Delays in building transmission networks have left 112,430 gigawatt-hours of electricity unproduced over the past five years, even though the power plants were already built. According to the National Assembly Budget Office on the 22nd, 12 power plants have the capacity to generate electricity but sit idle because transmission lines have not been laid. The country is leaving generation facilities unused at a time when the artificial intelligence industry's power demand is exploding. On top of that, KEPCO (015760) must pay annual compensation for lost expected profit, known in Korean as "gidae iik jeongsan-geum," even to plants that cannot produce electricity. From 2021 through the first half of this year, such payments have totaled 3.1651 trillion won. The financial burden piling up at KEPCO from these losses will ultimately be passed on to the public through higher electricity bills.
The mismatch behind this massive loss of power and waste of public funds is the delay in building transmission networks. Generation facilities such as solar plants take one to three years to build, but high-capacity transmission lines take nine to 13 years because of procedures ranging from site selection and land acquisition to environmental impact assessments, consultations with residents and conflict mediation. Of the 104 transmission and substation construction projects under the seventh through 10th basic plans for electricity supply and demand, fewer than 20% were completed by their target dates. The transmission project meant to supply power to the Yongin semiconductor cluster has a completion target of December 2036, yet its progress rate stood at about 1% as of the end of last year. At this pace, it will be difficult to support the power demand of the AI and semiconductor industries, where the race for speed is intense.
Expanding the power grid is now essential to national survival. Without transmission lines capable of delivering enough electricity, the advanced production bases being built by Samsung Electronics (005930) and SK hynix (000660) will not be able to function properly, and national security cannot be assured either. Goldman Sachs, the global investment bank, has pointed to a shortage of power infrastructure as the biggest obstacle to AI growth. Public harm from wasted spending will also snowball. To achieve the government's goals of becoming one of the top three in AI and top two in semiconductors, and to secure future growth and economic stability for households, the country must stake everything on building out the power grid without disruption. Bold government decisions are urgently needed, including streamlining permit procedures and measures to mediate conflicts with residents.