The South Korean government has announced plans to invest KRW321 billion ($222.6 million) by 2026 to upgrade regional distribution networks, deploy 85 energy storage systems and expand solar energy integration, while testing microgrids and market reforms.
South Korea unveiled its next-generation distributed grid strategy at a recent discussion forum in Seoul, with plans to expand distributed generation and support region-specific electricity production and consumption. The Ministry of Climate, Energy and Environment said in an online statement that it will begin upgrading the regional distribution network to enable variable renewable energy and reduce congestion, deploying 85 energy storage systems by 2030 – starting with 20 units in 2026 – to enable an estimated 485 MW of additional solar connections, while small-scale storage installations will also support ‘sunlight revenue villages’.
Microgrids will be developed for medium and small loads, such as industrial complexes and university districts, to smooth demand and increase distribution network utilization. The authorities also want to reform connection rules and expand conditional renewable energy capacity to 16 MW per distribution line.
Korea Electric Power Corp. (Kepco) will act as a distribution system operator, using an advanced distribution management system to predict solar energy production and dynamically control storage loading to avoid overloading. The ministry claimed that a compensation scheme for no-wiring alternatives will reward storage operators when their systems replace the need for network construction, starting with a pilot in Jeju.
The government also noted that market reforms will begin in Jeju, including an energy demand bidding system that shifts consumption to applications such as power-to-heat and electric vehicle charging when renewable generation lowers prices. According to the ministry, a renewable energy bidding system tested in Jeju will be introduced sometime this year.
It said global investment in the electricity grid could reach $372 billion by 2030 and outlined plans for a domestic industrial ecosystem for the next generation of distributed networks. Universities, public energy companies and private companies will collaborate on the K-Grid talent and startup cluster, including a testbed for technology demonstration, and the government will organize the K-Grid Future Festival to support investments and research into virtual testbeds and AI-based multi-microgrid platforms.
At the forum, two cooperation agreements involving the ministry, Korea Energy Agency, Kepco and Korea Power Exchange were signed to improve the exchange of information and the operation of storage systems, as well as a separate agreement with four universities to support workforce development. Project operators for distribution network storage and microgrid installations are expected to be selected in the second quarter following a call for proposals in the first quarter.
The government’s distributed power grid roadmap fits within the broader, ongoing transformation of South Korea’s electricity system, where energy storage, digitalization and domestic generation capacity are emerging as strategic pillars.
Kepco’s completion of a 978 MW/889 MWh grid stabilization battery system in Miryang, South Korea, in 2024 – reportedly the largest in Asia – underlines how rapidly large-scale storage is being deployed to manage the variability of renewable energy sources and reduce system stress.
Supply chain coordination has also deepened in recent months. For example, in late 2025, seven South Korean inverter manufacturers, including OCI Power, Dass Tech, Ecos and Dongyang E&P, established a new industry association to address cybersecurity risks, harmonize standards and strengthen domestic production.
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