A special act to promote the artificial intelligence (AI) data center industry cleared its first hurdle in the National Assembly. With the bill, which had been stalled for a time due to differences among government ministries over whether to allow power purchase agreements (PPAs) with power producers, passing the subcommittee on bill review, discussions on expanding AI infrastructure and dispersing facilities outside the greater Seoul area are expected to pick up speed again.
According to the industry on the 25th, the National Assembly's Science. ICT. Broadcasting. and Communications Committee held a subcommittee on bills on the 24th and approved an alternative after conducting a combined review of related bills proposed by ruling and opposition lawmakers.
The special act reportedly defines AI data centers as core infrastructure directly tied to national competitiveness and includes streamlined permitting procedures, tax benefits, and support for securing power, water, and sites. The industry cites power-related exceptions as the practical centerpiece. Given that the business viability of AI data centers—whose power consumption is massive—now hinges more on securing electricity than on securing sites, many inside and outside the industry are effectively calling this bill the "PPA act." Specifically, the alternative includes an exceptional measure allowing direct power trading PPAs with renewable energy and LNG power producers.
The industry also sees the subcommittee's approval as more than just handling a support bill for the sector. If the bill finally passes, AI data centers outside the greater Seoul area would have a pathway to securing power at relatively long-term, predictable prices near power plants.
With the spread of Generative AI driving a surge in graphics processing unit (GPU) servers and large-scale computing demand, the prevailing view in the industry is that the success of hyperscale AI data center projects depends on how cheaply and stably they can secure electricity. According to the industry, the annual electricity bill alone for a 1 GW-class AI data center is estimated at around 1 trillion won. The United States, Japan, and major Southeast Asian countries allow PPAs for large data centers so they can sign direct long-term contracts with power producers for the same reason.
Chae Hyo-geun, vice chair of the Korea Data Center Alliance, said, "Given the business structure's heavy power-cost burden, if power exceptions outside the greater Seoul area become a reality, the economics of regional sites could stand out more than those in the capital area," adding, "This will open the floodgates for dispersing AI data centers to the regions."
The main reason the bill has not advanced faster was coordination among government ministries rather than major differences between the parties. In particular, the Ministry of Climate, Energy and Environment was said to have maintained the position that it is preferable to address exemptions from power system impact assessments and PPA exceptions within the existing distributed energy framework rather than in a separate special act solely for AI data centers. The logic is that setting standards for power system impact assessments in the Special Act on the Promotion of Distributed Energy, not in the data center special act, is more appropriate for policy coherence and business convenience.
The ministry has also viewed PPAs as something that should utilize existing systems rather than be broadened through industry-specific exceptions. Given that power supply-and-demand conditions differ by region, granting direct-trading exceptions through a separate special act only for AI data centers could raise issues of policy consistency and fairness. In particular, because direct power trading is possible to a certain extent under the distributed energy special zone system, the judgment appears to be that there is no need to create a separate exception through an AI data center special act.
The industry has taken the opposite view. Without PPA exceptions, there would be little incentive to build AI data centers near regional power plants, ultimately increasing the burden of expanding transmission and distribution networks just to meet demand in the capital area. Steering new large-scale demand to non-capital regions and dispersing both power and industrial sites, they argue, is the path that actually reduces strain on the grid.
Variables remain before final passage. The bill must go through the full meeting of the Science, ICT, Broadcasting and Communications Committee, The National Assembly's Legislation and Judiciary Committee, and the plenary session in sequence. An industry official said, "Although it cleared the subcommittee hurdle, differences within the government over the scope of power-related exceptions and consistency with the existing distributed energy framework have not been completely resolved, leaving room for friction in follow-up discussions."