The government is moving quickly to establish a new 'Power Regulatory Agency' that will oversee the electricity market and manage the power system. This initiative aims to overhaul power governance in response to the increasing demand for electricity in the era of 'electric nations,' driven by sectors such as semiconductors and artificial intelligence (AI) data centers.
The Ministry of Climate, Energy and Environment announced on July 22 that it will co-host a forum on 'Innovating Power Governance' with lawmakers Park Ji-hye and Seo Wang-jin at the National Assembly's member's office building.
This forum is intended to build consensus among the National Assembly, government, and experts on the necessity of establishing the Power Regulatory Agency ahead of discussions on amending the Electricity Business Act in the second half of the year. It follows ongoing discussions since April regarding the reform of the power regulatory system.
The government believes that innovation in the power supply system is essential to support the three mega-projects announced in June, which include semiconductors, physical AI, and AI data centers.
To address the increasing use of renewable energy sources like solar and wind, as well as the rise of AI data centers, the government has determined that it is necessary to proactively revise the technical standards for power systems, known as 'grid codes,' and establish a system to oversee them. The existing regulatory framework is deemed insufficient due to the growing number of private operators and new transaction forms such as Power Purchase Agreements (PPAs), Virtual Power Plants (VPPs), and distributed energy special zones.
Additionally, while the demand for utilizing power data is increasing with the spread of AI, the differing data standards and disclosure methods among institutions make integrated use challenging, and there is a lack of a comprehensive management system.
Once established, the Power Regulatory Agency is expected to serve as an independent regulatory body responsible for managing technical standards (grid codes), overseeing the electricity market, and managing power data. This will create a four-tier power governance structure that includes policy formulation by the Ministry of Climate, Energy and Environment, deliberation and decision-making by the Electricity Commission, investigations and oversight by the Power Regulatory Agency, and execution by Korea Electric Power Corporation and the electricity trading market.
During the forum, experts will present on topics such as improving grid codes, the electricity market oversight system, and reforming the power information disclosure system. The government plans to incorporate the feedback from the forum into its efforts to amend the Electricity Business Act and support legislative discussions for the establishment of the Power Regulatory Agency.
Kim Chang-seop, chairman of the Electricity Commission, stated, 'While the number of market participants has surged, the rules are outdated, and the oversight system is unable to keep pace with market changes. There is a need for an independent body that can proactively improve technical standards, monitor the market fairly, and manage power information transparently.'
* This article has been translated by AI.
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