, a professor at Seoul National University’s Graduate School of International Studies. “Offshore wind farms, nuclear power plants and transmission infrastructure all take around 10 years to build, so we need to anticipate the future and prepare for it.”
Options for power generation capable of meeting the surge in demand are limited. Semiconductor plants and AI data centers concentrate massive electricity loads at single sites and require high levels of power around the clock. Because new nuclear reactors take years to build, delaying decisions could narrow the options available when additional generating capacity is needed.
“Advanced industries generate relatively even loads throughout the day,” Park Woo-young, head of energy transition policy research at the Korea Energy Economics Institute, said during the fourth public forum on the basic electricity plan Thursday morning. “Among carbon-free energy sources, nuclear power is effectively the only option capable of responding well to these electricity load patterns and meeting demand.”
A view of the Kori-1 nuclear reactor in Gijang County, Busan. The Nuclear Safety and Security Commission approved its decommissioning on June 26. Korea’s first nuclear power plant, Kori-1 begins full-scale dismantling 53 years after receiving construction approval in 1972 and eight years after its permanent shutdown was decided in 2017.YONHAP
Still, others counter that placing too much weight on uncertain industrial demand could lead to excessive investment in power generation capacity.
“Incorporating unverified figures could ultimately result in overinvestment in generating capacity,” said Han Ga-hee, head of the energy policy team at Solutions for Our Climate.
The government plans to decide under the 12th basic electricity plan whether to build additional nuclear reactors beyond the two large reactors and one small modular reactor included in the 11th plan, for which sites were recently selected.
“We need a discussion about whether our society should build more nuclear power plants, whether we can manage without building them and what approach would best suit these circumstances,” Climate Minister Kim Sung-whan said Thursday.
The government plans to draw up its proposal for the 12th basic electricity plan by October and finalize the plan by the end of the year.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
