Incheon City Calls for Regional Differential Electricity Pricing Based on Power Self-Sufficiency

Seven Metropolitan Cities and Provinces, Including Incheon, Hold National Assembly Forum on September 26
Need to Consider Power Plant Locations, Contribution to Transmission Grid, and Environmental Burden

On the morning of September 26, Incheon City, along with Ulsan, Gangwon, Chungnam, Jeonnam, Gyeongnam, and Gyeongbuk-seven metropolitan cities and provinces in total-jointly hosted the "National Assembly Forum on the Promotion of Regional Differential Electricity Pricing Based on Power Self-Sufficiency" in the main conference hall of the National Assembly Members' Office Building.

The forum was organized to address the unfair reality faced by local residents who pay the same electricity rates despite hosting large-scale power generation facilities, and to establish a rational and fair electricity pricing system that reflects power self-sufficiency rates.

Incheon is a leading national power generation hub, with a high concentration of large-scale facilities such as coal and LNG power plants, and its power self-sufficiency rate is among the highest in the country. However, under the current electricity pricing system, Incheon is simply classified as part of the Seoul metropolitan area and charged the same rates as Seoul and Gyeonggi Province. This approach fails to properly reflect Incheon's contribution to power generation and the environmental burden it bears.

The "National Assembly Forum on the Promotion of Regional Differential Electricity Pricing," co-hosted by Incheon City and six other metropolitan cities and provinces, is being held on the morning of the 26th in the main conference hall of the National Assembly Members' Office Building. Photo by Incheon City

Jeon Younghwan, a professor at Hongik University and a keynote speaker at the event, stated, "Currently, the Seoul metropolitan area accounts for 45% of the nation's power demand, but most generation facilities are concentrated in the provinces, resulting in an already saturated transmission grid." He emphasized, "Given the transmission constraints between regions, the introduction of a differential pricing system is inevitable."

Cho Hongjong, a professor at Dankook University, added, "It is an issue of fairness that areas hosting power plants must endure environmental damage and site conflicts while still being subject to a national uniform rate system." He explained, "A differential pricing system is a mechanism for fairly distributing social costs."

Lee Yusu, a research fellow at the Korea Energy Economics Institute, pointed out, "It is unreasonable that the growing gap in regional power self-sufficiency rates is not reflected in the pricing system." He explained, "A differential pricing system is a practical tool for securing local acceptance and enhancing the sustainability of renewable energy transition policies."

Industry representatives also voiced their opinions. Kim Myunghyun, CEO of Hyundai E&F, noted, "Industrial electricity rates increased by about 75.8% in 2024 compared to 2022, resulting in billions of won in additional costs for the refining and petrochemical industries." He argued, "It is a disadvantage to industrial competitiveness for regions with high power self-sufficiency to pay the same rates." He emphasized that the differential pricing system is not a benefit for specific regions, but "a strategy to maintain national energy efficiency and industrial competitiveness."

Incheon City stated that, prompted by this forum, the electricity pricing system should be reformed into a rational structure that goes beyond the simple "Seoul metropolitan area vs. non-metropolitan area" distinction, and instead comprehensively reflects each region's power production and consumption patterns, contribution to the transmission grid, and environmental burden.

Yoo Jeongbok, Mayor of Incheon, said, "As the core supplier of electricity to the Seoul metropolitan area, Incheon has stably supported the nation's power supply for decades and has fully borne the environmental and social burdens associated with large-scale power generation facilities and transmission infrastructure." He stressed, "The future electricity pricing system must be rationally and fairly restructured to comprehensively consider each region's power self-sufficiency rate, location of generation facilities, contribution to the transmission grid, and environmental burden."

He added, "Incheon City will actively work to ensure that this discussion leads not only to a simple rate adjustment, but also to the expansion of distributed energy, the establishment of an RE100 foundation, the enhancement of industrial complex competitiveness, and the improvement of local acceptance."

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