Peak Power Demand Projected to Reach 131.8 GW by 2040: "Driven by Semiconductors, AI, and Electrification"

On the 22nd, the 3rd Public Forum on the 12th Basic Plan for Electricity Supply and Demand was held at the Korean Broadcasting Center in Mok-dong. Photo by Heejong Kang

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The Steering Committee for the Establishment of the 12th Basic Plan for Electricity Supply and Demand has projected that by 2040, Korea's electricity consumption will reach 657.6 terawatt-hours (TWh), and the nation's peak power demand will be 131.8 GW. This is an increase compared to the 11th Basic Plan, which forecast domestic electricity demand to be 624.5 TWh and peak power at 129.3 GW by 2038. Despite expectations of economic slowdown, the committee anticipates that domestic electricity demand will continue to grow due to trends in advanced industries such as semiconductors, data centers, and electrification.

Jin Heo, Professor at the Department of Climate and Energy Systems Engineering at Ewha Womans University, announced this provisional long-term demand forecast at the 12th Basic Plan Public Forum held on April 22 at the Kobaco Hall of the Korean Broadcasting Center. Professor Heo also serves as the head of the Demand Planning Subcommittee of the Steering Committee for the 12th Basic Plan.

The long-term demand forecast will serve as the foundational data for calculating power generation facilities under the 12th Basic Plan through 2040. Power generation facilities will be established in line with the peak power projections.

The Steering Committee forecasted final electricity consumption by first projecting baseline demand and then excluding demand management. In estimating baseline demand, the committee first forecast model demand and then added demand from advanced industries, data centers, and electrification sectors.

Yong Wook Choi, Professor of Economics at Chung-Ang University, who participated in the Demand Planning Subcommittee, explained, "Since we base the forecasts for semiconductors, data centers, and electrification on historical data, we factored in additional demand."

In the baseline scenario, the Steering Committee calculated model demand for 2040 at 612.4 TWh, and added 29.3 TWh from advanced industries, 26.5 TWh from data centers, and 112.6 TWh from electrification. As a result, baseline demand was projected at 780.8 TWh. After subtracting demand management (132.2 TWh), final electricity consumption was forecast to be 657.6 TWh. This is 33.1 TWh higher than the 624.5 TWh projected in the 11th Basic Plan for 2038.

Based on this electricity consumption outlook, the Steering Committee expects Korea's peak power demand to reach 131.8 GW by 2040. In the 11th Basic Plan, the peak power for 2038 was projected at 129.3 GW. This means an increase of 2.5 GW in just two years.

12th Basic Plan for Electricity Supply and Demand Long-term Demand Forecast Draft

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In the 12th Basic Plan, after calculating model demand, the committee analyzed the impact of new investments in advanced industries, data centers, and electrification, and reflected the incremental increases accordingly. During this process, any overlapping amounts with model demand were excluded. Within the advanced industries sector, semiconductors were the main focus, while no significant additional demand was identified for sectors such as secondary batteries, biotechnology, robotics, or defense.

For model demand, the baseline scenario projected electricity consumption of 612.4 TWh by 2040. This is a decrease compared to the 655.5 TWh estimated in the 11th Basic Plan. Professor Jin Heo explained, "The slower GDP growth compared to the 11th plan has led to a reduced growth rate in electricity consumption."

However, after factoring in the effects of advanced industries, data centers, and electrification, the final electricity consumption is expected to increase compared to the 11th plan. For example, the baseline scenario incorporates 29.3 TWh for advanced industries-much higher than the 1.1 TWh of additional demand included in the 11th Basic Plan.

Data center demand is forecast to reach 26.5 TWh by 2040, which is also a significant increase compared to the 15.5 TWh projected in the 11th Basic Plan.

Jihyo Kim, Professor at KAIST Graduate School of Green Growth and Sustainability, who forecasted data center power demand, explained, "The 11th Basic Plan based its projections on Korea Electric Power Corporation's data center electricity usage applications, but the 12th plan developed and applied a new forecasting model based on the number of CPU and GPU servers."

Electricity demand due to electrification is also expected to rise sharply compared to the 11th plan. The Steering Committee projects that by 2040, under the baseline scenario, electricity consumption from electrification will reach 112.6 TWh. In the 11th Basic Plan, this figure was 63 TWh as of 2038.

This increase is attributed to the government significantly raising the Nationally Determined Contribution (NDC) for greenhouse gas reduction by 2035. Himcheol Shin, Director of the Long-term Energy Modeling Research Division at the Korea Energy Economics Institute, explained, "We used the institute’s model and extended the application of the 2035 NDC." The baseline scenario is based on the 2035 NDC, which aims to reduce greenhouse gas emissions by 51% compared to 2018, and the upward scenario applies a 61% reduction target.

Experts positively evaluated the application of scenario-based projections in the 12th Basic Plan, but expressed regret that only baseline and upward scenarios were presented, with no scenario based on pessimistic assumptions.

Seunghoon Yoo, Professor at Seoul National University of Science and Technology, stated, "If there is an acceleration scenario, there should also be a deceleration scenario to allow for contingency planning," and added, "The impact of electricity rates should also be reflected when forecasting demand." He further noted, "The government announced a plan to supply 3.5 million air-source heat pumps by 2035, so consistency with the government’s thermal industry policy must also be ensured."

Eunseong Kim, Deputy Representative of the Next Corporation, commented, "It is positive that the 12th Basic Plan is more detailed and structured compared to the 11th," but pointed out, "If sectors with potentially declining electricity demand, such as petrochemicals, are not included, the demand forecast may become upwardly biased."

Kwanghoon Seok, Senior Research Fellow at the Energy Transition Forum, noted, "Major countries, including those in Europe, are now taking a more negative view of hydrogen than in the past," and emphasized, "The demand forecast for electrification should strip out excessive expectations for hydrogen."

Professor Jin Heo concluded, "The draft presented today is provisional, and we will continue to update the long-term demand forecast by gathering various opinions and expert recommendations," adding, "We will also collaborate with other subcommittees on facility planning, grid innovation, and market innovation to further refine the plan."

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