[Editorial] Pricing power

President Lee Jae Myung has said what most of his predecessors avoided: If South Korea is serious about cutting greenhouse gases, electricity must cost more.

On Aug. 14, Lee told aides that the public must be prepared for higher costs to meet climate targets. For a politician once critical of price hikes, the candor is striking — and politically perilous. Few policies are as explosive as a power bill.

The backdrop is the Paris Agreement, which requires nations to submit progressively tougher emissions pledges every five years. By September, South Korea must file its 2035 target, which is expected to aim for a 60-66 percent cut from 2018 levels. That trajectory is intended to keep global warming within 1.5 degrees Celsius and to set the stage for carbon neutrality by 2050.

For South Korea, that means phasing out coal and gas, expanding renewables, and investing heavily in transmission and storage. None of it comes cheap. Solar and offshore wind remain multiple times more expensive per kilowatt-hour than nuclear. The necessary infrastructure must be built before any savings materialize.

Holding down prices has been costly in its own right. Over the past two years, Korean households have enjoyed some of the lowest electricity rates in the OECD. At times, homes have even paid less per unit than factories — an inversion that distorts incentives.

State-run utility giant Korea Electric Power Corp. has absorbed the gap, amassing cumulative deficits exceeding 30 trillion won ($21.5 billion) and more than 200 trillion in debt. Artificially cheap power has also bred excess: South Korea is now the eighth-largest consumer of electricity globally and near the top in per capita use. Correcting these distortions would encourage efficiency, but it will also test public patience.

The case for restraint is no less serious. Industrial users have already seen electricity rates rise by roughly 70 percent over the past three years. Push further without relief, and the country’s exporters could lose ground just as global competition intensifies. Shift the burden too heavily to households, and the backlash could derail consensus on climate goals altogether.

The international context complicates the picture. Data centers built to serve artificial intelligence are straining power grids across the globe. Europe’s turn away from Russian gas has left it juggling high costs and fragile supply. Even nuclear, South Korea’s long-standing strength, faces risks as rising sea temperatures threaten cooling systems. Meanwhile, climate change itself is swelling demand: Successive summers of record heat are locking in more hours of air conditioning. Energy security now means securing reliable capacity as well as cleaner fuel.

What would a credible policy path look like? First, the government should set out a phased and predictable pricing road map, tied explicitly to the 2035 target. Predictability matters more than one-off shocks.

Second, support should be targeted: protect low-income households and small businesses directly, while channeling resources to help industry invest in efficiency and low-carbon processes rather than bluntly discounting power.

Third, accelerate the “plumbing” of the transition — new transmission corridors, modern storage and demand-response systems that reward consumers for shifting load. These steps are less visible than solar panels or offshore turbines, but just as decisive in lowering long-term costs.

Finally, transparency will be essential. People need to know how the budget is spent, what investments it enables and how progress is measured.

Lee is right that higher electricity prices are unavoidable. But appeals to “climate” alone will not justify steeper bills for households already strained by inflation. Koreans may accept paying more if they can see the bargain: cleaner air, a sturdier grid and a competitive industrial base. What they will not accept are hidden costs and broken promises.