Discounted Electricity Rates for Production Regions: Gyeongbuk Province Urges Swift Adoption of Regional Tariff System, Holds Forum

On August 4, at 3 p.m., Gyeongbuk Province will hold a 'Regional Electricity Tariff System Implementation Forum' in the auditorium of the Gyeongbuk Provincial Government East Office Building in Pohang. The event will be attended by approximately 150 representatives from local industries, academia, related agencies, and city and county governments.

This forum has been organized to seek solutions and insights regarding the role that Gyeongbuk Province has played in contributing to national energy security, as well as to discuss new directions for Korea's electricity pricing system as the implementation of a regional electricity tariff system becomes more concrete.

Gyeongbuk Provincial Government East Building

The event will be attended by Geumhee Yang, Vice Governor for Economic Affairs of Gyeongbuk Province; Heesoo Kim, Chairman of the Gyeongbuk Provincial Assembly; Yongseon Park, Mayor of Pohang; and Cheolsoo Kim, Chairman of the Pohang City Council, among others.

The regional electricity tariff system is designed to address the structural imbalance between areas of electricity production and consumption. The system aims to reflect regional supply costs, including those related to generation and transmission, as well as the social costs borne by areas that host power plants, in the electricity pricing structure. In Korea, regions hosting power plants and transmission networks have long endured environmental and social burdens for electricity supply, yet there have been ongoing criticisms that these contributions have not been sufficiently reflected in electricity bills.

The legal framework for adopting a regional electricity tariff system was established with the Special Act on Promoting Distributed Energy, which took effect in June 2024. The Ministry of Climate is expected to draw up a plan to restructure electricity rates soon, finalize it through public hearings, and confirm it within the year.

Gyeongbuk is the largest producer of electricity in Korea and ranks first in energy self-sufficiency nationwide. It also leads the country in carbon-free electricity generation, including nuclear and renewable energy, positioning itself at the forefront of international decarbonization demands and as a prime location for next-generation high-tech industries.

If the government implements a regional electricity tariff system, Daegu-Gyeongbuk, the largest electricity-producing region in the country, is expected to see a significant reduction in both residential and industrial electricity rates. Some predict that household electricity rates could decrease by 5 to 10%.

On this day, Hyuksu Kwon, President of the East Sea Industrial Research Institute, will deliver a keynote presentation on the theme of ‘A Rational Direction for Advancing Regional Electricity Tariff Systems.’ President Kwon is expected to propose that, based on domestic and international cases and Gyeongbuk's power structure, the regional tariff system should be designed to reflect transmission costs and the burdens of host regions, and that Gyeongbuk should utilize this system as a policy tool to strengthen regional industrial competitiveness.

Yoon Taek Cho, Senior Research Fellow at POSCO Research Institute, will also present on ‘Discussions on Regional Electricity Rates and the Industrial Sector's Response,’ emphasizing the need for the industrial sector to leverage the regional tariff system as a package for attracting new businesses and fostering local industries.

During the panel discussion, academic experts, as well as representatives from local industries such as steel and secondary battery companies, will participate to discuss the necessity and key issues of introducing a regional electricity tariff system and to explore response strategies for the local industrial sector.

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