Samjong KPMG: "Energy Infrastructure Determines Advanced Industry Competitiveness"

"Power Supply Must Be Reviewed from the Investment Planning Stage"

It has been suggested that, to build competitiveness in advanced industries, energy infrastructure is the most critical factor, with a need to review power supply and other related issues starting from the investment planning stage.

On September 9, Samjong KPMG published a report titled "Expansion of Advanced Industry Investment and Energy Infrastructure Competitiveness," in which it expressed this view.

The report analyzes that major countries are using energy as a core strategy to enhance industrial competitiveness and attract investment. In particular, the United States is focusing not only on nurturing semiconductors, artificial intelligence (AI), and advanced manufacturing, but also on expanding grid capacity and building grid infrastructure.

In Korea, both the proportion of manufacturing and the share of industrial energy consumption are high, making the country’s industrial competitiveness heavily dependent on energy supply. In addition, with increasing power demand from new sectors such as semiconductor and AI data centers, and rising dependence on electricity in traditional industries, ensuring a stable power supply is becoming more critical.

The report diagnoses that Korea's challenge is not simply to increase generation capacity, but to secure grid competitiveness by ensuring that large-scale industrial demand areas receive adequate power in a timely manner. Even if the nation’s overall generation facilities are sufficient, transmission, substation networks, and supporting grid infrastructure must be established in time to deliver power to areas of demand.

It also emphasizes the need to pre-check the actual amount of electricity that can be supplied to individual facilities, the timing of supply, and the possibility of securing additional power due to expansion.

Electricity rates, in turn, are identified as a core variable that goes beyond being a simple operational expense and can determine long-term investment economics. For example, in industries with high electricity consumption—such as semiconductors, batteries, steel, and chemicals—accumulated changes in power rates over time can influence production costs, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), NPV (Net Present Value), IRR (Internal Rate of Return), and the payback period. The analysis finds that not only prices but also timing of supply can affect economic viability.

The report proposes three strategies: pre-verification of power supply conditions at individual facilities, reflecting the risk of supply delays in investment economics, and connecting external energy infrastructure schedules with production facility timelines.

Sangwon Moon, Managing Director of the ESG Business Group at Samjong KPMG, said, “In advanced industry investment, energy is no longer just an operational issue to be managed after a factory begins operating; it is a core variable that determines the feasibility and competitiveness of investment. Companies must comprehensively consider power supply scale and timing, long-term cost burdens, and conditions for sourcing low-carbon electricity starting from the investment review stage.”

He added, “Especially in industries that require large-scale power, it is necessary to review production facilities and energy infrastructure together, based on synchronized start-up schedules and investment economics, rather than as separate plans. Companies that proactively incorporate energy supply conditions into their investment strategies and secure stable energy infrastructure will gain a competitive edge in the future advanced industry landscape.”

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