"15 Years Invested in DC Research"... LS Electric Takes on the 'First Mover' Challenge [Power Industry Transformation] ⑤

Visiting the LS Electric DC Factory
Interview with Bae Chaeyun, Head of Research, and Moon Sangcheon, Factory Manager
"Annual Investment of 14 Billion Won in DC R&D"
Regulations and Facilities Pose Challenges... "DC Industry Still in Its Infancy"

Editor's NoteThe power industry is emerging as a key sector in Korea, following automobiles and semiconductors. For a long time, electricity played only a supporting role in the industrial sector. However, with the rapid increase in power demand driven by the expansion of artificial intelligence (AI) data centers, electric vehicles, and renewable energy, the power industry has become a leading force in the Korean industrial landscape, even attracting attention overseas. The four major domestic power equipment companies, including LS Electric, have secured orders worth 33 trillion won. The industry is now firmly established as a growth engine contributing to exports and job creation. The main focus within the power sector is on how to establish a virtuous cycle. Securing direct current (DC) technology for more efficient power transmission has become a core challenge. We have examined the challenges faced by Korean companies in this era of major transformation in the power industry.

It is clear that direct current (DC) is becoming mainstream in the power industry. However, LS Electric is currently the only company in the world to have established a factory-wide DC-exclusive power distribution system. Given that the DC market is still in its infancy, such an investment would not have been possible without strong confidence in the industry's growth. How was LS Electric able to be so certain? We spoke with Bae Chaeyun, Head of the Advanced Technology Research Group at LS Electric, who has led DC-related technology research, and Moon Sangcheon, Factory Manager of the Cheonan plant, which is building the DC factory.

Bae Chaeyoon, Head of Advanced Technology Research Group at LS Electric (left), and Moon Sangcheon, Factory Manager of LS Electric Cheonan Plant, are being interviewed on the 20th at LS Electric Cheonan DC Factory in Chungnam. Photo by Kang Jinhyung

Bae explained, "DC has gained prominence due to its high efficiency," adding, "Compared to the traditional method, which requires an extra step of alternating current (AC) conversion, DC reduces the number of conversion stages, thereby preventing power loss." In the traditional AC distribution system, power must be converted twice (DC→AC→DC), resulting in losses. In contrast, applying DC distribution reduces the conversion process by one step, minimizing power loss. In particular, data centers, which require large amounts of electricity, need more wiring, but using DC distribution can reduce the amount of wiring required.

The reason DC's efficiency has only recently been recognized is due to technological advances. Bae said, "In the past, AC was always advantageous, but now, with the advancement of semiconductor technology, voltage control has become easier," adding, "The application range of DC technology has expanded from high-voltage DC (HVDC) to low-voltage DC (LVDC)."

The main reason power companies have not attempted to build DC factories is that most distribution equipment is centered around AC. To convert to DC, all equipment must be removed and replaced, and it takes at least three years for the return on investment (ROI) to materialize, making it a difficult decision for companies.

However, LS Electric determined that the power efficiency gained by converting all equipment to DC would outweigh the costs. According to the Open Data Center Alliance (ODCA) "DC Factory Effect Verification," converting all production equipment to DC improves power efficiency by nearly 14%. Although the investment cost reaches 2.2 billion won, it can save 2,111 MWh of electricity per year. The return on investment period is also reduced from 5-6 years to 3 years when the entire facility is converted, compared to only replacing lighting with DC. In addition, the Cheonan plant was at the stage of building a new production line, allowing DC-based equipment to be installed from the outset.

'15 Years of Investment in DC'... LS's Big Bet

Bae Chaeyun, Head of Advanced Technology Research Group at LS Electric, is being interviewed on the 20th at LS Electric Cheonan DC Factory in Chungnam. Photo by Kang Jinhyung

LS Electric has been investing in DC technology development since 2010. The Power Research and Development Headquarters, consisting of three research groups including the Advanced Technology Research Group, has been developing DC-related technologies. The total investment amounts to 210 billion won, with an average annual input of 14 billion won. Bae stated, "We have been researching DC-exclusive equipment for about seven years, and if you count basic research, we have been making continuous efforts for over a decade," adding, "While we are behind Europe and the United States in AC, we aim to become a world-leading company in DC, and we are investing heavily relative to market size."

In particular, LS Electric has worked to localize equipment while building the DC factory. Bae explained, "More than 70% of the equipment installed here is domestically produced," adding, "Some of it we have developed in-house."

However, the DC industry is still in its early stages both domestically and internationally. They predict that it will take considerable time for the AC-based power industry to transition to DC. Bae said, "As a 'first mover,' we inevitably have to take on risk," adding, "We are very optimistic about the industry's prospects, but we will have to watch how it actually develops."

In particular, they believe that preparing related equipment is urgent for applying DC devices to data centers. Unlike factories, where 1-5 MW of power is sufficient, AI data centers require at least 60-80 MW, and sometimes up to 120-200 MW, so developing higher-capacity core DC devices must come first. Pilot DC data center projects are underway both in Korea and abroad, with companies possessing next-generation equipment such as solid-state transformers (SSTs) and circuit breakers actively participating in the competition.

The construction of data centers involves not only the power grid, but also Korea Electric Power Corporation (KEPCO) interconnections, water supply, and local government administration, making the structure highly complex. They pointed out that this complexity is accelerating discussions about DC adoption. Moon also said, "KEPCO cannot endlessly increase the number of power plants, and nuclear and renewable energy issues continue to arise," adding, "Ultimately, the key is how to produce, distribute, and use energy efficiently. From that perspective, DC will inevitably become more widespread."

He also emphasized that the industry as a whole needs to gradually build the necessary equipment and facilities. He said, "At the generation stage, it is necessary to expand DC-based sources, and at the distribution and equipment stage, technologies are required to use limited power with minimal loss," adding, "Of course, it is difficult to switch the entire process to DC at once, but we need to gradually expand DC-based systems by dividing the process into source (generation) and load (equipment/facility) stages."

The Industry Moves Toward DC, Institutional Support Needed

Munsang Cheon, Factory Manager of LS Electric Cheonan Plant, is giving an interview at the LS Electric Cheonan DC Factory in Chungnam on the 20th. Photo by Jinhyung Kang

Moon stated that as more customers seek to build their own DC-based power grids, demand is increasing for DC-exclusive drive solutions instead of using existing AC-driven equipment. He said, "There are actual requests to supply DC-exclusive drives so they can be connected directly to DC power grids," adding, "To do this in earnest, not only production equipment but also various devices such as cooling, air conditioning, lighting, and power control systems must be converted from AC-based to DC-exclusive equipment."

The lack of regulations is the biggest obstacle to industry expansion. In Korea, there are almost no safety standards, measurement standards, or installation regulations for DC. Bae explained, "Without standards, you cannot even get approval," adding, "We are currently in the initial stage of building facilities, having each one individually checked by the safety authority." Korea Electric Power Corporation is also pursuing ways to expand high-efficiency certification and subsidy benefits, which previously applied only to AC equipment, to DC products as well.

Both believe that the "age of direct current" will arrive soon. Moon emphasized, "From now on, the power industry will have to be approached from an efficiency perspective," adding, "The amount of electricity used in data centers and renewable energy facilities will increase dramatically, and there will come a time when efficient power management will be indispensable."