[Power Industry Transformation]②Electric Vehicles Drive Surge in Power Demand..."Distribution Investment Must Expand"

Editor's NoteThe electric power industry is emerging as a leading sector for Korea, following automobiles and semiconductors. For a long time, electricity played only a supporting role in the industrial sector. However, with the explosive increase in electricity demand driven by artificial intelligence (AI) data centers, electric vehicles, and the expansion of renewable energy, Korea's electric power industry is now in the global spotlight. The four major domestic electric 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 industry's focus is now on how to establish a virtuous cycle. Securing direct current (DC) technology for more efficient power transmission has become a key challenge. We examine the challenges Korean companies face in this era of major transformation for the electric power industry.

While artificial intelligence (AI) data centers have triggered the surge in global electricity demand, there are projections that the electrification of automobiles will further accelerate this increase. As the core of the passenger vehicle market shifts from internal combustion engines to electric vehicles, the pressure to build charging infrastructure is expected to rise rapidly. For this reason, expanding distribution networks and upgrading power infrastructure have become essential tasks.

Electric Vehicle Sales Surpassed 17 Million Last Year

The International Energy Agency (IEA) forecasts that electricity demand required not only for electric vehicles but also for charging systems will increase more than sevenfold over the next decade. The IEA announced that electric vehicle sales exceeded 17 million units in 2024, a rise of more than 25% compared to the previous year. The number of new electric vehicles added this year alone surpassed the total electric vehicle sales in 2020. Electric vehicles now account for over 20% of new passenger car sales, and there are growing assessments that the replacement of internal combustion engine vehicles is accelerating, particularly in the United States, Europe, and China.

Alongside the expansion of electric vehicle adoption, the construction of charging infrastructure is also progressing rapidly. As of 2023, the cumulative global installation capacity of public charging stations increased by more than 40% year-on-year, and approximately 1.3 million new charging stations were installed in 2024 alone. In Europe, the cumulative number of public charging stations surpassed 1 million, with major countries continuing to advance their charging infrastructure.

Electric Vehicle and Charging Infrastructure Power Demand to Increase Sevenfold in 10 Years

The IEA projects that electricity demand for electric vehicles and charging infrastructure, under the Stated Policies Scenario (STEPS), will rise from 280 TWh in 2025 to 974 TWh in 2030, and to 2,110 TWh in 2035. This represents an increase of more than seven times from 2025 to 2035. Under the Announced Pledges Scenario (APS), the growth is even steeper, with demand expected to expand from 285 TWh in 2025 to 1,130 TWh in 2030, and to 2,540 TWh in 2035.

The industry notes that the spread of electric vehicles not only increases demand on the power grid but also requires structural changes. As charging demand becomes concentrated in certain areas, the risk of power quality instability increases, and the expansion of high-speed charging could cause instantaneous power peaks.

"Without Distribution Network Upgrades, Power Peaks Are a Concern"

The electric power industry believes that the need to expand distribution networks is becoming a reality as high-speed charging technology becomes more widespread. This is due to the emergence of ultra-fast charging technology capable of delivering up to 1 MW for electric vehicle charging. In its "2025 EV Charging Market Outlook" report published in August, Samil PwC analyzed, "Charging at over 1 MW per vehicle can create power peaks, and upgrading the power grid is necessary to manage this."

The report points out that while high-speed charging technology can shorten charging times and improve infrastructure efficiency, it also brings new challenges such as increased regional electricity demand, greater grid complexity, and additional investment burdens for new facilities. Accordingly, power authorities in various countries are calling for comprehensive upgrades to distribution infrastructure, including expanding transformer capacity, replacing aging transmission lines, and introducing power quality management systems.

Experts particularly analyze that the expansion of electric vehicle adoption is not simply about increasing the number of vehicles, but is causing changes at the level of the entire power system structure. This is because the deployment of charging infrastructure, the redistribution of power between urban and suburban areas, the expansion of industrial facilities, and changes in demand for maintenance personnel are all occurring simultaneously. There are concerns that if the pace and scale of distribution network investment do not keep up with the growth of the electric vehicle market, problems such as declining power quality or charging delays may arise.

As the electric vehicle market expands, the need to upgrade power grids will inevitably accelerate, leading to predictions that the next decade will be a structural turning point not only for the electric vehicle industry but also for the power industry as a whole.

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