A mismatch between power generation and transmission infrastructure is emerging as a serious risk to South Korea's economy, with plants unable to deliver electricity because the lines to carry it do not exist. Slow expansion of the transmission network has forced payouts of more than 3 trillion won to generators that could not produce electricity over the past five years, adding to the electricity bills households pay.
The bigger problem is that this chronic bottleneck is now reaching the advanced semiconductor, petrochemical and biotechnology industrial complexes that the country is counting on for future growth. Progress on dedicated transmission networks for major industrial complexes, projects worth trillions of won, stands at just 1 to 20 percent, raising the prospect that factories will be built only to sit idle for lack of power.
Electricity that went unproduced because of transmission constraints totaled 112,430 gigawatt-hours from 2021 through the first half of this year, according to a report on public institutions released on the 23rd by the National Assembly Budget Office. Korea Electric Power Corp. paid out a combined 3.1651 trillion won in make-up payments over that period to compensate generators whose units were kept offline, regardless of whether they actually produced power.
Grid Build-Out Takes 9 to 13 Years, With Local Resistance Adding to Rate Pressure
Twelve power plants nationwide currently face output restrictions because of transmission facility problems. At the Taean coal-fired plant in South Chungcheong Province, 43,590 gigawatt-hours of planned output — 24.9 percent of the total — had to be abandoned between 2021 and June of this year. Seven plants in the Gangwon region have likewise absorbed a reduction of 22,310 gigawatt-hours over five and a half years because of transmission delays.
The root cause is that grid expansion cannot keep pace with plant construction. Solar and other generation facilities take one to three years to build, coal plants five to seven years and nuclear reactors seven to nine years. High-capacity 345-kilovolt transmission lines, by contrast, take an average of nine to 13 years from site selection through conflict mediation to completion. A 500-kilovolt high-voltage direct current project to carry large volumes of power from the east coast to the capital region has stalled after the city of Hanam refused to allow expansion of the East Seoul converter station, saying permits could not be issued without residents' consent. The 345-kilovolt line linking the Dangjin coal plant with the Sinseokmun and Sinsongsan substations has also been held up by prolonged disputes with residents, including fears about electromagnetic radiation, and is now expected to be completed in 2028 — seven and a half years later than the original target of June 2021.
The infrastructure mismatch feeds directly into costs for ordinary consumers. The trillions of won KEPCO has paid out for electricity it never received are reflected in its power purchase costs, making them a key driver of the total cost base used to set electricity rates.
Dedicated Grid Progress Stuck at 1 Percent as Yongin, Songdo and Yeosu Sound Alarm
The shortage of transmission capacity on the supply side is now spreading to dedicated networks for the national industrial complexes that will draw enormous amounts of power, deepening the sense of crisis. The most serious case is the Yongin advanced system semiconductor cluster, set to become the world's largest single chipmaking site. The government and the industry have set operational targets of 2027 for SK hynix's general industrial complex and 2029 for Samsung Electronics' national industrial complex, assuming early start-up.
Yet the Yongin transmission project, which will spend 3.7 trillion won to build 14 lines at the 345-kilovolt level, was only 1 percent complete as of the end of 2025, with 19.4 billion won disbursed. Annual spending plans call for just 49.7 billion won over the next four years, from 2026 through 2029, while 98.6 percent of the remaining budget is concentrated after 2030 — leaving little prospect of meaningful progress for some time.
Other key industrial complexes are in the same position. The transmission project for the Yeosu national industrial complex, targeted for completion in September 2030, has disbursed only 7 million won of its total budget and is barely 5 percent complete. A project tied to the Songdo biotechnology cluster has received 330 billion won but remains 20 percent complete. The government is seeking to compress total construction time to nine years through a special law, but with completion targets for Songdo in 2028 and Yeosu in 2030 only two to four years away, finishing work that has only just left its initial stages is seen as virtually impossible within the deadline.
Experts say the outdated system under which generation facilities are built by power producers and transmission lines by KEPCO, on separate tracks, must be overhauled. Lawrence Berkeley National Laboratory, a U.S. Department of Energy facility, has recommended a proactive approach that identifies areas needing transmission in advance and plans construction accordingly. There are also growing calls to build a system of local generation for local consumption, producing energy in the regions where it is used, to overcome the imbalance between large production sites and the areas that consume the power.
The budget office said current progress remains at an early stage, raising the possibility that power will not be supplied when demand materializes, and that thorough management is needed because delays in grid expansion can lead to generation constraints and the settlement costs that follow. KEPCO said all the agencies involved would cooperate to ensure that power is supplied to the national industrial complexes without schedule disruptions.