Eradicating "Delayed and Bogus Power Generation Projects"... KEPCO Revises Grid Utilization Regulations

Strengthened Oversight Across Permit, Application, Contract, and Project Stages
Timely Grid Capacity Allocation for Genuine Investors

Korea Electric Power Corporation (KEPCO) is stepping up oversight of so-called "delayed and bogus power generation projects," in which companies secure grid connection capacity but do not proceed with actual business operations for extended periods. The aim is to resolve the management blind spot of approximately 30 GW and allocate grid connection capacity in a timely manner to genuine power generation businesses.

KEPCO announced on July 19 that it will implement a revision of the "Transmission and Distribution Electrical Facilities Utilization Regulations," effective from July 20.

Recently, there has been a surge in new power generation projects, leading to a sharp increase in grid usage applications. However, issues have persisted as some companies continue to secure grid connection capacity even when their projects are delayed or effectively halted, making it difficult for companies actively pursuing projects to utilize the grid.

The amendment focuses on strengthening the management system across the entire cycle, from power generation business permits to the grid utilization contract and ongoing business operations. If a company does not apply for grid use within one year of receiving its power generation permit, or fails to sign a grid utilization contract within one year after applying for grid use, the connection capacity may be reclaimed. Additionally, the interval for checking actual business progress following contract signing will be shortened from two years to one year.

For offshore wind power projects, a new interim inspection regime will be introduced. Key project milestones, such as completion of environmental impact assessments at least five years before grid use begins and signing of fixed-price contracts at least three years prior, will be checked to evaluate project progress. If a project is not progressing as planned, a committee comprising the Ministry of Climate, Energy and Environment, KEPCO, Korea Energy Agency, and private sector members will deliberate and may terminate the grid utilization contract based on the party at fault. Conversely, if it is determined that the operator is not at fault, the grid connection start date may be adjusted.

A grace period will also be provided to minimize confusion among existing operators. Businesses that obtained generation permits before August 21, 2025 must apply for grid use by August 20, 2026. Those that applied for grid use before September 21, 2025 must sign a usage contract by September 20, 2026. Companies that have received notice of contract termination can file an objection within 30 days.

KEPCO expects that this regulatory improvement will allow for systematic management of about 30 GW of power generation projects previously left unmonitored. The company also anticipates that redistributing the grid held by non-progressing operators to lower-priority businesses will improve grid utilization efficiency and facilitate smoother interconnection of new power generation projects.

This content was produced with the assistance of AI translation services.