The South Korean government plans to lower electricity rates during peak solar generation hours between 11 a.m. and 3 p.m. while raising rates from 6 p.m. to 9 p.m. after sunset. The government also intends to offer additional discounts on spring and fall weekends, when factories typically do not operate, to encourage demand distribution.
According to industry sources on the 24th, the government will finalize the seasonal and time-of-use rate reform plan soon. The core of the reform is to significantly lower rates when electricity supply exceeds demand and raise prices when supply is tight. The changes will first apply to large-volume consumers such as industrial users and electric vehicle charging stations, not residential households.
Specifically, the government is reviewing plans to reduce electricity rates from peak-load pricing to mid-load pricing for the 11 a.m. to noon and 1 p.m. to 3 p.m. time slots, which were previously classified as maximum-load periods due to high usage. Conversely, rates for 6 p.m. to 9 p.m., currently charged at mid-load prices, will be raised to peak-load rates. The move aligns with the renewable energy expansion policy by lowering daytime rates when solar power generation is available and increasing evening rates after sunset.
The government is also considering a three-year pilot program offering concentrated discounts on spring and fall weekends and public holidays when electricity demand drops sharply. During spring and fall, when good weather significantly increases solar power generation, substantial electricity goes to waste. The weekend discounts aim to boost consumption during these periods. However, the specific rates for time-based surcharges and weekend discounts have not yet been determined.
Traditional manufacturers such as steel and cement companies with high daytime factory utilization rates are expected to benefit from lower rates under the reform. Petrochemical companies operating factories 24 hours a day year-round are also expected to see reduced electricity costs as discount hours are extended. However, companies with high nighttime factory operations will inevitably face increased costs.
Minister of Climate, Energy and Environment Kim Sung-hwan said at a New Year press conference on the 9th, "If we introduce a rate system that considers the high solar power production during the day, most companies will benefit."
The government also plans to introduce regional differential electricity pricing to encourage companies to relocate to provincial areas. "We will promptly introduce regional pricing so that companies operating where electricity supply is concentrated can receive rate benefits," Minister Kim said. "Facilities operating 24 hours far from the Seoul metropolitan area will relatively benefit when regional pricing is introduced."
