Implementing Rewiring the nation.  How do we future proof our networks -Standardisation and optimisation of supply chains

This article is part 2 of 5 in our current series on “Implementing Rewiring the nation.  How do we future proof our networks?"
Looks at the pressure placed on supply chains globally and considers the benefits of standardisation and co-operation on an international basis.

The articles together seek to provide an overview of current thinking regarding the many challenges associated with the energy transition to a zero-carbon power system.  It has been developed by reviewing a number of CIGRE Electra strategic articles that have been produced over the last twelve months together with a limited review of other associated articles.  From this, five challenging areas have been identified as needing global attention. 

They are: 

• Reliability, security and resilience
• Standardisation and optimisation of supply chains
• Evolving Technologies
• Markets and Regulation
• Environmental and social impacts

The Challenge  

Many countries around the world are rapidly increasing the size and number of projects associated with the energy transition to a zero-carbon power system.  This is placing significant pressure on supply chains and highlighting the lack of manufacturing, design and construction capacity in a number of areas.  Some countries are taking action to build capacity within the country as well establishing long term partnerships with foreign suppliers.  It is clear that there needs to be a global approach to this problem.  This will help ensure that all areas across the world receive attention as well as provide the opportunity to develop supply efficiencies and reduce lead times.  

There is or will be a high demand for materials, renewable technologies, undersea cables (AC and DC), etc as well as skilled human resources to engineer and implement a large volume of projects.  

Offshore wind is a particular challenge with the size of windfarms increasing together with their distance from shore.  This is resulting in a high demand for materials as well as specialist resources for the offshore work.  It is clear that manufacturers of infrastructure such as wind turbines, HVDC cable etc will struggle to meet the demand.  

There will be demand for a number of new HV transmission lines in many parts of the world.  This will be a particular challenge as lead times for these projects can be ten years or more.  

Standardisation is needed to help make suppliers more efficient.  This will need to be driven by organisations such as CIGRE and the IEC and global cooperation will be essential.  At the same time, it is important not to stifle innovation and there must be mechanisms to allow new solutions to be introduced.  

There will be strong competition for limited human and physical resources.  It is estimated that the global demand (outside of China) for blue and white collar workers will more than quadruple by 2030[1].  

Current regulatory approaches are aimed at reducing monopolistic behaviour, driving cost efficiencies and ensuring quality standards are met.  New policies will be needed to allow a greater level of collaboration between suppliers and customers.  The policies should aim to clarify the level and manner of collaboration that is allowed, particularly if this collaboration would  reduce the level of competition.  

Examples of actions underway  

• TenneT in the Netherlands/Germany is aiming for installation of 11.6GW of wind farms by 2030[2].   It is developing a standardised concept for HVDC based Grid Connected Systems.  Achieving the development goal requires parallel execution of several projects (grid and generation based), innovation to increase efficiency and reduce energy costs, and a firm base of technical requirements and design principles.  Standardised substation solutions are expected to accommodate designs from different HVDC vendors, and a prequalification program with cable suppliers is expected to help improve supply.  The more global that these approaches are, the easier it will be for manufacturers to meet the global demand. 

• In 2022, Danish power company Orsted, the global leader in the development, construction and operation of offshore wind, formed a strategic partnership with German steel producer Salzgitter AG[3].  Orsted will supply wind power and hydrogen for Saltzgitter AG to produce low carbon steel which can be used in the wind turbines and associated structures. 

• The US has developed a strategy to secure the supply chain for a robust clean energy transition, particularly looking at local and foreign supply chains as well as expanding local manufacturing and attracting and supporting a skilled work force[4].  

Other possible actions  

• To reduce costs and delivery delays there is a need to find ways to rapidly standardise equipment so that manufacturers do not need to keep redesigning their products to meet changing specifications. 

• Work with governments to ensure policies enhance the ability to rapidly increase production of facilities with minimal environment impact, while retaining quality standards and reasonable levels of competition between suppliers.  

[1] https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/renewable-energy-development-in-a-net-zero-world-overcoming-talent-gaps#/ 

[2] ELECTRA_321-next-generation-offshore-grid-connection-systems-tennets-2-gw-standard

[3] https://orsted.com/en/media/newsroom/news/2022/01/20220125471111#:~:text=Salzgitter%20AG%20and%20Ørsted%20will,chains%20in%20their%20business%20relationships

[4] https://www.energy.gov/sites/default/files/2022-02/America%27s%20Strategy%20to%20Secure%20the%20Supply%20Chain%20for%20a%20Robust%20Clean%20Energy%20Transition%20Fact%20Sheet.pdf