SoftBank CEO’s warning highlights Korea’s energy insecurity in AI era

President Lee Jae Myung, right, meets with SoftBank Group Chairman Masayoshi Son at the presidential office in Yongsan District, central Seoul, on Dec. 5. [PRESIDENTIAL OFFICE]

 
SoftBank Chairman Masayoshi Son recently warned President Lee Jae Myung that Korea’s “critical weakness is energy” as it heads into the AI age.
 
The International Energy Agency (IEA) echoed similar concerns in its latest Energy Policy Review of Korea, released on Nov. 25, stating, ” Substantial investments in new, diverse sources of electricity supply alongside reliable and resilient network infrastructure will be needed” to keep pace with growing demand and system stability needs.
 
According to the report, Korea is a classic case of an “isolated grid” with no connections to neighboring countries, meaning it cannot buy or sell electricity across borders like in Europe. As solar and wind power expand — sources with fluctuating output — Korea must balance supply and demand internally, increasing the costs of ensuring grid stability.
 
Geographic constraints further complicate matters. With a long north-south axis and a narrow east-west span, the country experiences sunrise and sunset almost simultaneously from coast to coast, limiting the time-zone advantages seen in large landmass countries like the United States or Australia. Over 70 percent of Korea’s land is mountainous, and the country has one of the world’s highest population densities, making it difficult to secure sites for renewable energy facilities.
 
Wind power projects, in particular, often face delays due to concerns about forest damage, disputes over visual impact, military radar interference, bird strikes and noise complaints. Building transmission lines also takes years due to environmental assessments, resident opposition and land compensation disputes. The IEA labeled these issues “bottlenecks” due to the geography and structure of energy supply unique to Korea.
 
The agency concluded that such conditions slow the expansion of renewables while undermining grid reliability. Even with similar facilities, Korea faces higher costs and slower progress due to physical limitations and lower public acceptance. Son’s remark comparing Korea and Japan as countries that are “geographically and structurally disadvantaged in securing energy” reflects these factors.
 

An electricity pylon is seen in Yeongdeungpo District, western Seoul, on Aug. 7, 2023. [NEWS1]

Son especially emphasized that while Korea has world-class competitiveness in AI and semiconductors, it remains vulnerable in securing cheap and stable electricity — a “weak link” that could jeopardize its goal of becoming a global top-three AI power. Without a strong energy base, the coming age of artificial superintelligence (ASI) may expose foundational risks.
 
Compounding the issue is the structure of the electricity market. Korea Electric Power Corporation (Kepco) controls generation subsidiaries, transmission, distribution and retail, while the government regulates consumer electricity prices. Rates remain below the OECD average, but this has reduced investment incentives, as fuel and carbon costs are not fully reflected in prices. Kepco’s debt, meanwhile, has surpassed 200 trillion won ($136 billion).
 
As solutions, the IEA called for a diversified power portfolio and structural reforms. These include building a “renewable portfolio standard” that combines nuclear power, renewables, hydrogen and energy storage systems; establishing an independent regulator to oversee the electricity, gas and hydrogen sectors; and implementing national land-use planning to reduce siting conflicts over renewables, transmission lines and hydrogen infrastructure.
 

Shin-Kori Units 3 and 4, along with Unit 5 under construction, are seen at Shin-Kori Nuclear Power Plant in Ulju County, Ulsan, on Nov. 9, 2022. [YONHAP]

The government’s power mix strategy, however, remains ambiguous. While it has pledged to expand renewables, its position on scaling up nuclear power to meet the anticipated surge in AI-related electricity demand remains unclear. Although the IEA proposed positioning nuclear as a core pillar of Korea’s energy security and carbon neutrality — and recommended building a demonstration site for small modular reactors (SMRs) — the government has instead reignited public debate even over the two new nuclear reactors included in the current long-term energy plan. Concerns have emerged that nuclear projects may be shelved altogether in the next energy plan, now under development.
 
“Expanding renewables alone won’t guarantee sufficient electricity when it’s needed,” said Moon Joo-hyun, an energy engineering professor at Dankook University. “If you’re going to invest in AI, data centers and GPUs, you also need to present accompanying infrastructure plans, including power and cooling water.”
 
“Japan has sent a clear message that the state is responsible for electricity by restarting nuclear plants and expanding liquefied natural gas,” said Yoo Seung-hoon, a professor of energy policy at SeoulTech. “Korea, too, needs to clarify its direction for power mix and grid investment, so that companies can believe this is a country where electricity will be reliably supplied.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM WON [[email protected]]