South Korea Reassesses New Nuclear Power Plant Construction Amid Rising AI Electricity Demand

On September 8, South Korea's Minister of Climate and Energy Environment, Kim Sung-hwan, stated in an interview that due to the expansion of the artificial intelligence industry, South Korea's future electricity demand is expected to increase by 25 to 30 gigawatts. The government is reassessing the possibility of constructing new nuclear power plants and plans to announce the 12th Basic Plan for Electricity Supply and Demand next month.

Kim Sung-hwan said the aforementioned additional demand mainly stems from Samsung Electronics and SK hynix expanding semiconductor production, as well as the construction of new AI data centers. As internal combustion engine vehicles transition to electric vehicles and the scope of electric heating replacing gas heating expands, South Korea's overall electricity demand will continue to grow.

The 12th Basic Plan for Electricity Supply and Demand that the South Korean government intends to release is expected to cover long-term electricity supply and demand arrangements through 2040 and make decisions on whether to construct new nuclear power plants. Kim Sung-hwan did not disclose specific details on the scale of new nuclear construction, only stating that the relevant issues are being evaluated by experts. He also noted that nuclear power is a "factor that must be considered" in South Korea's energy mix.

If nuclear power were to fully meet the 25 to 30 gigawatts of additional electricity demand related to AI, it would be equivalent to the generating capacity of approximately 20 Korean-standard nuclear power units. Currently, South Korea operates 26 nuclear power units, with nuclear power meeting about one-third of the country's electricity demand.

The semiconductor industry is one of the key factors driving the growth of South Korea's electricity demand. Samsung Electronics and SK hynix are advancing the construction of new production facilities under the southwestern semiconductor mega-project, totaling approximately 800 trillion won, which the South Korean government announced this year. Kim Sung-hwan stated that some projects originally scheduled for completion around 2045 have been significantly accelerated, with targets adjusted to be completed by the early 2030s.

Kim Sung-hwan also mentioned the possibility of overseas large technology companies investing in data centers in South Korea. He stated that given South Korea's relatively stable electricity supply, several U.S. technology companies, including NVIDIA Corporation (NVIDIA), have expressed interest in building data centers in the country.

The South Korean government also plans to expand the use of renewable energy. Currently, renewable energy accounts for approximately 11% of South Korea's electricity supply, coal 29%, and natural gas 27%. South Korea plans to phase out coal-fired power plants by 2040. However, among the 60 coal-fired power plants currently in operation, approximately 20 have design lifespans extending beyond 2040, and the government is considering retaining some facilities as emergency backup power sources. Kim Sung-hwan stated that such arrangements could serve as a "safety reserve" to respond to sudden power supply risks.