South Korea plans to install more than 10 gigawatts (GW) of new solar power capacity next year as it seeks to meet soaring electricity demand from artificial intelligence (AI) while reducing reliance on carbon-intensive energy, the country’s climate and energy minister said.
The government will also consider allowing households to receive cash payments for surplus electricity generated by rooftop solar systems, introduce regional electricity pricing for industrial users and develop a separate tariff structure for AI data centres.
Climate, Energy and Environment Minister Kim Sung-hwan outlined the measures at a briefing in Seoul on Wednesday, marking his first year in office and presenting the ministry’s priorities for the second half of 2026.
“We are facing the AI revolution and the climate crisis at the same time,” Kim said. “We want South Korea to be the first country to meet the growing electricity demand from AI with decarbonised energy rather than carbon-based generation.”
The ministry is aiming for 100 GW of installed renewable energy capacity by 2030 and plans to accelerate solar deployment in the second half of this year.
Kim acknowledged that renewable energy additions had not grown particularly quickly during the first half, but said the government would seek to install more than 10 GW of solar capacity in 2027.
Large-scale solar projects are planned around Lake Sihwa and areas near the inter-Korean border, while the government is considering requiring factories to install rooftop solar panels.
It also plans to revise rules governing small residential solar systems.
Households with solar installations of less than 10 kilowatts (kW) are currently compensated for surplus power through credits that reduce future electricity bills, rather than through cash payments.
Under the proposed changes, households with systems of around 3 kW to 7 kW would be able to sell unused electricity and receive what Kim described as a modest source of “energy income”.
The government will also expand offshore wind power by adopting state-led site planning and closer project-by-project management to shorten development times.
Decisions on whether to build additional nuclear reactors or small modular reactors will be made after consultations with experts and the public and incorporated into South Korea’s 12th Basic Plan for Long-Term Electricity Supply and Demand.
South Korean Climate, Energy and Environment Minister Kim Sung-hwan at a briefing in Seoul on 5 August. Image: Ministry of Climate, Energy and Environment
Grid bottlenecks
South Korea also plans to change how it develops transmission infrastructure as electricity demand rises from semiconductor plants, AI data centres and other advanced industries.
Kim said a gigawatt-scale data centre typically takes two to three years to build, while the transmission infrastructure required to supply it can take at least five years and sometimes nearly a decade.
To narrow that gap, the government plans to build high-voltage transmission infrastructure of 345 kilovolts or more ahead of projected demand.
It will prioritise increasing capacity on existing transmission lines to minimise the need for new routes. New lines near residential communities could be placed underground to improve public acceptance.
The government is considering regional electricity tariffs for industrial users to reflect differences in local supply and demand, but does not plan to apply regional pricing to households.
Kim said the measure could encourage companies that generate significant economic value to relocate outside the Seoul metropolitan area.
A dedicated tariff system is also planned for AI data centres, taking into account their large and relatively stable electricity consumption and how they use the national grid.
Water for chip and AI projects
The government will also overhaul water supply systems for semiconductor factories, AI data centres and other advanced industries, Kim said in the same briefing.
It plans to connect water resources that have traditionally been managed separately for agricultural, power generation and municipal use, and expand pipelines linking dams and rivers so that surplus water can be transferred to areas facing shortages.
Treated wastewater will be reused for industrial purposes, while upgrades to regional water supply systems will seek to reduce losses from leaks.
The government estimates that a planned semiconductor cluster in the Honam region would require about 6.3 GW of electricity and 650,000 tonnes of water a day to operate four fabrication plants.
Kim said the required water could be supplied by drawing on eight dams in the Yeongsan and Seomjin river basins and potentially raising the capacity of Dongbok Dam.
The government is also considering reusing about 300,000 tonnes of treated wastewater from the roughly 550,000 to 600,000 tonnes of municipal water used daily in Gwangju.
Dam water would be reserved for semiconductor processes requiring ultrapure water, while recycled water could be used in production stages with lower water-quality requirements.
The ministry said repeated droughts in southern South Korea were unlikely to disrupt AI data centres or three major government-backed industrial projects.
It plans to strengthen emergency water transfers between existing systems, expand underground water-storage dams in drought-prone areas and increase the use of mobile seawater desalination equipment.
Cityscape in Seoul around sunset. Image: Mathew Schwartz on Unsplash
Electrification drive
South Korea is targeting electric vehicles to account for 50 per cent of new vehicle sales by 2030 and will support the conversion of taxis, rental cars and other commercial fleets.
The government also plans to electrify more public-sector vehicles, starting with police cars and later expanding to postal and fire-service fleets.
Delivery motorcycles, agricultural machinery, construction equipment and ships will also be included in the electrification drive.
In buildings, the government will expand heat pump installations. After launching a replacement programme for detached homes in the first half of this year, it plans pilot projects using water-source and air-source heat pumps to provide heating, cooling and hot water in apartment buildings.
It will also expand projects combining solar panels, electric vehicle charging, AI-enabled appliances and heat pumps in so-called zero-energy villages.
A broader “K-GX” strategy covering the green transformation of emissions-intensive industries, including steel, petrochemicals, refining, cement and semiconductors, is due to be announced in the third quarter.
The government will also raise the mandatory recycled-content requirement for plastic beverage bottles from 10 to 30 per cent by 2030 and strengthen climate disaster monitoring through AI-enabled surveillance cameras, digital twins and ozone forecasting.
“How we respond to and overcome this period will determine our future,” Kim said. “We will support major industrial projects with clean and stable supplies of electricity and water, while addressing the climate crisis through a green transition and a circular economy.”
