KEPCO CEO urges tariff hike discussion to fund 113T KRW grid expansion
During the October 19, 2026, parliamentary audit, KEPCO CEO Kim Dong-cheol advocated for discussing electricity tariff increases to fund an estimated 113 trillion KRW in grid investments by 2038, citing the company's 210.7 trillion KRW debt as of June 2026. This investment is crucial for expanding transmission and distribution networks to meet rising demand from semiconductors and AI data centers.
Our take
Will Korea's grid funding gap raise costs or delay connections for solar, wind and storage?
It raises both risks but settles neither: KEPCO has no agreed funding source for grid expansion, and generators will bear inverter upgrade costs in principle, with any recovery through power purchase not defined.
On cost, the CEO's answer puts inverter upgrades on generators first, so the open question is the size and timing of any recovery, not who pays upfront. On delay, the CEO called continued reliance on borrowing undesirable and said tariff increases have not been discussed with the government in detail, so the pace of grid investment now depends on a funding decision that has not started. What decides both is whether the government approves tariff increases or other funding, which this audit did not settle.
What the source says
- Democratic Party lawmaker Ahn Ho-young questioned the increased grid investment costs from the 12th Electricity Basic Plan and KEPCO's financial measures.
- Democratic Party lawmaker Kim Joo-young emphasized the need to reinforce inverter voltage control capabilities and grid stability, citing the Iberian Peninsula blackout.
- KEPCO CEO Kim Dong-cheol stated that inverter performance improvement targets would expand, with related costs principally borne by generation businesses but also considered in power purchase processes.
- People Power Party lawmaker Kim Wi-sang criticized KEPCO for requesting 25 trillion KRW in advance electricity payments from Samsung Electronics and SK Hynix, which were rejected.
- Kim Wi-sang also criticized KEPCO for failing to properly calculate cost changes from reducing transmission towers and expanding underground cabling, demanding reflection in the 12th long-term transmission/substation plan.
- People Power Party lawmaker Kim Ki-hyun questioned the effectiveness of the Future Response Fund, noting 940.5 billion KRW allocated for KEPCO-related projects next year, including 500 billion KRW as KEPCO's capital contribution, but lacking detailed usage plans and clear implementers for some projects.
- KEPCO CEO Kim Dong-cheol stated that relying on external borrowing for funding grid investments is undesirable.
For investors — Solar and wind developers: Budget for inverter upgrades as a likely cost for plants within the expanded scope, and treat compensation through power purchase as unconfirmed until rules are published.
Lenders: Treat KEPCO's funding position as a schedule risk for connections that depend on new transmission; check whether a project's connection relies on reinforcement that is not yet funded.
Watch: Announcement of specific plans for electricity tariff adjustments or government financial support for KEPCO's grid investments.
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