Report Highlights

South Korea Gas Turbine Market: Market Overview

South Korea's gas turbine market operates within a tightly government-directed electricity sector dominated by Korea Electric Power Corporation, which controls transmission and distribution, and its six generation subsidiaries that collectively own the majority of installed gas-fired capacity. The 10th Basic Plan for Electricity Supply and Demand, published by the Ministry of Trade, Industry and Energy (MOTIE) in January 2023, designates liquefied natural gas combined cycle power plants as the primary dispatchable balancing technology to compensate for the intermittency of an expanding renewables portfolio, directly anchoring gas turbine procurement volumes through 2036. The market was valued at USD 1.82 billion in 2024 and is underpinned by replacement cycles at ageing plants commissioned in the 1990s alongside new-build requirements.

Private sector activity is expanding through independent power producers licensed under the Electric Utility Act, including SK E&S, GS Energy, and Posco International, which have commissioned merchant combined cycle plants competing on capacity market pricing set by the Korea Power Exchange. Internationally, GE Vernova and Siemens Energy have maintained dominant positions in heavy-duty turbine supply, while Mitsubishi Power holds a strong share in the combined cycle segment. However, Doosan Enerbility's domestically developed heavy-duty turbine programme, backed by KETEP funding exceeding KRW 300 billion, has materially shifted the competitive landscape since 2022, introducing a credible domestic alternative that MOTIE is actively mandating into public procurement where technically feasible.

Policy-Driven Growth in the South Korea Gas Turbine Market

The 10th Basic Plan for Electricity Supply and Demand is the primary legislative instrument driving gas turbine demand. Published under authority of the Electric Utility Act (Article 25), it mandates 4.5 GW of new combined cycle capacity by 2030 and targets retirement of ageing oil-fired units, which must be replaced with gas-fired equivalents under the Clean Air Conservation Act's tightened stack emission standards effective from 2025. This creates a structured replacement pipeline where utilities face statutory compliance deadlines rather than discretionary investment decisions. Each gigawatt of new combined cycle capacity requires approximately two to three heavy-duty gas turbines at the F- or H-class level, directly translating legislative targets into unit volumes.

The Korean New Deal and its successor Green New Deal 2.0, administered by MOTIE, allocate specific funding for domestically manufactured power generation equipment under the Industrial Technology Innovation Promotion Act. KETEP's Gas Turbine Technology Development Programme committed KRW 310 billion between 2013 and 2023 to bring Doosan Enerbility's 270 MW turbine to commercial readiness, and a follow-on hydrogen co-firing capability programme worth KRW 80 billion was initiated in 2024. The Capacity Payment Mechanism administered by the Korea Power Exchange guarantees revenue floors for dispatchable generators, reducing financing risk for new combined cycle projects and directly stimulating turbine procurement by independent power producers who would otherwise face merchant revenue uncertainty.

Regulatory Barriers and Compliance Costs

Market entry for foreign turbine manufacturers is constrained by the Public Procurement Service's domestic industry preference provisions under the Act on Contracts to Which the State Is a Party. For KEPCO subsidiary tenders, domestically certified equipment receives a price preference of up to 10%, and for projects receiving KETEP co-funding, a domestic content requirement of no less than 40% by value is imposed. The Korea Electric Safety Corporation administers equipment safety certification under the Electrical Safety Management Act, and obtaining type certification for a new turbine model requires approximately 18 to 24 months and testing fees that can exceed KRW 2 billion, creating a substantial timeline and cost barrier for foreign manufacturers launching new models in the Korean market.

Environmental compliance costs are rising significantly under the Special Act on the Improvement of Air Quality in and around the Seoul Metropolitan Area and the Integrated Environmental Management Act. Gas turbines operating in the Seoul metropolitan region must meet nitrogen oxide emission limits of 15 ppm, down from 25 ppm prior to the 2023 revision, enforced by the Ministry of Environment through the Integrated Permit system. Retrofitting selective catalytic reduction systems to existing turbines to meet this standard costs between USD 8 million and USD 15 million per unit depending on capacity. Operators who fail to obtain a revised Integrated Permit by the 2026 compliance deadline face mandatory curtailment orders, forcing accelerated capex decisions across the fleet.

Policy-Created Opportunities in South Korea

The most immediate policy-created opportunity lies in KEPCO's planned replacement of approximately 3.2 GW of legacy oil and coal-fired capacity with gas combined cycle units between 2025 and 2030, as mandated by the 10th Basic Plan. MOTIE's Renewable Energy 3020 Implementation Plan requires dispatchable backup capacity to grow proportionally with solar and wind additions, and gas turbines are the designated technology for this balancing role pending commercial-scale energy storage deployment. Turbine suppliers and project developers who secure positions in KEPCO's pre-qualified vendor lists before the 2026 procurement cycle will capture the dominant share of this replacement pipeline, as tender periods for large combined cycle projects can lock in equipment supply for four to six years.

The government's Hydrogen Economy Roadmap, updated in 2023, creates a forward opportunity in hydrogen-capable turbine technology. MOTIE's Hydrogen Safety Management Act, enacted in 2020 and amended in 2023, establishes a certification framework for hydrogen fuel use in industrial combustion equipment, and KEPCO Engineering and Construction is currently developing specifications for hydrogen co-firing retrofits to existing H-class turbines at the Boryeong and Dangjin combined cycle sites. Suppliers capable of offering certified hydrogen co-firing burner kits, demonstrated at blending ratios of 20% to 30% by volume, are eligible for preferential evaluation scoring in public tenders under MOTIE's 2024 procurement guidelines, creating a technically specific and near-term commercial window.

Market at a Glance

Leading Market Participants

• Doosan Enerbility
• GE Vernova
• Siemens Energy
• Mitsubishi Power
• Korea Electric Power Corporation (KEPCO)
• SK E&S
• GS Energy
• Posco International
• Ansaldo Energia
• Hanwha Power Systems

Regulatory and Policy Environment

The primary legislative framework governing gas turbines in South Korea is the Electric Utility Act (전기사업법), administered by MOTIE, which establishes licensing requirements for power generation businesses, mandates participation in the Korea Power Exchange dispatch system, and authorises the Basic Plan for Electricity Supply and Demand as a binding policy instrument updated every two years. Gas turbine installations above 10 MW require a power business licence from MOTIE, an environmental impact assessment under the Environmental Impact Assessment Act, and an Integrated Environmental Permit from the Ministry of Environment. The Electrical Safety Management Act, enforced by the Korea Electric Safety Corporation, requires periodic safety inspections every four years for turbines above 1 MW, with failure to comply triggering mandatory shutdown orders.

Compared to regional peers, South Korea's regulatory framework is among the most centralised in Northeast Asia. Japan operates a liberalised capacity market through OCCTO with multiple regional operators, whereas South Korea's KEPCO monopsony in transmission gives MOTIE substantially greater leverage over generation technology choices. Taiwan's Taipower maintains a comparable centralised structure but lacks South Korea's domestic turbine manufacturing ambition. Upcoming regulatory changes include a planned revision to the Integrated Environmental Management Act in 2026 that will extend NOx limits of 15 ppm to all metropolitan-adjacent sites, not only Seoul, expanding compliance retrofit demand across the national fleet. MOTIE is also expected to formalise hydrogen co-firing standards for gas turbines under amended Hydrogen Safety Management Act guidelines by late 2025.

Long-Term Policy Outlook for the South Korea Gas Turbine Market

By 2032, the South Korea gas turbine market will be materially shaped by the government's 2050 Carbon Neutrality roadmap, which classifies gas-fired power as a transitional technology eligible for continued deployment only when coupled with carbon capture utilisation and storage or hydrogen co-firing above 50% by volume. MOTIE is expected to introduce a Carbon Intensity Standard for dispatchable generators by 2028, setting a maximum of 350 grams of CO2 per kilowatt-hour, which will force operators to either retrofit existing combined cycle plants with CCUS or accelerate the transition to hydrogen-capable turbine configurations. This creates a sustained aftermarket and retrofit revenue stream alongside reduced but ongoing new-build procurement through the 11th and anticipated 12th Basic Plans.

Doosan Enerbility's ambition to export its domestically developed turbine technology to Southeast Asian markets, backed by MOTIE's trade promotion framework and KEXIM financing, adds a manufacturing dimension to the long-term outlook that extends beyond domestic procurement volumes. If export commercialisation succeeds in markets such as Vietnam and the Philippines, where gas capacity expansion is policy-driven, South Korea's domestic turbine supply chain, including precision component suppliers concentrated in the Changwon industrial district, will expand capacity irrespective of domestic demand plateaus. The government's designation of gas turbine manufacturing as a national strategic technology under the Special Act on Strengthening National Competitiveness in Industrial Technology ensures continued R&D co-investment and preferential financing access through 2035.

Market Segmentation

By Turbine Type

• Heavy-Duty Gas Turbines
• Aeroderivative Gas Turbines
• Small Gas Turbines
• Micro Gas Turbines

By Application

• Power Generation
• Combined Heat and Power
• Mechanical Drive
• Oil and Gas Processing
• Industrial Utilities

By Technology

• Combined Cycle
• Open Cycle (Simple Cycle)
• Cogeneration
• Hydrogen Co-Firing

By End User

• Utilities and State-Owned Enterprises
• Independent Power Producers
• Heavy Industry
• Petrochemical Sector
• District Energy Operators

Frequently Asked Questions

Q1. Which government body issues power generation licences for gas turbine projects in South Korea? ▼

The Ministry of Trade, Industry and Energy issues power business licences under the Electric Utility Act for generation facilities above 10 MW. Applicants must also secure an Integrated Environmental Permit from the Ministry of Environment before construction commences.

Q2. What emission standards apply to gas turbines operating in the Seoul metropolitan area? ▼

Under the Special Act on the Improvement of Air Quality in and around the Seoul Metropolitan Area, gas turbines must meet a nitrogen oxide limit of 15 ppm as of the 2023 regulatory revision. Operators failing to comply by the 2026 deadline face mandatory curtailment enforced by the Ministry of Environment.

Q3. How does the domestic content requirement affect foreign turbine suppliers bidding on KEPCO tenders? ▼

For projects receiving KETEP co-funding, the Act on Contracts to Which the State Is a Party requires a minimum 40% domestic content by value. Foreign suppliers must establish local manufacturing partnerships or component sourcing agreements to remain eligible for these tenders.

Q4. What is the role of the Korea Power Exchange in shaping gas turbine investment decisions? ▼

The Korea Power Exchange administers the Capacity Payment Mechanism, which provides revenue guarantees to dispatchable generators including gas combined cycle plants. This mechanism directly reduces financing risk for new turbine projects, enabling independent power producers to secure project debt at viable terms.

Q5. When is the next revision to South Korea's Basic Plan for Electricity Supply and Demand expected? ▼

The Basic Plan is updated every two years under Article 25 of the Electric Utility Act, making the 11th Basic Plan due for publication in 2025. This revision is expected to set gas turbine capacity targets for the 2031–2038 period and will incorporate updated hydrogen co-firing deployment schedules.