Lee Jae-myung, a candidate for the Democratic Party of Korea's presidential primary and former leader of the Democratic Party of Korea, has stated plans to establish an "energy highway," garnering attention for a report released by the Democratic Research Institute, the party's think tank, in October last year. In the report titled "Why an Energy Highway?," the Democratic Research Institute claimed that an "energy highway" is necessary to rapidly and reliably deliver distributed renewable energy resources across the country to the places where they are needed.
In the energy sector, building transmission and distribution networks is an urgent issue, but there are concerns over how to secure funding, as the Korea Electric Power Corporation (KEPCO) is currently unable to invest due to financial difficulties. KEPCO's financial troubles have worsened because the government of Moon Jae-in did not raise electricity rates while promoting policies to phase out nuclear power and expand renewable energy, leading to an analysis that both expanding renewable energy and establishing an energy highway would be difficult to achieve simultaneously without increasing electricity rates. Since 2021, KEPCO's accumulated deficit has reached 34.7 trillion won by the end of last year.
On the 24th, Lee stated, "We will start constructing a West Coast energy highway by 2030, transmitting 20 gigawatts of southwestern offshore wind power to key industrial areas through an offshore power grid, and expanding RE100 industrial complexes nationwide." RE100 refers to corporations sourcing 100% of their power needs from renewable energy.
Lee further stated, "We will begin construction of a U-shaped Korean peninsula energy highway aimed for completion by 2040, creating a marine network across the Korean Peninsula and connecting the power grids of Honam and Yeongnam, as well as offshore wind power along the East Coast, to establish a new energy paradigm."
Establishing power transmission and distribution networks is an urgent issue. Eco Power and Samcheok Blue Power, GS Donghae Power, and Samcheok Green Power in Gangwon Province have invested billions of won in building power plants but are unable to generate electricity due to the lack of a transmission network. The Hanul and Shin Hanul nuclear power plants in Gyeongbuk are also underutilized due to transmission network issues.
The delay in building transmission and distribution networks is due to KEPCO's financial difficulties and opposition from local residents. KEPCO has accumulated deficits while unable to raise electricity rates, despite pushing forward with the Moon Jae-in government's nuclear phase-out and renewable energy expansion policies. KEPCO purchases electricity from power producers to sell to corporations and households, but had to reduce purchases of cheaper nuclear power while increasing purchases of more expensive renewable energy, all while selling electricity at low prices.
The construction of transmission and distribution networks for renewable energy incurs higher expenses than that for nuclear or thermal power plants. Wind power plants must be located where winds are abundant, and solar power plants must be placed in areas with strong sunlight, resulting in longer distances to deliver electricity to where it is needed.
According to KEPCO, the cost to construct a power line is about 3 billion won per kilometer based on a 345 kV standard. If there is a tunnel in the middle, costs can increase by up to 13 times. As the Democratic Research Institute mentioned in its report, transmitting renewable energy produced in the Honam region to the metropolitan area would require billions of won. For instance, the straight-line distance from the Yeongwang Wind Power located in Jeollado's Yeonggwang County to the LG Energy Solution factory in Okseong-myeon, Cheongju, North Chungcheong Province is 209 km, requiring approximately 627 billion won based on simple calculations.
Moreover, renewable energy generation is inconsistent, requiring additional facilities such as energy storage systems (ESS) to fully utilize transmission and distribution networks. An anonymous university professor noted, "It is reckless to claim that we will build an energy highway to transmit intermittent renewable energy in bulk."
Opposition from local residents in areas where transmission and distribution networks will pass is also a variable. KEPCO decided to expand high-voltage direct current (HVDC) conversion facilities in Hanam, Gyeonggi Province, to bring East Coast electricity to the metropolitan area, but after residents opposed it, the city of Hanam denied the permit application. KEPCO has since filed an administrative appeal against Hanam City.
One university professor stated, "The reason KEPCO has not invested in the power grid so far is that it has funded renewable energy subsidies, leading to a shortage of capital," and added, "Even if an energy highway is necessary, solutions regarding how much the associated expenses will be and how much electricity rates will rise must come first."