How Far Will Mega Special Zone Privileges Go? Nuclear PPAs Also Spark Controversy After Labor-Market Flexibility

[Financial News] The debate over special exemptions surrounding Mega Special Zones is spreading from labor to energy. After labor-related exemptions, including exceptions to the 52-hour workweek, whether direct purchases of nuclear power through PPAs will be allowed within the zones has also emerged as an issue. As President Lee Jae-myung has raised concerns that a particular large company could monopolize the benefits in response to its demand for a nuclear PPA, controversy may also arise over whether allowing companies in Mega Special Zones to enter into nuclear PPAs is fair.
On the 25th, according to documents submitted by the Ministry of Climate, Energy and Environment and other agencies to Park Hae-cheol, a Democratic Party of Korea lawmaker on the National Assembly’s Climate, Energy, Environment and Labor Committee, the Climate Ministry said that the provision in Article 121 of the Mega Special Zone Act allowing direct PPAs within the zones was “not essential,” while also stating that “a cautious approach is needed.” The wording differs from the ministry’s statement in March, during its review of a bill on the direct supply of nuclear power to companies, that it “would be difficult to agree.” Although no decision has been made to allow nuclear PPAs, this could be interpreted as a step back from its previous negative stance.
A PPA is an arrangement in which a power generator and a company enter into a contract to trade electricity. Companies’ direct PPAs currently focus mainly on renewable energy. If nuclear PPAs are allowed in Mega Special Zones, semiconductor and artificial intelligence (AI) companies located there will be able to buy electricity generated by nuclear power plants directly. This could broaden companies’ options for procuring electricity and encourage investment, but concerns have also been raised that the benefits of nuclear power could be concentrated among some large companies.
In particular, since President Lee has effectively come out against the steel industry’s demand for nuclear PPAs, controversy over fairness is also expected around allowing nuclear PPAs in Mega Special Zones. On the 11th, the president wrote on social media (SNS): “While the public bears the risks of nuclear power and its social costs, it is important to be cautious about a particular large company in a particular industry monopolizing the benefits.”
The question is whether applying a regional criterion by designating special zones would resolve this fairness controversy. Even if nuclear PPAs are allowed for companies located in the zones, the benefits could in practice be concentrated among large companies that use substantial amounts of electricity and can afford to enter into large-scale contracts. Questions have been raised about whether using region rather than industry as the criterion alone can avoid controversy over special treatment for large companies, and calls have been made to examine whether the exemptions are necessary and who would benefit from them.
The fairness controversy could also extend to the costs borne by other electricity consumers. Rep. Park’s office estimated that if all 4.8 billion kWh produced annually by Wolsong Unit 2 were supplied to a single company, the cost of purchasing replacement electricity could increase by about 380 billion won based on 2025 rates, or about 280 billion won based on rates for the first half of 2026. In other words, if nuclear power is supplied to a particular company, other electricity consumers could incur additional costs while procuring replacement power.
Rep. Park argued: “Companies should meet their electricity needs through existing renewable-energy PPAs, regional rate plans, and other means,” and “both operating and new nuclear power plants should be excluded from eligibility for PPAs.”
Since no decision has yet been made on whether to allow nuclear PPAs in Mega Special Zones, the upcoming legislative review is expected to consider not only the effect on attracting investment but also who would benefit from the exemptions and the principles for allocating electricity costs.
[email protected] Jiwon Song Reporter