Lee Jaemyung's 'Energy Highway': Technology and Financial Challenges Loom [New Administration Policy Issues]

"We will build a renewable energy highway that connects the entire Republic of Korea."

The core of President Lee Jaemyung's energy pledge is to connect the Korean Peninsula with a "renewable energy highway." The plan is to link the entire country in a U-shaped offshore wind power grid, starting from the west coast and running along the southern and eastern coasts, and to connect this network to industrial complexes using high-voltage direct current (HVDC) transmission. However, the reality presents significant challenges. There are ongoing conflicts over offshore wind power site selection and difficulties in securing public acceptance. In addition, key technologies such as HVDC are still largely dependent on foreign countries. The total project cost is expected to reach several tens of trillions of won, but specific funding measures have yet to be outlined. Some experts point out that a solid foundation must come before speed.

According to President Lee's campaign pledge released on June 19, the plan is to prioritize the construction of the west coast power grid by 2030 and expand it nationwide by 2040. The key is to connect major power demand sites and industrial complexes across the country with HVDC, and to implement a next-generation distributed power system by integrating information and communication technologies (ICT) such as artificial intelligence (AI) and big data.

The first step is to build concentrated offshore wind power complexes in the Jeonnam, west coast, and Jeju sea areas, and to supply renewable energy stably through a national backbone network. In particular, the strategy is to attract national-level investment in large-scale offshore wind projects and introduce community participation models to simultaneously boost the local economy and secure public acceptance.

Additionally, the government plans to establish an offshore wind power-centered "RE100 Industrial Belt" connecting the waters off Incheon, the southern coast, and the east coast of North Gyeongsang Province. The aim is to increase the utilization of renewable energy produced in the Seoul metropolitan area by linking it to local industries, and to improve conditions for small-scale distributed power sources to participate in the electricity market. President Lee also proposed developing distributed power sources into an "integrated power plant (VPP)" system by connecting them with local data centers and V2G (vehicle-to-grid) systems.

President Lee also attended the "Future of Energy Security" expanded session at the G7 Summit the previous day, where he emphasized the importance of "diversifying energy supply chains" and "AI-energy integration."

President Lee stated, "With the advancement of AI technology, electricity demand is surging, while energy supply chains are being threatened by climate variability and geopolitical instability," adding, "It is crucial to ensure robust energy security and stabilize the supply of critical minerals." He presented increasing the share of renewable energy using domestic resources and constructing an "energy highway" as strategies for building the energy system.

There are expectations that this could improve the stability of power supply and price competitiveness, but many assessments indicate that the foundation remains insufficient. The most immediate challenges are conflicts over offshore wind power site selection and public acceptance. A representative example is the 8.2GW offshore wind power complex in Sinan, Jeonnam. Although it drew attention as the largest renewable energy project in Korea, residents demanded the suspension of the project due to concerns over infringement of fishing rights, electromagnetic waves, and landscape damage, which caused delays in the project.

The Ministry of Trade, Industry and Energy oversees the overall power grid plan, but actual site selection, resident compensation, and permitting are handled by local governments. As a result, differences between central and local governments have repeatedly rendered plans ineffective in practice. For example, in August last year, the Ministry of Trade, Industry and Energy announced a policy of "preemptive power grid construction" to expand the power grid in the Honam region, but construction of transmission lines was delayed several times due to non-cooperation from local governments in Jeonnam and Gwangju. The government officially expressed concern, stating that "non-cooperation from local governments could adversely affect the spread of renewable energy."

The technological foundation is also unstable. In the case of HVDC, some localization is underway, but large-scale converter stations and key equipment still depend on foreign technology. Foreign companies are also the main suppliers for the demonstration project between Jeju and Wando. The reliability of energy storage systems (ESS) has declined due to a series of fire incidents since 2017, and the V2G-based power grid remains at the demonstration stage because institutional arrangements are inadequate.

The financial burden of the project is also significant. According to the industry, building 1GW of offshore wind power requires about 3 to 4 trillion won. Including transmission networks, submarine cables, converter stations, and connection systems, the total project cost could reach 100 trillion won. However, the government has not yet presented specific funding methods or phased budget plans related to this pledge.

The industry warns that pushing ahead without a solid foundation is risky. An industry official noted, "Such large-scale renewable energy projects can only work if four pillars?technology, institutions, social acceptance, and finance?are aligned," adding, "Emphasizing only the vision will not lead to a sustainable energy transition."

A government official stated, "Whether this will become a future national agenda and how it will be implemented must be reviewed with the relevant ministries," adding, "We plan to set a realistic direction for implementation by comprehensively considering technology, permitting, and financial conditions."