In the farming village of Guyang-ri, just over an hour from Seoul, the energy transition is a shared lunch. Six days out of seven, residents gather at the table thanks to the proceeds from a one-megawatt solar power plant. “Ties are strengthened, life becomes more pleasant,” Jeon Joo-young, village leader, told the Guardian. The project generates about 10 million won a month and funds local services: meals, transportation for the elderly, social activities. The“solar income villages” model has become a policy lever for the South Korean government, which is determined to turn an energy vulnerability into an industrial opportunity.
The crisis as an accelerator
The tension in Iran and its effects on traffic in the Strait of Hormuz have made a structural fact clear: South Korea imports more than 90 percent of its primary energy. And about 70 percent of crude oil flows right through there to the Middle East.
President Lee Jae Myung spoke openly about the “fate of the nation” linked to the energy transition. The official target (20% electricity from renewables by 2030) already existed, but now the scale changes: more funds, more speed, more political pressure.
Through a supplementary budget, it has allocated about 500 billion won for the transition, bringing annual support to more than 1.1 trillion. Another 400 billion will finance subsidized loans for solar villages. The plan envisions 2,500 communities by 2030, with 700 new projects this year alone.
Saturated networks and bottlenecks
Acceleration, however, encounters physical limits. Southern regions-where solar and wind generation are concentrated-are close to grid saturation. Gigawatts of capacity remain waiting to be connected.According to economist Hong Jong Ho, the problem is systemic: artificially low electricity prices, administered by the Korea Electric Power Corporation (Kepco), have disincentivized infrastructure investment for years. “Many Koreans consider energy a cheap public good,” he explained. This means an unwillingness to accept the costs of the transition.In fact, building new high-voltage lines to the capital takes more than a decade and is met with local resistance: rural areas object to a model in which they host plants and infrastructure without receiving direct benefits on tariffs.
The solar race also uncovers another fragility: technological dependence on China, dominant in global panel production. The government has introduced requirements for domestic modules in local projects and assumptions of carbon footprint certification for imports. Defensive measures, but still partial.
The contradiction of subsidies
The most critical issue remains political. While financing the transition, the state continues to support fossil fuels. According to the organization Solutions for Our Climate, about 5 trillion won is earmarked for holding down oil prices, including direct subsidies to refineries. “The same government that suppresses price signals is asking citizens to save energy,” Gahee Han noted. A contradiction that reflects, according to environmentalists, a structure still geared toward protecting the fossil industry.
In the meantime, some coal plants see closure postponed and nuclear reactors are reactivated to ensure stability. Even after 2040, 21 coal-fired plants will receive payments for the availability of electrical capacity as an emergency reserve.
The case of Guyang-ri shows that transition produces tangible, redistributed benefits: the Middle East crisis has opened a window. Whether the fossil system can close it remains to be seen.
