Korea to allow private firms to build national power grid via Build-Transfer model
The Korean National Assembly passed the National Key Power Grid Expansion Special Act in August 2026, enabling private companies to participate in building national power grid infrastructure. This law introduces a Build-Transfer (BT) model, where private entities construct facilities and immediately transfer them to KEPCO for ownership and operation.
Our take
How will Korea's new special act accelerate grid expansion and what role will private capital play?
This new Build-Transfer (BT) framework shifts the upfront capital expenditure and construction risk for national grid expansion from KEPCO to private developers, while KEPCO retains long-term operational control and ownership.
The traditional KEPCO-centric model for grid construction has proven too slow to meet the escalating demand from renewable energy projects, AI data centers, and advanced industrial facilities. By allowing private entities to finance and build these critical infrastructure projects, the government aims to accelerate development timelines. However, the immediate transfer of assets to KEPCO means private developers cannot monetize long-term ownership or operational efficiencies, focusing their returns on the construction phase.
What the source says
- The National Key Power Grid Expansion Special Act allows non-transmission operators to become project implementers for national key power grid development projects, upon designation by the Climate, Energy, and Environment Minister.
- Under the Build-Transfer (BT) model, private entities will construct power grid facilities and immediately transfer them to KEPCO upon completion.
- The existing system, where KEPCO alone constructs the grid, is struggling to meet the surging connection demand from renewable energy, AI data centers, and advanced industries.
- The speed of securing power infrastructure is becoming a key competitive factor in the global market, especially with intense national competition in advanced industries like AI.
- The policy changes in both Korea and the UK stem from the shared question of whether existing operators alone can build the necessary power grid in time.
For investors — Investors in Korean DER projects should anticipate faster grid connection timelines for large-scale facilities, as the BT model aims to accelerate infrastructure development. This also presents new opportunities for private construction and financing firms to engage in high-value grid projects, albeit with a focus on project delivery rather than long-term asset ownership.
Watch: Monitoring the designation of private project implementers by the Climate, Energy, and Environment Minister under the National Key Power Grid Expansion Special Act.
Weekly digest
What changed in Korea's power market this week — one email, every week.
Email only, used solely to send this digest (delivered via Resend). Unconfirmed sign-ups are deleted after 30 days. Free.