Korean solar associations urge delay of regional LMP, exemption for existing plants
On October 22, 2026, the National Photovoltaic Power Association and the Korea Photovoltaic Power Association demanded a delay in introducing regional Locational Marginal Pricing (LMP) and an exemption for existing power plants. They argue the proposed system would shift grid expansion costs onto generators, harming profitability and new investment.
Our take
Will Korea's proposed locational marginal pricing cut revenue for existing solar plants?
Existing solar plants selling at wholesale prices outside the capital region would earn less in congested midday hours under Korea's proposed locational marginal pricing unless exempted, and neither the design nor an exemption is decided.
In KPX's simulation for July 2025 to June 2026, not a forecast, prices outside the capital region were lower in 31.4% of hours and never higher, mostly at midday. Whether existing plants are exempted, and whether retail tariffs also vary by region, decides who carries that gap.
What the source says
- The associations demand that existing power plants be excluded from the regional LMP system to protect their initial investment business viability.
- The associations warn that regional wholesale price drops could lead to loan repayment difficulties, asset value depreciation, and potential loan recalls or interest rate hikes from banks for existing facilities.
- The associations argue that reduced profitability and unpredictable returns under regional LMP would deter new private investment in solar, including community-shared projects like 'sunshine income villages' and agri-photovoltaics.
- The associations propose reflecting regional supply-demand conditions and grid costs in consumer electricity tariffs as an alternative to solely differentiating wholesale prices.
- The Korea Power Exchange Chairman, Kim Seong-jin, stated that he would 'fully listen to industry opinions' regarding the LMP introduction.
- The National Photovoltaic Power Association held a protest on October 23, 2026, at Coex in Seoul, while the Korea Photovoltaic Power Association protested at the Korea Power Exchange headquarters in Naju.
For investors — Solar plant owners and developers outside the capital region should model midday revenue with and without an exemption for existing plants, and price new projects as if they would face regional prices.
Lenders to solar plants outside the capital region should test debt service against lower midday prices and check whether loan terms assume today's single mainland price.
Watch: Monitoring the Korean government's decision on delaying or modifying the regional Locational Marginal Pricing (LMP) system, especially regarding exemptions for existing plants and the introduction of regional consumer electricity tariffs.
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.