Government to Launch Power Supervisory Agency, Initiating 'Separation of Operators and Supervisors' in Grid Management

Complexity of Power Grid Soars with Expansion of Renewable Energy
Growing Need for Integrated Market Monitoring and Grid Code Supervision

Installation of Solar Power Facilities for the Renewable Energy Convergence Support Project

The government is moving forward with the establishment of a “Power Supervisory Agency” to ensure grid stability and market fairness. As the power system undergoes rapid changes due to the expansion of renewable energy and accelerated electrification, the current framework is deemed insufficient to simultaneously oversee grid operations and monitor the market.

On April 14, the Ministry of Climate, Energy and Environment held a Power Governance Forum at Seoul Square, where officials from Korea Electric Power Corporation, Korea Power Exchange, and academic experts discussed measures to reform the power supervision system, including the establishment of the Power Supervisory Agency.

The core of the Power Supervisory Agency is the separation of grid operators and supervisory functions, embodying the “separation of players and referees.” The current structure entrusts grid operation, market functions, and even certain supervisory roles to Korea Electric Power Corporation and Korea Power Exchange. The government’s plan is to have an independent, specialized supervisory body dedicated to these oversight tasks.

This discussion stems from changes in the grid structure driven by the expansion of renewable energy. With the rapid increase in variable power sources such as solar and wind, the technical complexity of grid operation has risen, and output control measures are also increasing sharply, resulting in heightened stability risks.

In fact, during the spring off-peak season, the share of inflexible power sources increased from 62.3% in 2021 to 81.1% in 2025, and volatility in electricity demand is also rising. Consequently, output control incidents have more than tripled year-over-year, and the total amount of controlled output has expanded ninefold, rapidly increasing the burden of grid operation.

The structure of the power market has also become significantly more complex. The number of Korea Power Exchange members now exceeds 7,000, and there are as many as 180,000 direct power purchase agreements (PPAs) with Korea Electric Power Corporation. New business models such as distributed energy and virtual power plants (VPPs) have emerged, but comprehensive monitoring systems remain inadequate.

Currently, the market monitoring function is confined to a small unit within the Korea Power Exchange, and there is no permanent, independent body to assess the adequacy of grid operation measures. Grid codes are also scattered across multiple regulations, making consistent management and supervision difficult.

The Power Supervisory Agency is expected to fill these gaps. In the grid sector, it will be responsible for upgrading and monitoring compliance with grid codes, evaluating output control and emergency measures, and investigating facility failures. In the power market sector, it will monitor unfair trading, analyze competitive structures, and protect consumers.

To ensure the independence and neutrality of the Power Supervisory Agency, the government is considering enshrining its legal basis in legislation. Several related bills have already been introduced and are under review in the National Assembly.

Major countries have already established independent power regulatory systems. The United States, United Kingdom, Germany, and Japan, for example, manage the grid and market separately through dedicated agencies with staff ranging from hundreds to thousands.

The government aims to secure both grid stability and market transparency through this reform of the power supervision system. A representative from the Ministry of Climate, Energy and Environment stated, “It is necessary to build a new power governance structure suited to the era of electrification,” adding, “We will accelerate institutional improvements, including the establishment of the Power Supervisory Agency.”

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