PPA Regulations Must Be Eased and Energy Redesign Pursued... Advice from 5 Experts [AIDC Era of Coexistence](20)

VIII. Expert Recommendations for Successful AIDC Construction

Difficulties in Utilizing Renewable Energy... KEPCO Overload

Outdated Regulations Could Result in Total Defeat in Competition

Need to Build Infrastructure that Enables Coex

Editor's NoteIn the era of artificial intelligence (AI), the government plans to build data centers with a total capacity of 18.4GW by 2035 as part of three mega-projects. Once limited to supporting IT services, data storage, and sharing, today's data centers are evolving into industrial platforms that produce and supply AI computing resources. However, despite the common recognition of data centers as key infrastructure determining the nation’s industrial competitiveness, there are still many challenges to resolve before the expansion of AI Data Centers (AIDC) can be realized. The Asia Business Daily has conducted on-site coverage of international cases—including Finland, Denmark, Germany, and the Netherlands—that have successfully overcome issues such as power, permitting, water supply, and community conflict surrounding AIDC. We explore practical solutions that could enable AIDC to coexist as valued assets within local communities in Korea.

Experts advise that, for Korea to become the “AI Data Center (DC) Hub of Asia,” the country must pursue industrial growth in parallel with long-term infrastructure designs that enable coexistence with local communities. Given the fast-paced nature of the AI industry, not only must the government create conditions conducive to private investment, but it must also support energy system redesigns to achieve sustainable DC construction.

Jo Daekeun, a senior adviser at Bae, Kim & Lee LLC, stated on August 28, “In major countries such as the United States and Denmark, power generation and transmission structures are diversified. In the United States, private independent power producers allow big tech companies to directly acquire power companies or enter into flexible, exclusive supply deals through power purchase agreements (PPAs). In contrast, in Korea, Korea Electric Power Corporation monopolizes everything from generation to transmission, making it difficult for companies to source the power they need directly.”

He advised that, to prevent overloads at KEPCO while opening new channels for corporate power sourcing, Korea needs to ease heavy PPA regulations—which currently impose excessive restrictions on transaction parties, capacities, and dedicated line construction. Jo added, “It is common for power producers to receive direct funding aimed at increasing renewable energy output. Alongside infrastructure development, Korea should lift capacity limits and greatly expand autonomy regarding generation sources and transaction methods.”

He further explained, “If we open the door for corporations in urgent need of electricity, they will find optimal solutions even more enthusiastically than KEPCO can. We need to legally enable big tech companies and domestic renewable energy producers in regions like Honam to jointly invest in or develop solar or wind power projects.”

Jo also pointed out that, whereas other countries are gaining AI leadership through unrestricted PPAs, Korea is at risk of losing out in the AIDC race if it remains trapped in outdated regulatory frameworks. Korea does have a PPA system under the “Notice on Direct Power Trading of Renewable Electricity, etc.”, but it is limited to renewable energy. Given the low ratio of renewables and unreliable supply, this system falls short of stimulating AIDC establishment in Korea.

Need to Re-examine the Structure for Sharing Massive Power Costs

There are also calls for Korea to take a cautious approach to AIDCs, given the significant burden these centers place on power infrastructure and costs. Jeon Younghyeon, professor of Electronic and Electrical Engineering at Hongik University, commented, “While data centers are important, proper demand forecasting must come first. Korea needs to ask whether it is appropriate to build power plants to provide energy resources to foreign companies.”

Professor Jeon added, “In electrical engineering, data centers are often referred to as representative ‘malicious loads’—loads that negatively affect power grids. Good loads consume power steadily, but data centers cause severe, sudden fluctuations, heavily undermining grid stability.” He emphasized that stabilization equipment is therefore essential, and that the cost of such measures must be reflected in the center’s own operating expenses; these core costs, however, are not currently being discussed or considered.

He continued, “In the United States, companies have solved electricity shortages and costs by building their own power plants. We need to consider policy reform that would assign formal obligations for grid stabilization and cost sharing to companies using large amounts of power for specialized purposes.”

Kim Sewoong, Vice President of AI Synergy & Communication at Kakao, noted, “From an operations perspective, we need to consider not only total power consumption, but also the temporal distribution of loads. Given that domestic service traffic peaks during the day, scheduling AI training workloads at night—when demand is low—can maximize GPU utilization and ease grid congestion.” He added, “Future support designs must address not just facility size, but also operating methods.”

Need to Redefine the Scope and Criteria for Tax Benefits

There are growing calls to scrutinize how much data centers, which consume vast amounts of electricity and water, genuinely contribute to Korea’s AI industry and ecosystem.

Im Jaemin, Secretary General of the Energy Transition Forum, said, “A significant portion of new data center applications in Korea are for rental or colocation services. We must closely examine the actual usage by Korean AI companies, the degree of domestic control and ownership over data and computation resources, the contribution of centers to local technology and talent, employment, tax revenues, and benefits versus costs for power and water infrastructure.” He cautioned that, in the case of simple rental or colocation AIDC, profits and control may be taken abroad while the burden of power, water, and environmental impact remains in the host location.

To strengthen AIDC competitiveness, new standards and clearer boundaries for tax incentives are also needed. Overseas, as the importance of coexistence with local communities grows during AIDC construction, governments are implementing mutual prosperity policies. Finland, which once aggressively attracted data centers, has shifted policy as the burden on infrastructure—such as power supply and transmission networks—has grown. Rather than blanket incentives, Finland now selectively supports projects that create high added value. An official from the Embassy of Finland said, “Recently, Finland has been providing limited tax benefits only to projects that build stronger ties to the domestic economy, such as generating jobs, driving innovation, or integrating with national energy systems.”

Cho Youngim, a professor of Computer Engineering at Gachon University, pointed out, “While power and cooling systems are essential for running AI racks in data centers, they are excluded from the current investment tax credit, so this urgently needs improvement. We should make exceptions for electrical, HVAC, and telecommunications systems as eligible categories.”

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