Need for Changes in Electricity Pricing Policy for AI Industry Development
Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry (KCCI), emphasized the necessity of reforming the electricity pricing system for the development of the artificial intelligence (AI) industry, stating that "prices should be higher in the metropolitan area and lower in rural regions," garnering attention.
During the '48th KCCI Summer Forum' held on the 18th at the Lahan Select in Gyeongju, Chairman Choi pointed out that 85% of the operating costs of AI data centers come from electricity fees, proposing the introduction of a differentiated pricing system based on proximity to power plants.
On this day, Choi remarked, "Factories cannot operate without energy, and the same applies to AI," stating that "operating AI requires a significant amount of energy."
He specifically referenced the data center constructed by SK Group in Gasan-dong, Seoul, describing the situation as "building a power plant" upon visiting it. He likened this facility to a "hippo consuming electricity," adding that substantial investment is necessary for backup facilities (UPS).
The Need for Reforming the Electricity Pricing System
Chairman Choi emphasized that since 85% of data center operating costs come from electricity fees, reducing electricity prices is essential for enhancing the competitiveness of the domestic AI industry.
He stressed the need to make electricity prices cheaper in South Korea, proposing a 'differentiated electricity pricing system based on distance.'
He explained, "The electricity pricing map needs to change," stating that areas close to power plants should have lower electricity prices, while those farther away should pay more. He continued, "Many people in the metropolitan area live quite far from power facilities, so they should pay higher prices," and pointed out the need to adjust business structures to allow cheaper electricity for areas near rural power plants.
Many people in the metropolitan area live quite far from power facilities, so they should pay higher prices.
Business structures need to be adjusted to allow cheaper electricity for areas near rural power plants.
To explain the validity of this differentiated pricing system, Chairman Choi used changes in oil pricing policy as an example.
He noted, "In the past, fuel prices were the same nationwide," adding that if one were to say that fuel prices are still uniform across the country, it would seem strange. He stressed that electricity pricing is ultimately a matter of energy and that energy policies should be flexibly adjusted to align with changes in technology and society.
Meanwhile, with the rapid advancement of AI technology, the electricity consumption of data centers has become a critical consideration in national energy policy.
Chairman Choi’s proposal is a way to achieve both the cultivation of the AI industry and balanced regional development, and it is expected to become an important topic in future energy policy discussions.
Image source: Left is Kakao CEO Jeong Shin-ah, right is Choi Tae-won, chairman of SK Group (KCCI chairman) / Photo provided by KCCI, Choi Tae-won, SK Group / SK Group, the scene of the AI global cooperation business meeting held on June 20 at the Ulsan Exhibition and Convention Center, where President Yoon Suk-yeol and Choi Tae-won observed the demonstration of AI products and services / Photo provided by the Presidential Office.
