[Edaily Reporter Kim Hyung-wook ] As efforts are underway to expand private-sector participation in the national power grid construction project—which #KoreaElectricPower Corporation (KEPCO) has long managed—amid delays in the project, experts have assessed that simply allowing private participation will not be enough to resolve the current power grid bottlenecks.
They argue that while private-sector participation should be allowed on a limited basis for certain projects that KEPCO cannot handle alone, the government and KEPCO must ultimately take the lead in resolving issues related to community acceptance.
Cho Hwan-ik, a special professor at Hanyang University (and former president of KEPCO), stated at a forum hosted by the National Assembly Climate Change Forum on the 16th at the National Assembly Members’ Office Building—which focused on opening up power grid expansion to the private sector—that “while power grid construction is urgent, I am skeptical of the expectation that the private sector will be better able to resolve community acceptance issues during the construction of the national transmission grid than KEPCO.” “While semiconductor and data center operators, who are in desperate need of power supply, may participate in the construction of bottleneck sections, public enterprises such as KEPCO must take the lead,” he said.
At its plenary session last May, the National Assembly’s Committee on Climate, Energy, Environment, and Labor passed partial amendments to relevant laws, including the Special Act on the Expansion of the National Transmission Grid, which outlines provisions for private-sector participation in power grid construction projects. If these amendments pass the National Assembly’s plenary session as originally proposed, private companies—whose participation in power grid projects has been restricted until now—will be able to undertake such projects following deliberation by the National Transmission Grid Expansion Committee. The intent is to leverage the unique drive of private companies, as KEPCO—being a public enterprise—lacks the flexibility needed to address issues such as securing community acceptance during project implementation.
However, President Cho viewed that, realistically, private-sector participation should be limited to expanding roles in power grid construction, capital investment, and distribution networks and customer-dedicated networks. The reason is that even with private-sector involvement, it is unlikely that the issue of community acceptance—the greatest challenge in power grid construction—will be dramatically resolved. President Cho emphasized, “The three conditions for enhancing community acceptance are trust, cooperation from local governments, and sufficient compensation—not private-sector participation.”
Professor Yoo Seung-hoon of the Department of Future Energy Convergence at Seoul National University of Science and Technology also suggested that while private sector participation in power grid projects should be permitted, its scope should be limited.
He said, “Limited participation—specifically applying the BT (Build-Transfer) model, where the private sector constructs certain bottleneck projects that KEPCO finds difficult to complete on time and then transfers them to KEPCO—is a practical solution that can accelerate power grid construction while avoiding controversies such as power grid privatization.” He continued, “KEPCO should handle projects it is capable of managing, while leveraging the private sector’s creativity and capital for certain sections of projects that KEPCO finds difficult to undertake,” adding, “The BT model could be prioritized in areas where the social costs resulting from power grid delays outweigh the increased costs associated with private sector participation.”
Lee Dae-yeon, Director of the Electricity Policy Research Division at the Korea Energy Economics Institute, also noted, “While the private sector may be able to respond more flexibly to compensation and public complaints, this alone cannot fundamentally resolve the issue of community acceptance.” He added, “We also need to consider shifting from KEPCO’s ‘push’ approach—where it forces through transmission line routes—to a ‘pull’ approach, where local residents apply to host the projects.”
Jeong Jae-ryong, Director of the Infrastructure Grid Business Team at GS Engineering & Construction Corp—a private construction firm—also cited a precedent where the company abandoned a 1 trillion won data center project due to public complaints. He explained, “Private companies lack land expropriation rights, so ultimately, they have no means of addressing complaints other than compensation. A realistic division of labor would be for KEPCO to handle land acquisition and site selection, while the private sector handles design and construction.”
Director Jeong also proposed a phased implementation—first conducting a single Design-Procurement-Construction (EPC) bid to address any issues before expanding to BT—or a “local government BT” model, in which local governments invest in and construct transmission grids before transferring them to KEPCO.
In response to these proposals, an official from the Ministry of Climate Change’s Power Grid Policy Division emphasized, “This is not based on the premise that the private sector is better at building power grids than KEPCO, but rather aims to accelerate the overall construction pace by sharing the workload and handling public complaints.” The official added, “While individual project costs may increase with private sector participation, there could be national benefits if construction delays are reduced and the reliance on expensive power sources is minimized.” Kim Jae-gun, Executive Vice President of KEPCO’s Power System Headquarters, elaborated, “The introduction of BT is not a full-scale opening of the power grid but a temporary measure to share the concentrated construction workload expected in the early 2030s,” adding, “We have no plans to open power grid operations to the private sector.”
Han Jeong-ae, Chair of the Policy Committee of the Democratic Party of Korea and the representative lawmaker of the National Assembly Climate Change Forum, which hosted the event, emphasized, “The Southwest Semiconductor Cluster also faces a situation where power generation sites and consumption areas are far apart, making it difficult to avoid transmission grid construction and conflicts with local residents.” She added, “The government must not stop at declaring that ‘there are no problems with power supply’ but must present a concrete implementation plan that reflects permitting processes and community acceptance.”
