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Busan Metropolitan City Selected as Final Candidate Site for Korea’s First Distributed Energy Specialized Zone

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Busan Metropolitan City (Mayor Park Heong-joon) announced that the city has been selected as a final candidate site for Korea’s first “Distributed Energy Specialized Zone.”

In April, the Ministry of Trade, Industry and Energy received applications from 25 proposed zones across 11 cities and provinces. Following evaluations by the ministry’s working committee, seven regions—Busan, Ulsan, North Gyeongsang, Gyeonggi, South Chungcheong, South Jeolla, and Jeju—were chosen as final candidates. The final designation will be determined in June following deliberation by the Energy Committee.

If officially designated as a Distributed Energy Specialized Zone, Busan Metropolitan City will benefit from regulatory exemptions under the SPECIAL ACT ON ACTIVATION OF DISTRIBUTED ENERGY. This will allow implementation of innovative energy businesses previously restricted by the Electricity Business Act and Power Market Operation Rules.

The city plans to designate a 49.9 km² area in Gangseo-gu as a new industry activation-type distributed energy zone and build a large-scale shared energy storage system (ESS) “farm.”

The ESS farm is an innovative business model that overcomes limitations of conventional ESS—such as high initial investment costs and reduced efficiency—by constructing large-scale ESS facilities at a remote site and enabling virtual net metering transactions between the ESS and energy consumers.

Busan Metropolitan City aims to build and operate 250 megawatt-hours (MWh) of LFP (lithium iron phosphate) battery-based ESS by 2027, expanding to 500 MWh by 2030.

Key features include real-time demand response based on AI-driven analysis of seasonal and hourly electricity consumption patterns of local businesses, maximizing utilization rates compared to conventional ESS. Stored power can also be discharged to proactively supply power in situations involving sudden large-scale electricity demand, such as port shore power facilities (AMP).

The ESS farm will offer industrial complex companies reduced electricity bills and various subscription-based ESS services. This will help enhance the energy competitiveness of local industry and stimulate regional economic growth.

The city anticipates annual electricity cost savings of up to KRW 20 billion through power transactions enabled by the ESS farm. In addition, the large-scale ESS facilities will contribute to grid flexibility and energy supply stability.

Busan Metropolitan City will provide uninterruptible power supply (UPS) services utilizing ESS to data centers and high-tech companies. By absorbing surplus power during low consumption periods, the system will maximize energy efficiency and further promote industrial vitality through expanded ESS deployment, aligning with the rapidly growing global ESS market.

Mayor Park Heong-joon stated, “Securing a foundation for demonstrating and expanding new energy industries in areas such as Eco Delta City and Gangseo Industrial Complex is an encouraging achievement. We will focus all administrative capabilities on delivering tangible benefits to energy-consuming businesses through innovative energy models that were previously restricted by regulation, and we will strive to make Busan Metropolitan City a global leader in energy innovation.”