Electricity Supervisory Agency to Be Established in Earnest... Ministry of Climate, Energy and Environment and National Assembly to Pursue Legal Amendments in Second Half

Power Governance Innovation Forum Held
Four-Stage Structure Designed: Ministry of Climate, Energy and Environment – Electricity Commission, Electricity Supervisory Agency – Korea Power Exchange, KEPCO

View of the Power Control Center inside the Korea Power Exchange. Korea Power Exchange

The establishment of a new electricity market oversight agency, the Electricity Supervisory Agency, is expected to gain momentum in the second half of the year. With the launch of this agency, the electricity market will be reorganized into a four-stage system: policy, deliberation and decision-making, investigation and supervision, and enforcement and operation.

The Ministry of Climate, Energy and Environment announced that it will hold a 'Forum for Power Governance Innovation' at the National Assembly Members' Office Building on July 22, together with assembly members Park Ji-hye and Seo Wang-jin. The ministry also revealed that it will begin work in earnest on amending the Electric Utility Act in the second half of the year to establish the Electricity Supervisory Agency.

The government emphasized the need to strengthen electricity market governance, noting that the number of private power generation companies has surged from 19 in 2001 to roughly 8,000 in 2026. In addition, more than 180,000 facilities are now trading directly with Korea Electric Power Corporation (KEPCO) via KEPCO PPA, bypassing the electricity market altogether, further illustrating rapid changes in the electricity market landscape.

New modes of transaction such as direct PPAs, district electricity businesses, integrated power plants (PPA), and distributed energy special zones are emerging, making the market structure increasingly complex.

By contrast, the entity responsible for electricity market oversight consists of only a small number of staff within the Korea Power Exchange. Even then, their focus is mainly on on-exchange transactions, lacking the independent capacity to monitor the vast range of transactions. As a result, the fairness of the market has become vulnerable, and blind spots in monitoring are increasing.

Systematic management of electricity data is also insufficient. Although the demand to utilize electricity data is rising rapidly due to advances in AI technology, the definitions, classification systems, disclosure cycles, and methods of data management differ by institution. The ministry pointed out, "There is no central authority to require data submission, verify and standardize quality, or set safe disclosure standards," and explained, "As a result, AI utilization in the electricity sector is slow, and related new industries are struggling even to get off the ground."

The surge in renewable energy sources, such as solar and wind, is also calling for the emergence of new power governance frameworks.

As renewable energy grows, the main power sources in the electricity system are shifting from synchronous generators (rotating machines) to inverters (power electronic devices), but the regulatory framework remains stuck in the past. Consequently, output controls are rising sharply each year, and the emergency response periods needed to maintain system stability are also becoming longer.

According to the Ministry of Climate, Energy and Environment, the number of output controls increased threefold from 27 in 2024 to 82 in 2025. During the same period, the controlled volume rose ninefold, from 12.4 GWh to 109.4 GWh.

There is also a need to proactively improve the technical standards that govern the power system—the grid code. As distributed resources like solar and wind, as well as large-scale loads such as AI data centers, are increasing simultaneously, there is a need to revise the relevant grid codes and establish a system to verify their implementation.

The ministry indicated the main roles for the Electricity Supervisory Agency: proactive improvement of technical standards (grid code) and supervision of implementation; monitoring of unfair practices and evaluation of market systems; and operation of the electricity data management and disclosure system.

Through this, the government aims to establish a four-stage structure consisting of: policy (Ministry of Climate, Energy and Environment), deliberation and decision-making (Electricity Commission), investigation and supervision (Electricity Supervisory Agency), and enforcement and operation (Korea Power Exchange and KEPCO).

At the forum, Seung-ho Song, professor at Kwangwoon University, will give a presentation on 'Advancing Technical Standards (Grid Code) and Power Governance Innovation.' Gu-hyeong Chung, principal researcher at the Korea Electrotechnology Research Institute, will present on 'Expansion of New Power Businesses and Directions for Electricity Market Transformation,' and Ji-hyo Kim, professor at the Korea Advanced Institute of Science and Technology, will address 'Reforming Governance to Enhance Electricity Information Transparency.'

Chang-seop Kim, chair of the Electricity Commission, said, "As the pace toward becoming an electric nation accelerates, having the right rules and a fair referee becomes ever more critical. We now have hundreds of thousands of market participants, yet the rules are outdated and even the fairness of the referees is in question," emphasizing, "We need an independent agency responsible for proactively improving technical standards, fairly monitoring the market, and ensuring transparent electricity information dissemination."

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