A shortage of high-voltage power cables could stall the tidy energy shift
A global surge in demand for high-voltage electricity cables is threatening to stall the clean energy revolution, as the world’s capability to build brand-new wind farms, solar plants, and cross-border power links progressively depends upon a supply chain bottleneck couple of outside the market have actually considered. At the center of this … Check Out Entire Short Article
In a nutshell: As countries set ever more ambitious targets for renewable energy and electrification, the humble high-voltage cable has actually become a linchpin– and a potential chokepoint– in the race to decarbonize the global economy. A Bloomberg interview with Claes Westerlind, CEO of NKT, a leading cable manufacturer based in Denmark, explains why. A worldwide surge in demand for high-voltage power line is threatening to stall the clean energy revolution, as the world’s ability to build new wind farms, solar plants, and cross-border power links significantly depends upon a supply chain bottleneck couple of outside the industry have considered. At the center of this challenge is the complex, capital-intensive process of making the giant cables that transfer electricity across many miles, both over land and under the sea. Despite soaring demand, cable manufacturers remain cautious about expanding capacity, raising questions about whether the pace of electrification can keep up with climate ambitions, geopolitical tensions, and the practical realities of industrial investment. High-voltage cables are the arteries of modern power grids, carrying electrons from remote wind farms or hydroelectric dams to the cities and industries that need them. Unlike the thin wires that run through a home’s walls, these cables are engineering marvels– often as thick as a person’s torso, armored to withstand the crushing pressure of the ocean floor, and designed to last for decades under extreme electrical and environmental stress. “If you look at the very high voltage direct current cable, able to carry up to two gigawatts through two sets of cables– that means that the equivalent of one nuclear power reactor is flowing through one cable,” Westerlind told Bloomberg. The process of making these cables is as specialized as it is demanding. At the core is a conductor, typically made from copper or aluminum, twisted together like a rope for flexibility and strength. Around this, manufacturers apply multiple layers of insulation in towering vertical factories to ensure the cable remains perfectly round and can safely contain the immense voltages involved. Any impurity in the insulation, even something as small as an eyelash, can cause catastrophic failure, potentially knocking out power to entire cities. As the world rushes to harness new sources of renewable energy, the demand for high-voltage direct current (HVDC) cables has surged. HVDC technology, originally pioneered by NKT in the 1950s, has become the backbone of long-distance power transmission, especially for offshore wind farms and international links. In recent years, approximately 80 to 90 percent of new massive cable projects have utilized HVDC, reflecting its efficiency in transmitting electricity over long distances with minimal losses. This increase in demand has led to a critical bottleneck. Factories that produce these cables are booked out for years, Westerlind reports, and every project requires custom engineering to match the power requirements, location, and environmental conditions of its route. According to the International Energy Agency, meeting global clean energy goals will necessitate constructing the equivalent of 80 million kilometers (around 49.7 million miles) of new grid infrastructure by 2040– essentially doubling what has been built over the past century, but in just 15 years. Despite the clear need, cable manufacturers have been slow to add capacity for reasons that are as much economic and political as technical. Building a new cable factory can cost upwards of a billion euros, and manufacturers are wary of making such investments without long-term commitments from utilities or governments. “For a company like us to make investments in the realm of EUR1 or 2 billion, it’s a massive commitment … but it’s also a massive amount of demand that is needed for this investment to really make financial sense over the next not five years, not ten years, but over the next 20 to 30 years,” Westerlind said. The industry still bears scars from a decade ago, when anticipated demand failed to materialize and expensive new facilities sat underused. Some governments and transmission system operators are attempting to break the logjam by making “anticipatory investments”– committing to purchase cable capacity even before specific projects are finalized. This approach, supported by regulators, gives manufacturers the confidence to expand, but it remains the exception rather than the rule. Meanwhile, the industry’s structure itself creates barriers to rapid expansion, according to Westerlind. The technology, infrastructure, and expertise needed to manufacture high-voltage cables are concentrated in a handful of companies, creating what experts refer to as a “deep moat” that is difficult for new entrants to cross. Geopolitical tensions add another layer of complexity. China has built more HVDC lines than any other country, though Western manufacturers, such as NKT, maintain a technical edge in the most advanced cable systems. Nevertheless, there is growing concern in Europe and the United States about becoming reliant on foreign suppliers for such critical infrastructure, particularly in light of recent global conflicts and trade disputes. “Strategic autonomy is very important when it comes to the core components and the critical components of your society, where the grid backbone is one,” Westerlind noted. The stakes are high. Without a rapid and coordinated push to expand cable production, the world’s clean energy transition could be slowed not by a lack of wind or sun but by a shortage of the cables needed to connect them to the grid. As Westerlind put it, “We all know it needs to be done … These are huge investments. They are very expensive investments. Also the governments have to have a part in enabling these anticipatory investments, and enabling the TSOs to actually move forward with them.”
Despite soaring demand, cable manufacturers remain cautious about expanding capacity, raising questions about whether the pace of electrification can keep up with climate aspirations, geopolitical tensions, and the practical realities of industrial investment. “If you look at the extremely high voltage direct current cable, able to carry roughly 2 gigawatts through two sets of cables– that means that the equivalent of one nuclear power reactor is flowing through one cable,” Westerlind told Bloomberg. Building a new cable factory can cost upwards of a billion euros, and manufacturers are wary of making such investments without long-term commitments from utilities or governments. Some governments and transmission system operators are attempting to break the logjam by making “anticipatory investments”– committing to buy cable capacity even before specific projects are completed. Without a rapid and coordinated push to expand cable production, the world’s clean energy transition could be slowed not by a lack of wind or sun but by a lack of the cables needed to connect them to the grid.
