(The author is a Reuters market analyst. The views expressed
are his own.)
By Gerard Wynn
LONDON Jan 15 A prospective shortage of
capacity to manufacture high-voltage power cables threatens
grand European projects to build offshore wind and other
renewable power projects in remote areas and link isolated
countries to the grid.
More government backing is needed to support technology
development, new entrants and manufacturing capacity in
Europe has just three leading manufacturers of high-voltage
direct current (HVDC) cables: Swiss engineering firm ABB
, Italy's Prysmian and France's Nexans
. Siemens also is a major supplier of
converter station equipment.
ABB has reported it controls more than 50 percent of the
global HVDC market.
A small number of suppliers is a concern for technology
development and competition.
The growth of renewable energy increases demand for HVDC
cables to balance the supply of intermittent power across longer
distances and to connect increasingly distant offshore wind
But European projects must compete with demand from emerging
countries such as China and India, which are building out
ambitious supergrid projects.
DC cables are favoured over alternating current (AC) for
long-distance connections for a variety of reasons including
lower transmission losses over long distances; their ability to
link to different AC grids; and the fact that subsea AC cables
are limited to less than 100 km in length.
In Europe, DC cables already link Nordic countries and
Britain to the continent and Mediterranean islands to mainland
A British parliamentary panel this week reported concerns
about the supply chain emerged from the House of Commons
Committee of Public Accounts report.
"We only have a couple of suppliers of this kit," Alistair
Buchanan, head of energy watchdog, Ofgem, was quoted saying.
"There is a degree of both bottleneck and control over
cable, which is a real concern. The main players, Prysmian,
Siemens and ABB, are very dominant in the sector."
The speed of development of German offshore wind farms has
been slowed partly by bottlenecks in the supply of transmission
On technology, improvements are envisioned for the
high-voltage cables that currently transport power from offshore
wind platforms to shore.
Future plans call for multiple HVDC cables to link offshore
in a cluster approach that would exploit economies of scale, but
this would require a technology breakthrough in
A lack of competition may brake technology development,
according to an Ofgem report published last March.
"The incentive for the supply chain to accelerate its
development work in this area may be limited by orders placed
for existing ratings being at or close to production capacity,"
suggested the report, "Offshore Transmission Coordination
Project Conclusions Report".
"The supply chain for key components for offshore
transmission (submarine cables, HVDC converters, HVDC circuit
breakers, and protection and control systems for multi-ended and
inter-system links) is currently highly concentrated," it said.
"Development, production and delivery lead times are between
three and five years with the current level of offshore
In a rather contradictory note, a separate Ofgem study found
"good evidence that the parties to be involved ... would have
the financial strength and delivery capability to deliver
transmission assets to the required timelines, cost and
Britain has the world's largest offshore wind capacity and
has targeted output of up to 18 GW by 2020 (10 times present
capacity) in its "Renewable Energy Roadmap", or nearly a fifth
of current overall net electricity production.
Germany's Siemens has forecast the global HVDC market will
grow by 250 percent to 350 GW capacity in 2020 from around 100
GW in 2010. (See Chart 1)
That growing market is split between DC interconnectors that
join AC networks (both internally and across borders) and DC
connections to offshore wind.
ABB in 2011 published an overview of some 18 HVDC projects
(some including multiple cables) built or under construction
from 1984 to the present. (See Chart 2)
Chart 1: goo.gl/BL4Iy
Chart 2: goo.gl/gRXv7
Of these, six linked hydropower dams to demand centres, 10
were interconnectors and two served offshore wind farms.
China is one of the leading HVDC markets as it develops
long-distance, internal transmission. In 2010, for example, it
commissioned a 2,000 km, 6,400 megawatt link from an inland
hydropower project in Xiangjiaba to Shanghai, built by ABB.
A study by South Africa-based High Voltage Technology SA
last year forecast the HVDC market in China alone would grow by
77 GW or 180 percent from 2011-2018, which would eclipse
Europe's plans for offshore wind.
While China blasts ahead, Europe's failure to push for
development of technology and promote competition in the
manufacture of transmission cable will make offshore wind even
less competitive and may hold back growth of interconnectors
critical to other renewables and to link markets.
($1 = 0.6224 British pounds)
(editing by Jane Baird)