Korea's annual electricity consumption will reach as much as 694.1 terawatt-hours (TWh) by 2040, according to the government's official forecast. The figure is 11% higher than the 2038 peak power demand estimated in the 11th Basic Plan for Long-term Electricity Supply and Demand, with the increment equivalent to the annual output of seven large nuclear reactors. However, experts are divided over whether the future power demand presented for the first time by the Lee Jae-myung administration is appropriate.
The Ministry of Climate, Energy and Environment and the general committee for the 12th Basic Plan for Long-term Electricity Supply and Demand held a public debate on the 12th plan at the Korea Broadcasters Hall in Yangcheon-gu, Seoul, on Monday, unveiling the 2040 power demand forecast.
The electricity plan is a 15-year medium- to long-term blueprint drawn up every two years and is the top statutory plan in the energy sector. In particular, the latest plan, which covers the power supply and demand outlook through 2040, is the first such plan prepared by the Lee Jae-myung administration and is expected to serve as a gauge of the new government's power policy direction. The future power demand unveiled by the government will serve as a blueprint for setting the scale of each power source, including nuclear and renewable energy.
The government projected that annual target power demand (consumption), which stood at 549.4 TWh last year, will rise to between 657.6 and 694.1 TWh by 2040, 14 years from now. The result comes from analyzing power demand under two scenarios: a baseline scenario assuming the current economic growth trend is maintained and electrification policies are implemented as planned, and an upward scenario assuming optimistic economic growth and bold carbon neutrality implementation.
The increase is sharply steeper than in the previous plan, which covered the period through 2038. In the 11th plan, the government had projected 2038 target demand at 624.5 TWh, meaning the demand is now seen jumping 5.3% to 11.1% in just two years. The increment is equivalent to the annual output of three to seven large 1.4-gigawatt (GW) nuclear reactors operating at an 80% utilization rate.
Power demand is rising rapidly because demand from advanced industries, artificial intelligence (AI) data centers and electrification is expected to surge. Model-based demand, which measures consumption reflecting only existing trends such as economic growth, population and temperature changes, was estimated at 612.4 to 646.4 TWh for 2040, actually lower than the 655.5 TWh model demand projected for 2038 in the 11th plan. The decline reflects expectations of slower gross domestic product (GDP) growth.
However, additional demand beyond general trends is expected to increase significantly. Additional demand from advanced industries such as semiconductors was estimated at just 1.1 TWh for 2038 in the 11th plan, after peaking in the early 2030s and declining. This time, it is projected to reach 27.4 to 29.3 TWh by 2040.
Data center power demand, which was projected at 15.5 TWh for 2038 in the 11th plan, rose 1.7-fold to 26.5 TWh. As the 2035 Nationally Determined Contribution (NDC) for greenhouse gas reduction was set at 53% to 61% below 2018 levels, electrification demand also nearly doubled, rising from 63 TWh in 2038 to 112.6 to 119.4 TWh in 2040.
However, experts are divided over whether the demand forecast by the government and the general committee is an appropriate analysis. Shim Sung-hee, vice president of the Korea Energy Economics Institute, said, "Recent analyses by international organizations show that power demand is rising very rapidly across various sectors including AI, heat pumps and electric vehicles, and given that our government has also recently decided to raise the share of electricity in final energy consumption from 22% to 30%, this power demand forecast appears somewhat low."
In contrast, Choi Ji-won, secretary general of the Climate Change Center, said, "Downward demand risks from investment delays, efficiency gains and decentralization have not been reflected." She added, "While there is no need to view increasing additional demand solely in a negative light, when power demand rises, it must be clearly determined at what cost and in what manner it will be met."
Yoo Seung-hoon, a professor at the Department of Future Energy Convergence at Seoul National University of Science and Technology, suggested, "If there are baseline and upward scenarios, there should also be a downward, or deceleration, scenario. There is also a need to disclose how future electricity rates, one of the key factors in the demand forecast, have been projected."
