"11 Trillion Won Market Opens for 'Seohaean Power'... Big Deal Expected in the Power Industry"

Honam Energy to the Seoul Metropolitan Area:
Total 620 km Transmission Network
Project Cost 7.9 Trillion Won...
Anticipated Synergistic Effects from Offshore Wind Power Act
LS Cable and LS Marine Hold Competitive Edge...
Beneficiaries in the Power Market

The 'West Coast Subsea Power Highway' project, which supplies electricity generated in Honam to the semiconductor cluster in the Seoul metropolitan area, is set to be actively promoted. This project involves constructing an underwater power transmission network spanning a total of 620 km by 2036, and with the expansion of private sector participation, a market worth up to 11 trillion won is expected to open. In particular, with the recent passage of the Special Act on Offshore Wind Power by the National Assembly simplifying the permitting process, synergistic effects are also anticipated.

According to industry sources on the 24th, the government's recently finalized '11th Basic Plan for Electricity Supply and Demand (Electricity Basic Plan)' has outlined the specific schedule, scope (routes), and implementation methods for the West Coast Subsea Power Highway project.

LS Marine Solution's subsea cable laying vessel GL2030. Provided by LS Marine Solution

This project is a large-scale power infrastructure construction initiative aimed at directly transmitting nuclear and renewable energy generated in the Honam region to the Seoul metropolitan area. While power demand is rapidly increasing in the metropolitan area, power plants are mainly located in Honam and the southeastern region. The existing land-based transmission network cannot handle the increased power demand, so the core of the project is to build an underwater transmission network using High Voltage Direct Current (HVDC) technology, which is suitable for long-distance power transmission. Although there has been an underwater transmission network connecting Jeju to the mainland, this is the first time a large-scale HVDC transmission network will be constructed along the West Coast.

The 11th Electricity Basic Plan confirmed two transmission routes for the West Coast Subsea Power Highway. It will build HVDC lines totaling 620 km in length, covering the Shin Haenam?Taean?West Incheon section (430 km) and the Saemangeum?Taean?Yeongheung section (190 km). The target completion year for the West Coast HVDC is set to 2036, based on projections that nuclear and renewable energy generation capacity will reach 64 GW by that year. HVDC is more suitable for long-distance transmission than the existing alternating current (AC) method and minimizes power loss.

Korea Electric Power Corporation (KEPCO) is coordinating the bidding schedule with a goal to start construction in 2029, but there is growing likelihood that the project scale will significantly exceed the government’s estimated budget of 7.9 trillion won. Industry experts expect the total market size to expand up to 11 trillion won when additional costs are considered. With the passage of the Special Act on Offshore Wind Power simplifying the permitting process for wind power projects, the benefits to the power infrastructure market are expected to increase further.

The companies expected to benefit most directly from this project are LS Cable & System and Taihan Electric Wire. Globally, there are six major subsea cable manufacturers, and LS Cable & System is recognized as the representative company in Korea. LS Cable & System is also regarded as a highly skilled player in the global market. Taihan Electric Wire is actively investing in the subsea cable business as well, having invested 1 trillion won to expand its production line with a target completion year of 2027.

The government's plan to expand the national backbone power grid. The north-south and east-west axes are connected by high-voltage direct current transmission (HVDC). Provided by the Ministry of Trade, Industry and Energy

Although overseas competitors may also enter the market, there are significant concerns about quality and security regarding Chinese companies’ low-price strategies. In May last year, the U.S. Department of State warned about the possibility of Chinese companies eavesdropping on data through subsea cables. For these reasons, domestic companies are likely to have priority participation in government tenders.

LS Cable & System acquired LS Marine Solutions (formerly KT Submarine) in August 2023, establishing an integrated business model covering subsea cable production, installation, and maintenance. They also have experience successfully completing the 'Jeju 3-Connection Subsea Cable (Wando County, Jeollanam-do to Jeju, 90 km section)' project last year. LS Marine Solutions is preparing for the project by introducing a large subsea cable laying vessel (CLV) and expanding the loading capacity of barges (CLB).

In addition, companies supplying converter stations and power equipment necessary for building the HVDC system are also expected to benefit. Large domestic power equipment companies such as HD Hyundai Electric, Hyosung Heavy Industries, and Samsung C&T are highly likely to participate in related projects. Furthermore, companies related to AI data centers or the semiconductor industry are expected to benefit from stable power supply.

The government is considering expanding private sector participation to accelerate the project. In particular, the 'turnkey' method, which integrates design, construction, land acquisition, and permitting into a single process, is a strong candidate. This strategy aims to shorten the project duration and improve efficiency, and large construction companies are also likely to benefit.

A representative from LS Cable & System stated, "As the only subsea cable manufacturer in Korea, we plan to thoroughly prepare and actively respond to government tenders along with LS Marine Solutions once the West Coast HVDC project is fully underway."

This content was produced with the assistance of AI translation services.