Next Year's Renewable Energy Budget Set at 1.2 Trillion Won... Increased Funding for Next-Generation SMR

Ministry of Trade, Industry and Energy Doubles Budget for Renewable Energy Financial Support
Nuclear Power Budget, Including SMR, Up 6.2%
Ministry of Science and ICT Cuts i-SMR Budget
Increased Funding for Next-Generation Non-Light-Water Reactor Development

Moon Sunhak, First Vice Minister of the Ministry of Trade, Industry and Energy, is explaining the 2026 budget plan at the Ministry of Trade, Industry and Energy press room on September 1, 2025. Photo by Ministry of Trade, Industry and Energy

In line with the national policy direction of the Lee Jaemyung administration, which pledged to expand renewable energy, next year's budget for renewables such as solar and wind power will see a significant increase. Budgets for carbon neutrality initiatives, including hydrogen and carbon capture, utilization, and storage (CCUS), will also rise. Funding for research and development (R&D) of small modular reactors (SMR), the next generation of nuclear power plants, has also been increased.

According to the 2026 budget plan released by the government on September 1, 2025, the Ministry of Trade, Industry and Energy's 2026 budget for renewable energy will reach 1.2703 trillion won, up by 374 billion won (42%) from 897.3 billion won in 2025. The ministry stated, "Following the supplementary budget of 113.8 billion won in July, the significant increase in next year's budget is expected to boost facility investment and advanced research and development in the renewable energy sector."

Specifically, a total of 850.1 billion won has been allocated to the "Renewable Energy Financial Support Program" and the "Renewable Energy Supply Support Program" to promote the adoption of renewable energy. The financial support program will double from 326.3 billion won this year to 648 billion won next year, marking the largest scale ever. This funding will be used for financial support in areas such as RE100 industrial complexes, agrivoltaics, solar and wind pensions, and the expansion of offshore wind power.

The budget for the renewable energy supply support program will increase from 156.4 billion won in 2025 to 202.1 billion won next year.

The budget for the core technology development project for renewable energy will rise from 314.1 billion won this year to a record 335.8 billion won next year. This will be used to secure advanced technological capabilities in the solar and wind power sectors, such as ultra-high-efficiency tandem solar cells and large wind turbine blades exceeding 20 megawatts (MW).

The budget for the next-generation renewable energy standardization and certification advancement innovation support project has also been set at 5.6 billion won, up 180% from 2 billion won last year.

The budget for the development of high-voltage direct current (HVDC) transmission technology, a key technology for the early construction of the West Coast power grid in the 2030s and the completion of the U-shaped Korean Peninsula power grid in the 2040s, has also increased. The development project for 500-kilovolt (kV) class voltage-type HVDC converter transformers received a supplementary budget of 6 billion won this year, and 12 billion won has been allocated for next year.

To address the intermittency and grid constraints of renewable energy, a new next-generation distributed power grid project will be launched in 2026 with a budget of 119.6 billion won to install energy storage systems (ESS) in distribution networks and control power supply and demand. Additionally, a new AI-based distributed energy specialized regional support project has been allocated 10 billion won for 2026.

The Ministry of Trade, Industry and Energy's nuclear power budget for 2026 will be 519.4 billion won, up 30.5 billion won (6.2%) from 2025. The ministry stated, "We plan to focus on fostering the next-generation SMR industry," adding, "To secure a leading position in the global SMR manufacturing market, we will newly promote the localization of innovative manufacturing technologies, complete development by 2031, and begin building a center for SMR manufacturing parts testing and inspection."

In addition, 8.1 billion won has been newly allocated for the SMR Innovative Manufacturing Localization Technology Development Project, and 1.5 billion won for the project to establish a demonstration base for the radiation environment. The ministry stated, "We plan to establish the foundation for the nuclear decommissioning industry by demonstrating technologies and equipment to be used in decommissioned nuclear power plants and training specialized personnel."

The energy voucher budget for 2026 has been increased by 15.8 billion won year-on-year to 517.2 billion won.

For the Ministry of Science and ICT, the budget for innovative SMR (i-SMR) will decrease, but the budget for R&D of next-generation non-light-water SMRs will increase.

An official from the Ministry of Science and ICT explained, "The budget for i-SMR support, which will continue until 2027, will naturally decrease from a peak of 53 billion won this year to 37.4 billion won next year."

Instead, the budget for R&D of non-light-water SMRs, such as molten salt reactors, high-temperature gas-cooled reactors, and sodium-cooled fast reactors, will increase from 15.7 billion won this year to 21.26 billion won next year. The official added, "In addition, we have secured the necessary budgets for nuclear safety and nuclear decommissioning."

The Ministry of Science and ICT's budget for carbon neutrality technology development will increase from 88.2 billion won this year to 131.9 billion won in 2026. The official explained, "The 2026 budget plan newly includes three projects for carbon capture and utilization (CCU) technology development, such as direct air capture (DAC), two projects for new energy technology development including hydrogen, and the development of perovskite solar cell technology."