Low power supply approval rate
Power supply schedules are becoming a key variable for artificial intelligence (AI) data center projects because of the low rate of power supply approvals. Of 522 projects in the Seoul metropolitan area that applied for a review of whether power could be supplied, only 10 received final approval.
According to the Ministry of Climate, Energy and Environment on November 13, a total of 522 applications for initial technical reviews under power system impact assessments had been submitted in the Seoul metropolitan area through March 2026, representing requested capacity of 33,592 MW. Of these, only 10 projects, or 1.9% of the total, received final approval confirming that power could be supplied.
Development demand and rising rents
Demand for data center development continues despite limited power availability. According to Cushman & Wakefield's report on Asia-Pacific data center investment in 2026, released in September 2026, developing colocation data centers in South Korea is expected to require approximately $13.6 billion in capital expenditure through 2030. Annual rental revenue is expected to reach $4.1 billion in 2030.
As of the first half of 2026, pre-leased capacity at South Korean data centers stood at 255 MW, and development costs, including land costs, were estimated at approximately $13 million per MW. Pre-leasing involves customers contracting in advance for server space, power capacity and other resources before a data center is completed. However, even after contracts are signed, delays in power supply and facility construction can push back the actual start of service.
Meanwhile, rents at existing data centers in the Seoul metropolitan area continue to rise. According to commercial real estate services company CBRE Korea, average data center space rents in the metropolitan area increased by more than 70%, from approximately 140,000 won per kW in 2019 to approximately 250,000 won in 2025. The vacancy rate at data centers in the metropolitan area is below 5%.
Assessment exemptions and remaining construction requirements
To address the situation, the government plans to introduce special provisions for power system impact assessments of AI data centers outside the Seoul metropolitan area. A special act on promoting the AI data center industry, which takes effect on March 10, 2027, includes provisions for consolidated permitting and exemptions from power system impact assessments.
Under the special act, new AI data centers outside the metropolitan area, as well as expansions or conversions of existing facilities, may be exempt from power system impact assessments up to a specified power capacity. The specific exemption threshold will be set by presidential decree.
However, even if a project is exempt from a power system impact assessment, construction work to supply power must still proceed separately. Grid connection work linking the data center to the power network and expansion of transmission, distribution and substation facilities are required. Power equipment deliveries and the installation of cooling and backup power facilities must also be completed before operations begin. The government plans to prepare subordinate legislation, including capacity thresholds for assessment exemptions, before the special act takes effect.
Original Korean article: The Public
English brief by Korea Wind Intelligence, koreawindintel.com
