[Power Industry Transformation] ① Back to the Age of Edison... Major Shift from AC to DC with 'HVDC'

Advantageous for Long-Distance Transmission and Renewable Energy Integration
Major HVDC Investments by Korean Companies Including LS
Government Drives Localization, Power Industry Enters New Phase
"HVDC Industry Expected to See Explosive Gr

Editor's NoteThe power industry is emerging as a leading sector for Korea, following the automotive and semiconductor industries. For a long time, electricity played only a supporting role in the industrial sector. However, with the explosive growth in power demand driven by artificial intelligence (AI) data centers, electric vehicles, and the spread of renewable energy, Korean industry is now in the global spotlight. The four major domestic power equipment companies, including LS Electric, have secured orders worth a total of 33 trillion won. The sector has established itself as a growth industry, contributing to exports and job creation. The focus within the power industry is now on how to secure a virtuous cycle structure. Securing direct current (DC) related technology for more efficient transmission has become a key challenge. This article examines the challenges facing Korean companies as the power industry undergoes a major transformation.

LS Electric recently won the contract to supply converter transformers for phases 1 and 2 of the East Coast-Metropolitan Area high-voltage direct current (HVDC) project. In 2011, the company invested 110 billion won to build Korea's first dedicated HVDC plant in Busan and has since been working to localize core equipment.

This year, LS Electric will invest about 100.8 billion won to add a second production building at its Busan facility. The second production building will be constructed on a 13,223-square-meter site and will begin operations as soon as construction is complete. With the addition of this production line, the annual production capacity for ultra-high voltage transformers at the Busan plant will expand from 200 billion won to 600 billion won. Once the factory is fully operational, LS Electric will have a mass production system capable of supplying all HVDC transformers required for the West Coast Energy Expressway project.

High-voltage testing is underway for LS Electric's HVDC (High Voltage Direct Current) CTR (Converter Transformer). LS Electric.

LS Electric is expanding its HVDC transformer production facilities to gain an edge in the era of direct current. Since the "War of Currents" between Edison and Tesla in the 1880s, alternating current (AC) has dominated the power market for over a century. AC prevailed because it was more advantageous than DC for long-distance transmission. However, it has faced challenges such as complex waveform control and voltage maintenance, and inefficiencies have accumulated throughout the generation, transmission, and transformation processes.

Furthermore, as power sources with high output volatility, such as wind and solar, have expanded, cases of instability in AC-based grids have been reported in many countries. This is because the AC grid, which is sensitive to frequency and phase changes, requires enormous adjustment costs to maintain power quality. Advances in technology have also significantly improved the shortcomings of direct current (DC) in energy transmission.

With the full-fledged arrival of the direct current era, investment in power infrastructure is also entering a phase of rapid expansion. The supply of key equipment such as transformers, cables, and valves is increasing quickly. At the heart of this technology is HVDC.

The Korean government is promoting the localization of HVDC-related technology through public tenders for domestic companies. Currently, most of the key HVDC equipment-transformers, converters, and cables-is supplied by foreign companies, resulting in high dependence on overseas sources. Localization is considered essential not only to break away from a market structure dominated by global companies and lead core businesses, but also to improve cost efficiency. The Yangju back-to-back (BTB) HVDC project, completed earlier this year, and the Southwest Sea project, which has begun design, are being developed as localization models through public tenders for lead organizations.

Direct Current Surges Amid the Wave of Renewable Energy and AI

Globally, as the expansion of renewable energy and the drive for carbon neutrality increase demand for transmission infrastructure, and as power demand from ultra-large data centers surges, HVDC investment is accelerating. In particular, as offshore wind and solar power facilities are located far from urban centers, the importance of long-distance transmission infrastructure to connect them is growing. A national transmission plan report by the U.S. Department of Energy (DOE) recommended, "To achieve carbon neutrality by 2050, transmission infrastructure must be expanded by 3.5 times compared to 2020."

HVDC technology converts AC to DC for transmission and then back to AC for supply. The advancement of "power semiconductors" has played a major role in the shift to DC. In the past, DC had limited scalability due to difficulties in voltage conversion compared to AC, but recently, high-voltage DC conversion and control technologies have improved significantly, making DC more advantageous for long-distance transmission and renewable energy integration. In particular, since renewable energy sources have high output volatility and significant regional disparities, efficient DC-based transmission is essential.

According to market research firm Verified Market Research (VMR), the global HVDC market is expected to grow at an average annual rate of 8.1%, reaching a size of 2.8 trillion yen (approximately 28 trillion won) by 2033. To secure a foothold in this future market, new projects are rapidly being pursued in China, Europe, and the United States. For example, in the U.S., the "SOO Green HVDC Project" connecting Iowa and Illinois is underway. This transmission network will span about 560 kilometers, target a 525 kV ultra-high voltage DC and 2.1 GW capacity, and is scheduled to begin operation in 2031.

Numerous HVDC projects are also underway in Korea. Projects such as Haenam-Jeju, Jindo-West Jeju, Wando-East Jeju, North Dangjin-Godeok, and Yangju BTB are underway, with a total investment of about 2.2 trillion won. Since 2016, more than 10 projects have been launched with the goal of completion by 2038. Among them, a total of 16.8 trillion won will be invested in the construction of the 500 kV East Coast-East Seoul project and the Southwest Sea (West Coast Energy Expressway) project.

Direct Current Is the Trend... and Will Become a Future Growth Engine

The Korean Pavilion at the world's largest electronics and IT exhibition, CES 2024. Photo by Yonhap News.

The shift to direct current is expanding beyond transmission to include distribution and operation technologies. In Korea, efforts to foster DC-based power grids as a future industry are gaining momentum. Korea Electric Power Corporation (KEPCO) will participate in the world’s largest electronics and IT exhibition, CES 2026, to be held in Las Vegas from January 6 to 9 next year, operating its own exclusive pavilion. KEPCO plans to showcase its DC distribution technology currently under development as the main feature of its booth, along with AI-based power grid operation technologies.

The medium- and high-voltage DC distribution technology being developed by KEPCO minimizes conversion losses between AC and DC and can be supplied to data centers and electric vehicle chargers (EVCs). A KEPCO official explained, "The shift to direct current is an important technological trend not only for large-scale HVDC projects, but also at the distribution level for homes, data centers, and electric vehicle chargers," adding, "Recently, DC distribution technology has been emphasized as a national growth engine."

As the industry is expected to continue growing, interest in power equipment and heavy machinery companies is also increasing. Yoo Seunghoon, Professor of Future Energy Convergence at Seoul National University of Science and Technology, said, "Global power demand is rising sharply, so long-distance transmission networks will be needed in every country, and HVDC will play a key role," adding, "The HVDC industry is bound to grow explosively."