The Intersection of AI and Renewable Energy: A New Milestone in Korea’s Energy Transition
Editor
Upon hearing that the Korean Society for Renewable Energy selected “The Convergence of AI and Energy” as the theme for this year’s autumn academic conference, it struck me that this is more than just an academic interest. In fact, what we are witnessing at the intersection of AI and renewable energy is a fundamental shift in the industrial paradigm. Through an interview with Chulhee Cho, Chairman of the Korean Society for Renewable Energy, we were able to delve more concretely into the significance of this change.
The expression “co-evolutionary relationship” mentioned by Chairman Cho was particularly striking. It describes a structure where AI and renewable energy are mutually dependent. AI serves as a tool to address the biggest weaknesses of renewable energy—intermittency and unpredictability—while renewable energy provides an eco-friendly solution to the explosive power demands of the AI industry. The reason this complementary structure is becoming increasingly important by 2025 is clear.
With global data center power consumption expected to surge from approximately 460 TWh in 2024 to over 1,000 TWh by 2030, the sustainability of the AI industry itself would be threatened without renewable energy. In fact, Google (Alphabet: GOOGL: US) announced that its carbon emissions increased by 13% year-over-year in 2023 due to the expansion of AI services, and if this trend continues, big tech companies will find it challenging to achieve their carbon neutrality goals.
On the other hand, it is noteworthy that AI technology is dramatically improving the operational efficiency of renewable energy. Google’s DeepMind developed an AI system that improved wind power prediction accuracy by 36%, resulting in a 20% increase in wind power generation. In Korea, Korea Electric Power Corporation (015760: KR) announced that it has introduced an AI-based power demand forecasting system, reducing the prediction error from the previous 3% to 1.5%.
The Reality and Challenges of Korea’s Energy Transition Policy
Chairman Cho’s comments on the government’s energy transition policy were also intriguing. The key point is that to achieve the annual target of 12 GW of renewable energy deployment, it is essential to go beyond merely increasing installation volumes. As of 2024, Korea’s renewable energy capacity is approximately 33 GW, but the utilization rate still needs improvement due to delays in grid connection and output constraints.
Particularly noteworthy is the issue of the absence of a “control tower.” Currently, renewable energy policies are dispersed across various ministries, including the Ministry of Trade, Industry and Energy, the Ministry of Environment, and the Ministry of Land, Infrastructure and Transport, and the collaboration system among local governments, power companies, and private operators is inadequate. As a result, problems such as permit delays and grid connection delays are recurring. In Germany, the share of renewable energy reached 52% in 2023, backed by an integrated governance system at the federal government level.
Chairman Cho’s emphasis on an integrated approach to “electricity + heat” is also an important point. Currently, heat energy accounts for about 60% of domestic energy consumption, with most of it relying on fossil fuels. The transition to heat energy through heat pumps, geothermal systems, and biomass has a significant impact on achieving overall carbon neutrality goals. Denmark, for example, has shown leading results in decarbonizing the heat energy sector by linking district heating systems with renewable energy.
Chairman Cho’s balanced perspective on the government’s discussion of separating “renewable energy” and “new energy” is also noteworthy. While differentiated support systems considering the characteristics, development speed, and economic viability of each technology are necessary, simple administrative separation could weaken the integrated approach to overall energy transition. In reality, the hydrogen economy and renewable energy are complementary, and policy separation could hinder the effective utilization of synergies.
Global Competitive Landscape and Korea’s Positioning
In the midst of fierce global energy transition competition, an objective assessment of Korea’s position reveals strong technological capabilities and a robust manufacturing base, but improvements are needed in policy consistency and execution. In China, the new installation of solar capacity in 2024 increased by 55% year-over-year to 216 GW, and the United States is pursuing a $370 billion clean energy investment through the Inflation Reduction Act (IRA).
Korean companies’ technological competitiveness is undoubtedly at a high level. Hanwha Solutions (009830: KR) boasts a solar cell efficiency of 26.8%, the highest in the world, and Doosan Enerbility (034020: KR) ranks among the global top five in offshore wind turbine technology. LG Energy Solution (373220: KR) and Samsung SDI (006400: KR) hold the second and third largest market shares in the ESS (Energy Storage System) market, respectively.
However, the relatively weak domestic market base is a problem. As of 2024, the share of renewable energy generation in Korea is 9.2%, significantly below the OECD average of 30.1%. This creates a structure where companies must rely on overseas markets, which could negatively impact the speed of technology development and commercialization in the long term.
A similar pattern is emerging in the field of AI and renewable energy convergence. While individual technological capabilities of domestic companies are high, integrated solution development and demonstration projects are relatively lacking. For example, NVIDIA (NVDA: US) announced that its AI solutions revenue in the energy sector increased by 180% year-over-year in 2024, a result of focusing on building integrated platforms and ecosystems.
The necessity of “speed, consistency, and governance enhancement” mentioned by Chairman Cho becomes even clearer here. Technological prowess alone is insufficient to win in global competition; policy predictability and consistency must be supported to activate private investment and accelerate innovation. In Germany, the Renewable Energy Act (EEG) introduced in 2000 has maintained a consistent policy direction for over 20 years, establishing a renewable energy industry ecosystem.
Personally, I believe Chairman Cho’s approach of “separate but integrate” is a realistic solution. While differentiated policy support tailored to the characteristics of each technology is necessary, it is crucial to clarify the roles and linkages of each technology within the overall energy transition roadmap. For example, positioning solar and wind power for large-scale generation, and fuel cells and bioenergy for distributed and backup power, while integrating operations through ESS and smart grids.
Ultimately, the convergence of AI and renewable energy signifies a paradigm shift in the entire energy system, beyond mere technological combination. As of 2025, we are witnessing the early stages of this transformation, and the next 5-10 years will be a critical period in determining Korea’s position in the global energy transition competition. What I sensed from Chairman Cho’s interview was a coexistence of optimism about technological possibilities and concerns about policy realities, and such a balanced perspective might be what we need right now.
This article was written after reading the Untitled article, adding personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content is the author’s personal opinion. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.
