AIDC Electricity Rates: A 1-Won-per-kWh Difference Means 8.8 Billion Won Annually... Dedicated Rate Plan Remains Unclear

[Financial News] Although the government has designated AI Data Centers (AIDC) as a national strategic industry and even enacted a special law, the dedicated rate plan scheduled for introduction this year remains unclear, prompting concerns that the government's strategy to foster AIDCs may suffer setbacks.
On the 29th, Cho Kyoung-tae of the People Power Party, a member of the Science, ICT, Broadcasting, and Communications Committee of the National Assembly representing Busan Saha-gu Eul, pointed out that "even a 1-won-per-kWh difference in AIDC electricity rates could result in an annual cost difference of up to 8.76 billion won for a 1GW facility," and said, "The failure to disclose the design plan for the AIDC dedicated rate system will be addressed as a major agenda item at next month's parliamentary audit."
Previously, the government set a goal of building 18.4GW of AIDCs by 2035 and attracting more than 1,000 trillion won in private investment. At the National Briefing on the Three Major Mega-Projects for Korea's Great Leap Forward on June 29, it announced plans to establish a dedicated rate plan, and reaffirmed its intention to introduce it within the year at a preliminary briefing for the Presidential Work Report on August 4.
However, with just over three months remaining in the year, neither details such as eligibility, rate levels, and the application period for the AIDC dedicated rate plan nor the schedule for disclosing the design plan and holding a public hearing has been announced.
By contrast, the design plan and implementation schedule for the regional differential rate system announced alongside it have already been presented. On August 26, the Ministry of Climate, Energy and Environment and Korea Electric Power Corporation (KEPCO) unveiled a design plan for the 'Industrial Regional Electricity Rate System,' which lowers industrial electricity rates in the southern region by up to 18 won per kWh, and held a public hearing.
For AIDCs, which require large amounts of electricity, long-term operating costs vary significantly depending on electricity rates.
Assuming that a 1GW facility uses electricity at maximum capacity for 8,760 hours a year, its annual consumption would be 8.76 billion kWh. A 1-won-per-kWh difference in the rate would mean an annual electricity bill difference of 8.76 billion won, while a 10-won difference would mean a difference of 87.6 billion won. This calculation assumes continuous use at maximum capacity; actual costs vary depending on the utilization rate and contract terms.
The AIDC industry said, "We can conduct business activities in the global market and create a virtuous cycle in which additional investment plans are established based on securing prospective demand only after AIDC operating costs, particularly electricity costs, are confirmed," adding, "At present, Korean AIDCs have no choice but to lose competitiveness in the global market."
Cho Kyoung-tae said he would also verify how the Ministry of Science and ICT, which is pursuing the AIDC expansion policy, is consulting with the Ministry of Climate, Energy and Environment and KEPCO, which are responsible for designing the dedicated rate plan.
Cho Kyoung-tae urged, "Discussing the attraction of big tech companies with investment costs exceeding 1,000 trillion won without a concrete roadmap for AIDC electricity consumption and rate plans is nothing more than an illusion," adding, "A dedicated rate plan with competitive rates must be designed and disclosed as soon as possible."


[email protected] Yoon Hong-jip Reporter