There are growing calls to allow AI data center operators to sign direct power purchase agreements (PPAs) with liquefied natural gas (LNG) generators to meet surging electricity demand from AI data centers. Because AI data centers run thousands of graphics processing units (GPUs) around the clock and need stable power, the argument is that they are difficult to operate by expanding only renewable energy.
According to the Ministry of Science and ICT on the 22nd, the ministry projects data center power demand will reach 6.2 GW by 2030. The government's 11th Basic Plan for Electricity Supply and Demand, released last year, forecast data center power demand would reach 3.3 GW in 2030 and 6.2 GW in 2038, but surging AI demand is expected to push consumption far above earlier estimates.
The draft of the AI data center special law, which passed the National Assembly plenary session in May, included a plan to allow "direct LNG trading" to meet growing data center power demand. A direct PPA is a system in which corporations buy electricity by contracting directly with a generator instead of purchasing through Korea Electric Power Corporation, but under current law, direct PPAs are limited to renewable energy. Data center operators have said stable power supply is difficult with renewable energy, whose output fluctuates with the weather, and have called for LNG, which allows easier output control.
Accordingly, the draft special law allowed AI data center operators to conduct direct PPAs for other energy sources such as LNG, but the plan ultimately fell through due to opposition from the Ministry of Climate, Energy and Environment. The Ministry of Science and ICT viewed the special measure as necessary, but judged that passing the law took priority even if the provision was deleted.
However, with power demand surging faster than expected, momentum is again building for direct LNG PPAs. The city of Ulsan recently decided to push for regulatory changes with the government and the National Assembly to include LNG among the eligible sources for direct PPAs. SK Group and Amazon Web Services (AWS) are building an AI data center in the Ulsan Mipo National Industrial Complex.
In the National Assembly, lawmakers are discussing an amendment to the Special Act on Distributed Energy that would remove the 40 MW generation capacity cap for generators supplying power to AI data centers within distributed energy special zones and enable large-capacity direct PPAs. Under current law, generators can supply power directly in special zones, but the capacity is limited to 40 MW or less, making it difficult to meet the needs of large data centers that use hundreds of megawatts.
Bae Kyung-hoon, Deputy Prime Minister and Minister of the Ministry of Science and ICT, also said at a press briefing marking his first year in office at the Government Complex Sejong that LNG power supply is needed for data center electricity. Bae said, "To build 8.4 GW of AI data centers by 2029 and 15 GW by 2035, securing power is extremely important," adding, "We need to expand nuclear power, dramatically expand renewable energy, and although there is no agreement yet with the Ministry of Climate, Energy and Environment (MCEE), personally I think we should keep LNG on the table and create a 'data center-only rate plan.'"
Overseas, cases of AI data centers procuring power directly are increasing. xAI, Elon Musk's AI corporations, has installed and is operating natural gas turbines directly to bypass the wait for grid interconnection. Microsoft (MS) has gone so far as to secure an entire nuclear power plant. It decided to restart Unit 1 of the Three Mile Island nuclear plant in Pennsylvania, which had been offline, and exclusively purchase the electricity produced there for 20 years starting in 2028.
Jung Beom-jin, a professor in the Department of Nuclear Engineering at Kyunghee University, said, "Designing the system to allow direct PPAs only for renewable energy that is not supplied evenly 24 hours a day is not a technically sound measure," adding, "Big Tech companies such as Google have decided to sign direct PPAs with small modular reactor (SMR) plants to secure power." He also said, "The United States, through a 'Bring Your Own Generation (BYOG)' policy, encourages corporations to build their own generation facilities or secure power on their own when building data centers, but in Korea, the structure that allows bringing in generation sources and freely self-supplying is restricted."