Revealed: The UK's Latest Energy Supply Chain Contracts
Supply chain sustainability is important to the UK energy industry to comply with evolving ESG regulations and meet net-zero targets.
Not only does it attract green investment and lower costs through efficient procurement, but also improves resilience against global supply chain disruptions.
Bidding to help craft a more secure, resilient and decarbonised energy system, the National Grid has awarded several contracts under its £59bn (US$76.4bn) High Voltage Direct Current (HVDC) supply chain framework.
The framework was launched in 2023 and aims to secure vital equipment for both current and future energy infrastructure projects and craft long-term supplier relationships.
On the Framework Agreement, six HDVC cable suppliers have been granted positions: LS Cable & System, Hellenic & Jan De Nul Consortium, NKT Cables, Sumitomo Electric, Prysmian Group and Taihan Cable & Solution. These positions total around £21.3bn.
On the HVDC Converter Framework, four suppliers have been given places: Hitachi Energy, GE Vernova, Siemens Energy and Mitsubishi Electric. These contracts total £24.6bn.
The contracts are set for five years – with the possibility of adding three years – and will support the UK’s energy transition to create jobs and improve energy security.
Carl Trowell, President of Strategic Infrastructure at National Grid, explains: “This is another exciting milestone in delivering the greatest overhaul of the grid in a generation – The Great Grid Upgrade.
“We are committed to building the infrastructure that will enable our country's current and future energy needs, at pace. This framework allows us to harness National Grid’s scale to access global supply chains, drive efficiencies, foster innovative technologies and contribute to the UK’s economic prosperity.”
The Great Grid Upgrade
The Great Grid Upgrade is the National Grid’s more transformative project that aims to alter the UK’s electricity transmission system and improve the grid’s capacity to transmit renewable and clean energy from generation sites to homes and businesses.
It comprises 17 infrastructure projects across England and Wales that will improve existing networks and construct new infrastructure, such as new transmission lines and pylons, substations and underground and underwater cables.
The project will aim to:
- Enhance energy security by reducing the UK’s reliance on imported fuels and improving infrastructure to support clean energy
- Economic growth and job creation to help contribute to economic growth and the development of a skilled workforce in the renewable energy
- Support renewable energy integration
The Great Grid Upgrade will support the UK’s transition to reaching net-zero carbon emissions by 2050.
National Grid’s HVDC Supply Chain framework is a vital part of the Great Grid Upgrade as both projects help improve the reliability and efficiency of the UK’s electricity transmission system as the country continues to make progress towards a low-carbon future.
The importance of sustainability
Sustainability remains at the forefront of National Grid’s HVDC supply chain framework as it directly enhances the UK’s energy transition, net-zero goals and grid decarbonisation.
The HVDC will support projects such as Sealink, Eastern Green Link 4 and LionLink. These projects will help to integrate more renewable energy into the grid, therefore reducing reliance on fossil fuels.
- Supply chain resilience
- Catalyse the energy transition
- Job creation in green industries
- Decarbonise the UK grid
- Make energy infrastructure more sustainable
- Green and resilient supply chains
Suppliers chosen for the framework also have strong commitments to sustainability, such as a high use of recycled materials, green logistics to minimise transportation emissions and low-carbon manufacturing of HDVC components and cables.
National Grid will also enhance supply chain resilience by partnering with several global suppliers. This will reduce the risks of bottlenecks and shortages. Several suppliers are also embracing circular economy models by improving their recycling processes and material efficiency.
Neil Beardsmore, Executive Global Commercial leader for HVDC at GE Vernova, one of the suppliers chosen, states: “Electrification is the cornerstone of a net-zero future and, at GE Vernova, we are committed to accelerating this transition by delivering integrated solutions that enable large-scale electrification.
“As global energy demand rises and grids face unprecedented challenges, we are focused on helping our customers build a more resilient, secure, and decarbonised energy ecosystem."
Strengthening supply chains
National Grid’s HVDC supply chain framework secures long-term contracts with global suppliers to maintain the availability of HVDC cables and converter systems, which are needed for energy projects and will secure a reliable supply chain for the UK’s energy industry.
It will also mitigate risks linked to raw material shortages, geopolitical tensions and global supply chain disruptions by pre-selecting multiple suppliers across several regions (like the US, Europe and Asia).
National Grid can benefit from standardised processes, economies of scale and faster project execution by bulk procuring critical equipment through its structured framework.
The framework also covers current and future projects, securing long-term stability in the energy supply chain. This will improve supply chain agility and reduce procurement lead times, as future grid projects will have pre-approved suppliers.
Ben Wilson, President of National Grid Ventures, explains how strategic supply chain initiative will enhance supply chain agility and minimise procurement lead times: “National Grid is already the largest operator of subsea power cables in the world, the majority of which we delivered in the last six years.
“World record-breaking sites like Viking Link and pioneering projects like LionLink need an ambitious approach for every aspect of their delivery, including with our suppliers.
“Today’s announcement is an important step which strengthens our supply chain. It ensures we can develop and deliver innovative international projects in a timely manner and boosts energy security with confidence.”
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