A New Phase in Korea’s Energy Transition: A Balanced Growth Strategy for Renewable Energy and Nuclear Power by 2025
Editor
Paradigm Shift in Korea’s Energy Industry
Korea’s energy industry is riding an unprecedented wave of change as of 2025. According to the government’s 11th Basic Plan for Electricity Supply and Demand, a balanced energy mix strategy is being implemented to expand the share of renewable energy to 30.6% and maintain the nuclear power share at 32.4% by 2038. This is evaluated as a pragmatic approach to simultaneously address the grand goal of achieving carbon neutrality and the realistic challenge of ensuring energy security. According to a recent announcement by Korea Electric Power Corporation (based in Seoul), the renewable energy generation in 2024 recorded an increase of 12.3% from the previous year, reaching 86.2 TWh, which accounts for 15.8% of the total power generation.
The backdrop of these changes lies in the structural transition of the global energy market. According to the latest report by the International Energy Agency (IEA), global investment in renewable energy surpassed $1.8 trillion in 2024, with the Asia-Pacific region accounting for more than 60%. Korea is also significantly increasing its investment in energy transition in line with this trend, with the government allocating a budget of 15 trillion won for energy transition in 2025, a 25% increase from the previous year. Notably, the composition of an energy portfolio where renewable energy and nuclear power play complementary roles rather than being in opposition is becoming a reality.
The industry perceives these policy changes as opportunities. Doosan Enerbility (based in Changwon) announced a 43% increase in nuclear power component orders in the fourth quarter of 2024 compared to the same period the previous year, while also securing new offshore wind projects worth 3 trillion won. This is a representative example of Korean energy companies building a diversified portfolio rather than relying on a single technology. Hanwha Solutions (based in Seoul) also announced plans to expand its solar module production capacity to 18 GW by the end of 2025, aiming to strengthen its competitiveness in the global solar market.
Technological Innovation and Market Expansion in Renewable Energy
Korea’s renewable energy market is entering a phase of qualitative growth based on technological innovation. Progress in the offshore wind sector is particularly noteworthy. The Ulsan floating offshore wind demonstration complex began commercial operation in December 2024, marking Korea’s full entry into the commercialization phase of floating offshore wind technology. This project, with a capacity of 200 MW, demonstrated stable power production even in deep waters over 100 meters. According to the Korea Offshore Wind Association, planned offshore wind projects by 2030 total 12 GW, involving an estimated investment of about 30 trillion won.
Innovative changes are also occurring in the solar sector. Hanwha Solutions developed next-generation perovskite tandem solar cells, achieving a conversion efficiency of 31.2% in laboratory conditions, with commercialization targeted for 2026. This represents a significant improvement over the existing silicon solar cells’ 22-24% efficiency, expected to greatly enhance the economic viability of solar power generation. Simultaneously, agrivoltaics projects combining agriculture and solar power are expanding. A 30 MW agricultural solar complex in Haenam County, Jeollanam-do, produces 45 GWh of electricity annually without reducing crop yields, serving as a successful example of increasing farm income while spreading renewable energy.
The energy storage system (ESS) market is also experiencing rapid growth. According to the Korea Battery Industry Association, the domestic ESS market size in 2024 increased by 35% from the previous year to 4.2 trillion won. Samsung SDI (based in Suwon) and LG Energy Solution (based in Seoul) are accelerating the development of next-generation battery technologies, particularly securing global competitiveness in lithium iron phosphate (LFP) and solid-state battery technologies. LG Energy Solution’s ESS battery shipments in 2024 increased by 28% to 23 GWh, with a target of 30 GWh for 2025. This growth reflects the increasing importance of ESS as a key technology to address the intermittency of renewable energy and ensure grid stability.
The establishment of a hydrogen economy ecosystem is also accelerating. According to the government’s 4th Basic Plan for Hydrogen Economy Implementation, green hydrogen production will be expanded to 250,000 tons by 2030, and the number of hydrogen refueling stations will increase to 660. POSCO Holdings (based in Pohang) launched a green hydrogen project in the Pilbara region of Australia in 2024, aiming to produce 1.6 million tons of green hydrogen annually. This demonstrates Korean companies’ active efforts to build a hydrogen supply chain utilizing overseas resources. Simultaneously, SK Innovation (based in Seoul) announced the construction of a green hydrogen production facility at the Ulsan petrochemical complex, planning to produce 250,000 tons of green hydrogen annually from 2026.
Smart grid and virtual power plant (VPP) technologies are also gaining attention. Korea Electric Power Corporation announced that it successfully conducted power transactions of up to 100 MW through the VPP system operating in Jeju Island in 2024. This system integrates and manages distributed renewable energy plants, ESS, and electric vehicle charging stations to adjust power supply and demand in real-time. From 2025, the system will be expanded nationwide, targeting the operation of a 1 GW VPP. This is evaluated as a crucial infrastructure accelerating the transition from a centralized power system to a distributed energy system.
Global competition in the renewable energy sector is intensifying. Global companies such as China’s BYD and CATL, the United States’ First Solar, and Denmark’s Ørsted are expanding their presence in the Korean market, while Korean companies are focusing on securing competitiveness in overseas markets. Hanwha Solutions, for example, expanded its solar module plant in Georgia, USA, securing a production capacity of 2.5 GW annually, and is leveraging the benefits of the Inflation Reduction Act (IRA) to strengthen its position in the North American market.
The Revival of Nuclear Technology and the Race to Lead the SMR Market
Korea’s nuclear industry is experiencing a new golden age. Following the normalization of the government’s nuclear power policy, orders and investments by related companies have surged, with Korea emerging as a global leader in the development of small modular reactor (SMR) technology. Doosan Enerbility signed an SMR supply contract with NuScale Power in the United States in 2024, participating in the construction of six SMRs by 2030. This $5 billion project serves as a significant milestone for the overseas expansion of Korean nuclear technology.
Domestically, efforts to commercialize SMRs are also gaining momentum. The Korea Atomic Energy Research Institute completed the standard design approval application for the innovative SMR ‘i-SMR’ by the end of 2024, targeting the operation of the first unit by 2032. The i-SMR, with a 170 MW electric output capacity, can reduce construction costs by 40% compared to large nuclear plants and is evaluated to have significantly enhanced safety. Notably, it features a passive safety system that ensures automatic safety without external power or operator intervention.
Competition in the global SMR market is fierce. Companies like NuScale Power and TerraPower in the United States, Rolls-Royce SMR in the UK, and Rosatom in Russia are developing proprietary SMR technologies, with competition to lead the market accelerating. According to the International Atomic Energy Agency (IAEA), over 80 SMR designs are under development worldwide, with many targeting commercialization in the 2030s. Experts predict that Korea can secure a competitive edge in the SMR market based on its nuclear operation experience and manufacturing capabilities.
Nuclear fuel cycle technology development is also gaining attention. The Korea Atomic Energy Research Institute succeeded in developing spent nuclear fuel recycling technology using pyroprocessing, with plans to begin operating a demonstration facility in 2025. This technology separates uranium and plutonium from spent nuclear fuel for recycling, potentially reducing high-level radioactive waste by over 95%. It also significantly enhances nuclear fuel self-sufficiency, holding important implications for energy security.
The nuclear decommissioning market is emerging as a new opportunity. A significant number of the 440 nuclear reactors currently in operation worldwide are expected to reach the end of their lifespan after the 2030s, with the decommissioning market estimated to reach $300 billion. Doosan Enerbility is leveraging its experience from the Kori-1 decommissioning project to pursue entry into the overseas nuclear decommissioning market, participating in the 2024 bid for the Doel nuclear decommissioning project in Belgium. Nuclear decommissioning requires high technical expertise and extensive experience, with Korea’s nuclear operation know-how serving as a source of competitiveness.
Fusion energy technology development is noteworthy from a long-term perspective. Korea’s KSTAR (Korea Superconducting Tokamak Advanced Research) project set a new world record in 2024 by achieving a plasma operation time of 102 seconds. This is a significant milestone for the commercialization of fusion energy, demonstrating Korea’s technological prowess in the International Thermonuclear Experimental Reactor (ITER) project, which aims for fusion commercialization by 2050. The government plans to invest 200 billion won annually in fusion technology development from 2025, targeting the construction of fusion power plants in the 2040s.
Korea’s energy transition strategy is evaluated as a balanced approach that not only focuses on expanding renewable energy but also pursues carbon neutrality and energy security through the complementary roles of nuclear power and renewable energy. This strategy is expected to enable the construction of a sustainable energy system in the long term while minimizing potential power supply instability during the energy transition process. The integration of next-generation nuclear technologies like SMRs and new energy technologies such as green hydrogen and ESS offers Korea the opportunity to emerge as a technological leader in the global energy market.
2025 is anticipated to be a crucial juncture for a new leap forward in Korea’s energy industry. With consistent government policy support, active investment by private companies, and continuous technological innovation, Korea is increasingly likely to establish itself as a leading nation in the global energy transition. However, intensified competition in the rapidly changing global energy market and uncertainties in technology development remain challenges to be addressed.
*This analysis is based on publicly available market information and industry reports and should not be used as a basis for investment decisions. The energy market can be influenced by various factors, including policy changes, technological advancements, and international circumstances.*
