[Great Transformation of the Power Industry]④12 Trillion Won 'West Coast Energy Expressway Project' Set to Launch... Busy K-Power Sector

Connected by 1,070 km of Submarine HVDC
First Project: 2.8 Trillion Won Saemangeum-Seohwaseong Line
Active Submarine and Underground HVDC Projects Overseas
Opportunity to Secure Export Competitiveness through Technology Development and Loca

Editor's Note
The power industry is emerging as a leading sector in 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 increase in power demand driven by artificial intelligence (AI) data centers, electric vehicles, and the expansion of renewable energy, the power industry has now become a key player in the Korean industrial landscape, sought after even overseas. The four major domestic power equipment companies, including LS Electric, have secured orders worth 33 trillion won. The industry has established itself as a growth engine contributing to exports and job creation. The focus within the power sector is now on how to secure a virtuous cycle structure. Securing direct current (DC) technology for more efficient transmission has become a core challenge. We examine the challenges Korean companies face in this major transformation of the power industry.

In July, LS Electric signed a memorandum of understanding (MOU) with GE Vernova, a global energy solutions company, to localize converter equipment for high-voltage direct current (HVDC) transmission. The two companies plan to use LS Electric's HVDC production infrastructure to localize converter valves, a core piece of GW-class voltage-source HVDC equipment. LS Electric has already completed the localization of converter transformers (CTR) for voltage-source HVDC following its earlier success with current-source HVDC.

LS Electric is accelerating the localization of voltage-source HVDC equipment, targeting the West Coast Energy Expressway project, which the new administration is prioritizing. There is growing consensus that domestic power equipment companies are now entering a full-fledged race to preempt the domestic energy expressway projects, which are expected to reach the trillion-won scale.

According to the Ministry of Climate, Energy and Environment and the power industry on November 27, the government plans to invest about 11.5 trillion won in the West Coast Energy Expressway project, which will transmit renewable energy such as solar and wind power produced in the Honam region to the Seoul metropolitan area, where industrial complexes are concentrated, by the 2030s. Of this, the budget related to converter equipment is estimated to reach 4.8 trillion won.

The government also plans to complete a nationwide U-shaped energy transmission network connecting the southern and eastern coasts by the 2040s. This will be the largest transmission network project since the founding of the country. The total project cost is expected to far exceed 20 trillion won.

Honam Renewable Energy to the Seoul Metropolitan Area via Submarine HVDC

The energy expressway refers to a transmission infrastructure that directly supplies renewable energy produced in Yeongnam and Honam to the Seoul metropolitan area via submarine cables. This was originally presented as the "West Coast HVDC Project" in the 10th and 11th long-term transmission and substation facility plans (up to 2036 and 2038, respectively). The new administration rebranded it as the "West Coast Energy Expressway" and moved up the completion target.

Power plants such as thermal and nuclear power facilities in Korea are concentrated in Yeongnam and Honam. Until now, electricity produced in these regions was sent to demand centers like the Seoul metropolitan area using high-voltage land transmission networks. However, as opposition from local residents to the construction of transmission towers has grown, the construction of inland transmission networks has continued to be delayed. Although the Special Act on Expanding the National Power Grid passed the National Assembly and took effect in September, there are still many unresolved issues. Construction is likely to proceed slowly due to compensation issues for local residents.

The problem is that the generation capacity of renewables such as solar and wind power in the Yeongnam and Honam regions is also increasing rapidly. The government plans to increase renewable energy from the current 40GW to 100GW by 2030, with most of this concentrated in Yeongnam and Honam. In the Honam region alone, the amount of renewable energy generation approved through 2033 is expected to reach 48.5GW.

To rapidly expand renewable energy as planned by the government, seamless integration with the power grid is essential. Currently, grid saturation is causing severe curtailment of renewable energy output. It is common for new solar power plants to wait a year or more for grid connection.

Using submarine HVDC can help solve social acceptance issues, as there are relatively fewer stakeholders along the construction route compared to land-based lines. HVDC is also cheaper than alternating current (AC) for long-distance transmission and requires less installation space. For renewables such as solar and wind power, which are based on power conversion devices (inverters), DC transmission is more efficient. Submarine HVDC power grids are also easier to connect with large-scale offshore wind farms.

Power equipment companies are increasingly optimistic about the energy expressway project. The West Coast Energy Expressway will span a total length of 1,070 kilometers with four transmission lines and a transmission capacity of 8GW. The project is expected to proceed in three phases: phase 1 for technology development and localization, phase 2 for the construction of converter stations and transmission lines, and phase 3 for submarine cable installation. The power equipment business will be concentrated in phases 1 and 2, with high demand expected for HVDC converters, gas-insulated switchgear (GIS), and transformers.

The first of the four transmission lines to break ground will be the 220-kilometer HVDC project connecting Saemangeum and Seohwaseong. Initially scheduled for completion by 2031, the target has been moved up to 2030, within the current administration's term. This project alone will require 1 trillion won for converter equipment, 1.2 trillion won for transmission, and 600 billion won for substations, totaling 2.8 trillion won. Subsequent projects will connect Sinhaenam to Dangjin Thermal Power Plant, Sinhaenam to Seo-Incheon Combined Cycle Power Plant, and Saemangeum to Yeongheung Thermal Power Plant.

Globally, projects to build energy expressways using submarine or underground cables are already active. The Neuconnect project, which broke ground in 2023, is a 725-kilometer submarine HVDC project linking the United Kingdom and Germany, with plans to transmit about 1.4GW of electricity bidirectionally between the two countries. This project will cost about 2.8 billion euros (about 4 trillion won) and is scheduled for completion in 2028.

Germany's SuedLink project is a 700-kilometer underground cable project connecting northern and southern Germany, with about 10 billion euros (about 16 trillion won) to be invested by 2028.

In 2022, Denmark, Germany, the Netherlands, and Belgium agreed to jointly install 6GW of offshore wind power in the North Sea by 2030 and to interconnect their regional power grids in the "North Sea Offshore Wind Hub Project." The plan is to connect each country's wind farms with HVDC networks. In Korea, an LS Cable consortium has won four HVDC projects to connect North Sea wind power to mainland Germany, signing contracts worth about 1.5 trillion won.

"Expansion of Domestic Technology Demonstration and Multi-Vendor Strategy Needed"

The energy expressway project is expected to serve as an opportunity to secure a domestic production base, enhance export competitiveness, and strengthen HVDC technology. The government plans to complete the development of key equipment, including GW-class valves and controllers and 500kV-class converter transformers, by 2027.

Industry experts agree that expanding domestic technology demonstration and adopting a multi-vendor strategy are essential for the success of the energy expressway.

At the "Current Issues and Future Tasks for Building the Energy Expressway" policy forum hosted by the Korea Electrical Manufacturers Association at the Kim Daejung Convention Center in Gwangju, Jeollanam-do earlier this month, Paek Seungtaek, Head of the Energy DX Division at LS Electric, suggested, "By applying regulatory sandboxes or simplifying the approval process for dedicated demonstration lines, we should be able to prove the stability and improve the performance of domestically developed HVDC converters and controllers."

He added, "We should also introduce multi-vendor-based HVDC design, as seen in Europe."

◆Glossary

· Valve / Controller = A valve converts high-voltage alternating current (AC) power into direct current (DC) or vice versa, supplying it to the power grid. Valves are constructed by stacking power semiconductor devices such as thyristors and IGBTs in series. The controller directs the operation of the valve and acts as the brain, monitoring and managing the operation of the entire system.

· HVDC Converter Transformer = Equipment that provides the appropriate voltage to ensure proper operation of the AC-DC converter valve. It isolates the AC power grid from the valve and transmits power between them. It also reduces unwanted frequencies called harmonics generated during the AC-DC conversion process.