The gas-fired combined-cycle power generation project (hereinafter "gas-fired power"), which is a leading candidate for Korea's first U.S. investment project, is expected to be sufficiently profitable when considering the surge in U.S. artificial intelligence (AI) investments and the resulting sharp increase in electricity demand. In particular, with gas-fired power gaining attention as the primary power source for recent AI data centers, it is projected that even with large-scale capital injection, repayment of principal and achievement of profits will be possible after a certain period.
According to government sources and the energy industry on the 28th, a plan to invest $19.8 billion (approximately 30 trillion won) in a gas-fired power construction project in the southeastern region of Texas, U.S., is being seriously considered as Korea's first U.S. investment project.
Until now, large-scale nuclear power plants and small modular reactors (SMRs) have been among the leading candidates for U.S. investment projects. However, when comprehensively considering factors such as electricity demand in the U.S., business viability, and timeliness, gas-fired power is most likely to be launched first.
Gas-fired power generation is a method of producing electricity by simultaneously operating gas turbines and steam turbines through the combustion of liquefied natural gas (LNG). Although it uses fossil fuels, it emits fewer greenhouse gases than coal, has a shorter construction period than nuclear power plants, and offers higher output stability than renewable energy sources. These characteristics have drawn attention to gas-fired power as one of the key components of the energy mix in the AI era.
According to S&P Global, electricity supplied to U.S. data centers last year increased by 22% year-on-year to reach 61.8 gigawatts (GW), and is projected to exceed double that amount at 134.4 GW by 2030. Due to the sharp rise in electricity demand, additional power plant construction is urgently needed. Nuclear power plants take more than 10 years from planning to operation, while renewable energy sources face challenges in providing stable power supply due to their intermittency. This is why gas-fired power generation has emerged as an alternative capable of immediately supplying power to data centers.
Currently, natural gas is the primary source supplying the most electricity to U.S. data centers, accounting for approximately 40% of total supply. Renewable energy and nuclear power follow, each contributing 24% and 20%, respectively. The International Energy Agency (IEA) anticipates a sharp increase in electricity demand over the next five years and projects that an additional annual gas-fired power supply exceeding 130 terawatt-hours (TWh) will be added by 2030.
Consequently, the gas turbine industry is facing bottlenecks comparable to those in the semiconductor sector. Order backlogs for the world's top three gas turbine manufacturers—GE Vernova, Siemens Energy, and Mitsubishi Power—are fully booked through 2028 to 2030. To build additional gas-fired power plants immediately, companies must turn to South Korea, which holds gas turbine technology such as Doosan Enerbility.
Japan's selection of gas-fired power as its first U.S. investment project follows the same logic. In February, Japan announced a 9.2 GW gas-fired power project in Ohio and crude oil export facilities in Texas as its first U.S. investment initiative. Na Min-sik, a researcher at SK Securities, stated, "In a situation where electricity rates per household in the eastern U.S. are expected to rise by more than $17, the Trump administration's prioritization of gas-fired power for electricity rate stability has resulted in Japan's investment." He further predicted, "South Korea is highly likely to follow a similar path."
With stable supply channels secured through data centers, it is analyzed that the commercial rationale—a key element of U.S. investment projects—will be sufficiently met. Jeon Yu-jin, a researcher at iM Securities, noted, "Data centers are actively expanding the adoption of BTM (Behind The Meter) power generation to shorten electricity procurement periods and improve power quality by drawing power directly without going through the grid." He added, "Gas-fired power is the most suitable as a core power source due to its rapid construction period and high output control capabilities."
While business viability appears sufficient, concerns remain that the initial injection of large-scale capital could exacerbate volatility in foreign exchange markets and liquidity burdens. Given that fund contributions are capped at $20 billion annually under the Korea-U.S. agreement, specific timing and methods for investment payments are expected to be determined through coordination.
An official familiar with the matter stated, "South Korea is not required to raise funds exceeding $20 billion in any given year." He added, "According to the strategic investment memorandum of understanding, there is also a possibility that no additional investment projects will be announced this year."
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