High-Voltage Direct Current (HVDC)

High-voltage direct current, or HVDC, is a power transmission technology that moves bulk electricity as direct current at very high voltage. Because DC avoids the losses and stability limits of long AC lines, HVDC is the standard choice for long-haul corridors, submarine cables, and links between grids that run out of sync.

What is HVDC?

Almost every grid runs on alternating current, but AC has a weakness: over long distances it leaks energy into reactive losses, and two AC grids can only connect if they are perfectly synchronized. HVDC sidesteps both problems. Converter stations at each end rectify AC into DC, push it down the line at voltages of hundreds of kilovolts, then invert it back. The result is a corridor that carries more power, over a longer distance, with lower losses and a narrower right-of-way than an equivalent AC line. The trade is the converter stations themselves, which are expensive, so HVDC wins only when the distance is long, the cable runs under water, or the grids at each end cannot be synchronized. The International Energy Agency estimates that meeting national energy and climate goals requires adding or refurbishing about 80 million kilometers of grid worldwide by 2040, the equivalent of rebuilding the entire existing global grid, and long-distance HVDC corridors are a core part of that build-out (IEA, Electricity Grids and Secure Energy Transitions).

How is HVDC used in thematic investing?

HVDC sits at the center of the AI power build-out because AI load concentrates where land, fiber, and permits exist, not where power is generated. Korea is a clean example. KEPCO plans HVDC routes connecting the country’s southwestern region to the greater Seoul area as part of a 72.8 trillion won ($53.1 billion) transmission expansion to 2038, which includes a substation feeding 10 gigawatts or more to the planned Yongin semiconductor cluster (Korea Times, May 27, 2025). The investable hardware is cables, converters, and transformers. Taihan Cable & Solution approved a $360 million (497.2 billion won) plant in Dangjin in July 2025 to produce 640 kV-class HVDC submarine cables, with nearly five times the capacity of its first plant and operation targeted for 2027 (Taihan, Jul 16, 2025). Its vice chairman framed the stakes plainly:

“With our turnkey competitiveness in submarine cables, we aim to lead the global market, strengthen national competitiveness, and contribute to energy security.”

— Song Jong-min, Vice Chairman, Taihan Cable & Solution (Taihan press release)

In ETFpedia, HVDC suppliers such as Taihan Cable & Solution and Hyosung Heavy Industries, which builds HVDC transmission systems and STATCOM grid-stability devices, are covered under the Korea AI Power Infrastructure concept.

Related terms & concepts

FAQ

Why is HVDC used instead of AC for long-distance transmission?

Direct current avoids the reactive losses and stability limits that constrain long AC lines, so an HVDC corridor can carry more power over a longer distance with lower losses on a narrower right-of-way. That is why grid planners reach for HVDC when power must travel hundreds of kilometers, cross the sea, or connect two grids that are not synchronized (IEA, Electricity Grids and Secure Energy Transitions).

Why does HVDC matter for AI data centers?

AI load is concentrating in clusters far from generation, and HVDC is how planners move gigawatts to them. Korea's KEPCO plans high-voltage direct current routes linking the country's southwest to the greater Seoul area, where AI data centers and a 10 GW-plus semiconductor cluster in Yongin are being built, as part of a 72.8 trillion won grid build-out to 2038 (Korea Times).

Which Korean companies build HVDC hardware?

Cable makers are the most direct play. Taihan Cable & Solution approved a $360 million plant in Dangjin in July 2025 to make 640 kV-class HVDC submarine cables, targeting operation in 2027 with nearly five times the capacity of its first plant (Taihan). Transformer and converter-equipment makers such as Hyosung Heavy Industries, which supplies HVDC transmission systems and STATCOM devices, sit alongside them in the Korea AI Power Infrastructure concept.

Sources & references

  1. Electricity Grids and Secure Energy Transitions · International Energy Agency, 2023-10-17
  2. KEPCO to invest $53.1 bil. by 2038 to expand power supply infrastructure for advanced industries · The Korea Times, 2025-05-27
  3. Taihan Cable & Solution to invest $360 million in HVDC submarine cable plant 2 in Dangjin · Taihan Cable & Solution, 2025-07-16
  4. High-voltage direct current · Wikipedia