"On-Site Power Surge Amid AI Electricity Crisis"... LS Electric Wins $96 Million Distribution Solution Contract in U.S.

Signs Supply Contract for Microgrid High-Voltage Switchgear
Deliveries Scheduled from December This Year to August Next Year

LS Electric is demonstrating its long-term growth potential in the global energy infrastructure sector, having secured a series of large-scale supply contracts in the North American data center market, where the demand for electricity is surging amid the artificial intelligence (AI) boom.

On May 20, LS Electric announced that it had signed a contract to supply high-voltage switchgear for microgrids—essential infrastructure for self-sufficient power at North American data centers. The contract is worth approximately 64 million dollars (about 96 billion won), with deliveries set to begin in December this year and proceed sequentially through August next year. To support flawless, uninterrupted operations at data centers—where even a one-second power outage is unacceptable—LS Electric plans to provide 38kV-class high-voltage power distribution solutions on schedule.

Workers are inspecting UL-certified distribution equipment at the LS Electric Cheongju plant. LS Electric

Recently, the global microgrid market has been experiencing rapid growth, driven by the spread of generative AI and the adoption of high-performance computing (HPC). Notably, AI data centers consume at least three times, and in some cases more than ten times, as much electricity as traditional facilities. North America accounts for more than 40% of global microgrid demand, making it the most hotly contested market worldwide.

The power supply bottleneck in the United States is also cited as a key factor behind these orders. Even after securing land for a data center in the U.S., it takes at least three to five years just to obtain approval to connect to public transmission and distribution networks. To move quickly in the market, global big tech companies such as Microsoft, Google, and Meta Platforms are turning to “on-site” operations by installing their own power generation facilities on their premises, rather than relying solely on massive public grids.

U.S. government regulations are also accelerating the adoption of self-sufficient microgrids. The Federal Energy Regulatory Commission (FERC) strictly limits data centers from monopolizing nearby public power grids, which could lead to soaring residential electricity bills or grid instability. In fact, recent direct power purchase agreements between big tech companies and nuclear power providers have been blocked. Instead, the government is encouraging microgrid conversion by extending and enhancing tax benefits (ITC/PTC) for building independent power networks that incorporate renewable or environmentally friendly gas generation.

Against this backdrop, microgrids have become the ultimate safeguard for data centers, which can face losses of billions of won from operational downtime. AI servers, energy storage systems (ESS), and renewable energy all operate on direct current (DC). When LS Electric’s high-efficiency DC power distribution system is integrated with a microgrid, it can reduce energy losses from AC conversion by over 10–15%, thereby maximizing energy efficiency.

LS Electric is establishing itself as a major supplier by offering North America-specific solutions that meet the rapidly changing power paradigm. Furthermore, the company is moving beyond its traditional equipment supply model and is detailing a mid- to long-term strategy to upgrade its business structure into a “comprehensive smart power energy portfolio” that integrates renewable energy and gas generation.

A representative from LS Electric stated, “The core of AI data center power supply is a high-efficiency power grid capable of handling enormous electricity consumption and uninterrupted stability. Building on our proven technology through consecutive contracts, we will solidify our position in the rapidly growing local microgrid market.”

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