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Korea Herald
25-06-2025
- Business
- Korea Herald
SMRs return to Korea's energy mix amid AI-driven power surge
Amid surging demand and limited grid capacity, SMRs emerge as controversial but viable option Small modular reactors or SMRs are reemerging in the national energy conversation as South Korea reevaluates its energy strategy, driven by a sharp rise in electricity demand from artificial intelligence and data center expansion. The new liberal administration under President Lee Jae Myung, who took office earlier this month, has expressed cautious support for SMRs. This marks a shift from the Democratic Party of Korea's stance under the Moon Jae-in administration, which pursued a nuclear phase-out. While Lee has reiterated his opposition to expanding large-scale nuclear power, he views SMRs as a pragmatic, flexible energy solution compatible with Korea's decarbonization and energy security goals. SMRs are advanced nuclear reactors that generate up to 300 megawatts of electricity — about one-third the capacity of traditional nuclear plants. Their compact, factory-built design allows for modular deployment in remote or space-limited locations, making them an attractive alternative for industrial zones, small communities and even energy-intensive tech facilities. SMRs use the same basic fission process as conventional reactors but are engineered for simpler, safer and more scalable use. The growing appeal of SMRs also stems from their potential to address the surging power demands driven by AI technology. South Korea is expected to add 732 new data centers by 2029, requiring a combined 49.4 gigawatts of contracted power. This is equivalent to more than half of the nation's peak capacity in 2022, according to the Industry Ministry. As global tech firms look to low-carbon energy to power their operations, SMRs have emerged as a viable candidate to meet such needs. In line with this shift, Democratic Party lawmaker Hwang Jung-a on June 12 proposed a bill titled the 'SMR Special Act,' which seeks to establish a national roadmap for SMR development. The legislation includes provisions for administrative, technical and financial support for research and development projects, private-sector participation, workforce training and public engagement. 'This is a legislative measure in response to what advanced countries such as the US, UK, and Canada are already doing to support SMRs,' Hwang said. However, the renewed push for SMRs has sparked concern among environmental groups. The Korea Federation for Environmental Movements issued a statement calling SMRs a 'delusion of the nuclear industry,' raising safety concerns over radiation risks, particularly when reactors are located near urban centers. Critics also argue that SMRs may have higher costs per kilowatt-hour than traditional nuclear plants and still produce radioactive waste without a clear disposal strategy. Despite the criticism, advocates argue that SMRs offer advanced safety features, including passive cooling systems that allow reactors to shut down safely without external power in the event of an emergency. 'SMRs are the optimal energy source for addressing the climate crisis, energy security and the AI era,' said Korean Nuclear Society President Lee Ki-bog. Korea's Nuclear Safety and Security Commission is also stepping in to support the shift. The agency announced plans to develop a regulatory framework to back the government's 'i-SMR' project. Korea Hydro & Nuclear Power, the country's state-run utility, aims to secure regulatory approval by 2028. Experts say that while Korea already possesses world-class nuclear technology, its industrial base remains narrow. 'Nuclear energy supplies around 30 percent of Korea's electricity, but only accounts for 10 percent of total fuel costs,' said Kim Sung-joong, a professor of nuclear engineering at Hanyang University. 'If the share of nuclear energy were increased to 50 percent, we could cut energy import costs by up to 11 trillion won ($8 billion).'
Korea Herald
16-06-2025
- Business
- Korea Herald
[Editorial] Expand supply
Seoul apartment prices hit a record high as presales shrink, liquidity surge looms The Korean housing market is showing signs of heating up. Last week, Seoul apartment sale prices rose 0.26 percent from the previous week, according to data from the Korea Real Estate Board. It was the highest weekly increase since August last year. Seoul apartment sale prices have moved up for 19 consecutive weeks. The upward trend of apartment prices in parts of Seoul is threatening to spread to areas of nearby Gyeonggi Province with large populations, such as Gwacheon and Bundang. The government had an emergency meeting Friday to check the real estate market. There are many factors behind the recent surge in housing prices, but its root cause lies in a supply shortage. This year, presales of new Seoul apartments decreased 28 percent year-over-year to 7,350 units, the smallest number in four years. In Seoul or densely populated areas like Seoul, new apartments are supplied through reconstruction or redevelopment. Spare units to be built, except units for existing landowners, are presold in installments to the general public. Expectations for expansion of liquidity supply stimulate the sentiment of investment in the real estate market. Many anticipate the Bank of Korea to cut the benchmark interest rate from the current 2.5 percent to 2.0 percent in the second half out of concerns about economic recession. Liquidity is scheduled to increase when the government expends an additional supplimentary budget worth at least 20 trillion won ($14.6 billion). The budget plan to be unveiled soon will include local currency vouchers to be handed out to every Korean, a key campaign promise by President Lee Jae-myung. The surge in Seoul apartment prices is also affected by the last-minute jump in the issuance of housing loans. People rush to take out mortgage loans to buy homes before strengthened repayment requirements are implemented next month. Last month, mortgage loans increased to 5.6 trillion won, the largest in eight months. It is difficult to ignore people's expectation that housing prices will likely shoot up while the Democratic Party of Korea is in power, as they experienced in the Moon Jae-in administration. People seem to believe that the real estate policies of liberal governments tend to be focused on curbing demand, which drives up home prices. In fact, the Moon government treated owners of multiple homes like criminals. It took policies to impose heavy taxes on landlords and multihouse owners, lower presale prices of new apartments and tax "excess" profits from reconstruction. If apartment presale prices are mandatorily set below the market value of nearby apartments, advance buyers could make a profit, while existing homeowners shoulder the greater burden of reconstruction costs. These measures distressed multihome owners in particular, but only drove them into selling their homes in less expensive areas and owning a single home in the most expensive areas, such as well-to-do districts of Seoul. As a result, housing prices in Gangnam and a few other affluent areas of the capital skyrocketed, sending home prices rising across Seoul more broadly. Fortunately, President Lee pledged to vitalize reconstruction and redevelopment and avoid regulating homeowners with taxes. Yet, a "buy homes first" atmosphere is strong. The government said that if housing price instability continues, it would consider expanding the regulated area where land trade is restricted. However, policies to hold down demand have limitations. They could hike up property prices near the regulated areas. The first thing to do is draw up a blueprint for supply expansion. Though it is impossible to increase housing supply immediately, the government could calm uneasiness in the market just by showing a clear policy direction. Developing unpopular areas far from Seoul will have a limited effect. High-demand areas need to be developed first. Reconstruction restraints in popular areas should be reconsidered to increase supply. The new government should avoid repeating the policy error of regulating the market thoroughly. Restraining demand without expanding supply when prices keep rising instigates housing price hikes. That is a lesson that leftist liberal governments of the past have left behind.
Korea Herald
12-06-2025
- Politics
- Korea Herald
Lee taps next-gen officials for foreign policy team ahead of G7 trip
Former vice foreign minister under Moon reportedly set for top post President Lee Jae-myung's foreign policy team is taking shape ahead of his diplomatic debut at the G7 summit, with the surprising appointment of relatively young vice ministers in a break with Korea's long-established system of seniority. At the same time, veteran diplomat Cho Hyun, who previously served as both first and second vice minister, as well as UN ambassador, under the liberal Moon Jae-in government, concurrent with the first Trump administration, has all but secured his place as the leading candidate for foreign minister. The Foreign Ministry appeared to find the presidential office's announcement on Tuesday unexpected, as Park Yoon-joo — appointed first vice foreign minister — had a shorter career in the civil service than several officials who would now report to him. Park passed the 29th foreign service exam in 1995, making him 11 years junior to his predecessor, Kim Hong-kyun, who passed the 18th foreign service exam. In terms of years of service since passing the foreign service exam, Park is also the junior of the current deputy ministers for political affairs, protocol affairs, and planning and coordination — all of whom he now directly oversees. At the Foreign Ministry in Seoul, where a rigid seniority-based culture prevails, it is considered virtually unprecedented for someone so junior in years of service to be appointed as first vice foreign minister, overseeing bilateral affairs and personnel management. However, Park is not the youngest person to serve as first vice minister; the previous Moon Jae-in administration appointed Choi Jong-kun to the post in 2020 when he was just 46 years old. Park reportedly has a long-standing relationship with National Security Adviser Wi Sung-lac, dating back to their time working together at the presidential office. When Wi was dispatched from the Foreign Ministry to the transition committee during the Roh Moo-hyun administration in 2002 and 2003, Park was serving at Cheong Wa Dae, the presidential office and residence also known as the Blue House. In 2004, when Wi was posted to Washington as minister at the South Korean Embassy, Park also served alongside him as first secretary at the same embassy. Park's most recent position was minister at South Korea's mission to the Association of Southeast Asian Nations, but most of his career has been devoted to diplomacy vis-a-vis the US. Park has served as first secretary at the Embassy in Washington, director of North American Affairs, deputy consul general at the Korean Consulate General in Boston, deputy director-general at the Bureau of North American Affairs, and consul general in Atlanta. Kim: From academia Kim Jina, a professor in the Department of Language and Diplomacy at Hankuk University of Foreign Studies, was appointed second vice foreign minister, overseeing multilateral and economic affairs. Born in 1979, Kim is also younger than most director-general-level officials who head the bureaus, serving as the ministry's backbone. Her predecessor, Kang In-sun, was born in 1964. Kim played an active role in the 'Responsible Global Power Committee,' which helped shape Lee Jae-myung's foreign, security and unification policies during his presidential campaign, serving as vice chair of the committee's Practical Diplomacy Subcommittee. The committee was co-chaired by Lee Jong-seok, the current nominee for director of the National Intelligence Service and former unification minister under the Roh Moo-hyun administration, as well as Rep. Cho Jeong-sik of the Democratic Party of Korea. "The international community hopes that Korea, as a responsible member, will be more involved in and contribute further to resolving global issues," Kim said in her inauguration speech Wednesday. "The reason the new administration set forth pragmatic diplomacy with the aim of becoming a globally responsible power is precisely to meet these demands of the times." Cho: Trade veteran Cho Hyun, a career diplomat with extensive experience in multilateral diplomacy and trade, has been tipped as the Lee administration's first foreign minister, according to multiple sources. Cho was active in the Responsible Global Power Committee as well as the Special Committee on Northeast Asian Peace and Cooperation, chaired by Wi, which serves as the Democratic Party's main body overseeing security affairs and North Korea issues. Cho's diplomatic career includes ambassador to India in 2015, as well as ambassador to Austria and permanent representative to international organizations in Vienna in 2011. Cho also held the post of deputy permanent representative to the UN in New York in 2006. Within the Foreign Ministry, Cho has held numerous high-level positions, including deputy minister for multilateral and global affairs, ambassador for energy and resources, and director-general of the Ministry's International Economic Affairs Bureau. Cho was involved in negotiations for a Korea-Japan free trade agreement and served as chief negotiator for the Korea-Mexico FTA. As ambassador to India — a major emerging market — in 2015, he worked to strengthen economic cooperation between the two countries.
Korea Herald
11-06-2025
- Politics
- Korea Herald
Lee's Foreign Ministry: Young vice ministers in, Moon-era No. 2 tipped for top post
President Lee Jae-myung's foreign policy team is taking shape ahead of his diplomatic debut at the G7 summit, with the surprising appointment of young vice ministers that breaks with Korea's long-established seniority system. At the same time, veteran diplomat Cho Hyun, who previously served as both first and second vice minister, as well as UN ambassador, under the liberal Moon Jae-in government and during the first Trump administration, has all but secured his place as the leading candidate for foreign minister. The Foreign Ministry was startled by the presidential office's announcement on Tuesday that Park Yoon-joo would be appointed as first vice foreign minister, as his serving period was shorter than that of officials who would now serve under him. Park passed the 29th foreign service exam in 1995, making him 11 years junior to his predecessor, Kim Hong-kyun, who passed the 18th foreign service exam. In terms of years of service since passing the foreign service exam, Park is also the junior of the current deputy ministers for political affairs, protocol affairs, and planning and coordination — all of whom he now directly oversees. At the Foreign Ministry in Seoul, where a rigid seniority-based culture prevails, it is considered virtually unprecedented for someone so junior in years of service to be appointed as first vice foreign minister, overseeing bilateral affairs and personnel management. However, Park is not the youngest person to serve as first vice minister; the previous Moon Jae-in administration appointed Choi Jong-kun to the post in 2020 when he was just 46 years old. Park reportedly has a long-standing relationship with National Security Adviser Wi Sung-lac, dating back to their time working together at the presidential office. When Wi was dispatched from the Foreign Ministry to the transition committee during the Roh Moo-hyun administration in 2002 and 2003, Park was serving at the Cheong Wa Dae, the presidential office and residence, which is also known as the Blue House. In 2004, when Wi was posted to Washington as minister at the South Korean Embassy, Park also served alongside him as first secretary at the same embassy. Park's most recent position was minister at South Korea's mission to the Association of Southeast Asian Nations, but most of his career has been devoted to diplomacy vis-a-vis the US. Park has served as first secretary at the Embassy in Washington, director of North American Affairs, deputy consul general at the Korean Consulate General in Boston, deputy director-general at the Bureau of North American Affairs, and consul general in Atlanta. Kim Jina, a professor in the Department of Language and Diplomacy at Hankuk University of Foreign Studies, was appointed second vice foreign minister, overseeing multilateral and economic affairs. Born in 1979, Kim is also younger than most director-general-level officials who head the bureaus, serving as the ministry's backbone. Her predecessor, Kang In-sun, was born in 1964. Kim played an active role in the 'Responsible Global Power Committee,' which helped shape Lee Jae-myung's foreign, security and unification policies during his presidential campaign, serving as vice chair of the committee's Practical Diplomacy Subcommittee. The committee was co-chaired by Lee Jong-seok, the current nominee for director of the National Intelligence Service, an expert on North Korea and former unification minister under the Roh Moo-hyun administration, as well as Rep. Cho Jeong-sik of the Democratic Party of Korea. Cho: Trade veteran Cho Hyun, a veteran career diplomat with extensive experience in multilateral diplomacy and trade, has been tipped as the Lee administration's first foreign minister, according to multiple sources. Cho worked for the Responsible Global Power Committee, which was led by Lee Jong-seok, as well as the Special Committee on Northeast Asian Peace and Cooperation, chaired by Wi. The latter serves as the Democratic Party's main body for overseeing security affairs and for setting the direction of its North Korea policy and approach to the North Korean nuclear issue. Cho's diplomatic career includes ambassador to India in 2015, as well as ambassador to Austria and permanent representative to international organizations in Vienna in 2011. Cho also held the post of deputy permanent representative to the UN in New York in 2006. Within the Foreign Ministry, Cho has held numerous high-level positions, including deputy minister for multilateral and global affairs, ambassador for energy and resources, and director-general of the Ministry's International Economic Affairs Bureau. Cho was involved in the Korea-Japan free trade agreement negotiations and served as chief negotiator for the Korea-Mexico FTA. As ambassador to India — a major emerging market — in 2015, he worked to strengthen economic cooperation between the two countries.
Korea Herald
11-06-2025
- Business
- Korea Herald
FTC prepares to expand as Lee vows crackdown on unfair corporate practices
New administration aims to tighten oversight of platform giants, chaebol groups accused of unfair market dominance President Lee Jae-myung's recent call to strengthen the Fair Trade Commission is expected to accelerate regulatory scrutiny of unfair practices by major platform operators and conglomerates, particularly those impacting small and medium-sized enterprises. The antitrust regulator has begun internal discussions to identify areas where personnel reinforcements are most needed, according to industry sources on Wednesday. The move follows President Lee's first Cabinet meeting last week, where he highlighted the need to expand the agency's workforce as part of the administration's broader government restructuring agenda. As of the end of 2023, the FTC's civil servant headcount stood at 650 -- ranking 19th out of 27 agencies under the Prime Minister's Office. That figure is equivalent to roughly 60 percent of the 1,109 employees at the Ministry of Economy and Finance. 'In line with the president's directive, we are currently identifying which divisions require additional staffing and to what extent,' an FTC official said. 'The process will take time due to the need for statistical analysis and internal assessments.' Observers within and outside the government speculate that President Lee is particularly focused on expediting investigations into platform-related abuses. During his campaign, he pledged to bolster protections for platform-affiliated merchants and to reinforce the social and economic accountability of tech giants. The administration is also expected to revive legislative discussions about the proposed 'Online Platform Fairness Act,' which aims to establish legal frameworks for regulating online marketplaces. Sources close to the matter suggest that it could lead to the creation of a dedicated 'online platform bureau' within the FTC to centralize related cases and policymaking. Lee Jung-hee, a professor at the School of Economics at Chung-Ang University and a former non-standing commissioner of the FTC, expressed support for the new administration's policy direction but emphasized that stronger enforcement capabilities are needed for the antitrust regulator to gain momentum. 'I believe the policy measures announced by the new government are promising,' Lee said. 'However, investigations should not be limited to filed complaints. Without sufficient personnel, such efforts could diminish, weakening the agency's responsiveness.' Highlighting the growing significance of digital platforms, Lee proposed the creation of a dedicated division within the FTC. 'As platform-related cases are rapidly increasing, it's time to establish a specialized platform bureau similar to the business group monitoring bureau that was introduced under the Moon Jae-in administration,' he said. At the same time, enforcement actions by the FTC's business group monitoring bureau -- launched under the Moon Jae-in administration to pursue chaebol reform -- are expected to gain momentum. President Lee has consistently advocated for stricter oversight of intra-group transactions and abuse of market dominance by conglomerate owners, particularly where such behavior disadvantages small-scale market participants. The FTC is currently investigating allegations involving major platform firms such as Baemin and Coupang Eats over their preferential treatment requirements, as well as Coupang's delayed merchant settlements. Among large business groups, CJ, HDC Hyundai Development and Lotte are undergoing probes for suspected unfair internal support schemes. Lee Hwang, dean of the Korea University School of Law, said the eventual content of the Online Platform Fairness Act will serve as a litmus test for the administration's fair economy agenda. 'The president's intent to simultaneously promote fairness and growth through market autonomy is clear,' he said. 'To that end, the FTC will inevitably need to play a more prominent role and its influence over the economy's fairness is likely to expand significantly.'
