System operator TenneT has signed a multi-year contract (Corporate Framework Agreement) with eight contract partners following a tendering procedure. Over the coming years, these parties will supply and install the alternating current cables for the 110, 150, 220 and 380 kV onshore high-voltage connections in Germany and the Netherlands on TenneT's instructions.
This so-called Corporate Framework Agreement ensures the availability of materials and installation personnel to realise the planned high-voltage projects on time. In the coming years, we will construct some 900 km of high-voltage connections in Germany and TenneT will realise some 4,000 km of high-voltage cables in the Netherlands. The total estimated contract value of this extensive award is €1.5 billion, half of which is earmarked for investments in Germany and the other half for the Netherlands.
Sjouke Bootsma, Director Supply Chain management at TenneT is pleased with the outcome of the tender: 'We need reliable, proactive and innovative partners with high quality and safety standards. We are really looking forward to working closely with the partners in the coming years.'
Speed and simplification of projects
The transition from fossil to renewable energy demands a lot from the power grid. Households are switching to heat pumps, roofs are full of solar panels, wind farms provide sustainably generated energy, and businesses and industry want to switch to electricity en masse. In order to meet this demand, TenneT has to substantially expand the high-voltage grid. Not only does this require a lot of specialised work, such as engineering work, this also demands speed and simplification from these contracting parties in the execution of the projects.
TenneT has signed an agreement with Siemens Energy, Hitachi Energy, GE Grid and Royal Smit, with a total value of EUR 1.9 billion. Of this amount, €1.2 billion is earmarked for upgrading substations in Germany, while the remaining €730 million will be invested in substations in the Netherlands.
Substations can be regarded as the connection points between TenneT's electricity grid and the regional electricity grids of local grid operators, similar to slip roads on motorways.
Transformers are needed to make electricity suitable for lower voltage levels, which is crucial for transporting electricity, including locally generated green power. Compensation coils help maintain a stable voltage for transporting electricity through the high-voltage grid.
Tim Meyerjürgens, TenneT's operations director, stresses that integrating renewable energy through regional power grids into the high-voltage grid requires building and upgrading a significant number of high-performance transformers. He adds that this framework contract promotes sustainability and stimulates the energy transition in both Germany and the Netherlands.
Partnership and reliable deliveries
By building a long-term relationship with eight contract partners, TenneT expects to invest with the parties in smart ways of working and reliable deliveries. Especially in times of scarcity and capacity shortages, working together is crucial. Within the framework contracts for standard cable systems in the Netherlands, suppliers know what their portfolio will look like in the coming years. With that knowledge, market parties can stock up on standard materials. And although we have no obligation to purchase, this way we make it easier and more efficient for the projects. Projects can then order their cables on demand and, compared to the current way of working, this saves about half a year in time. For German projects and projects outside the standard cable system, we work with mini-competitions. There, too, we gain about three months of time on average.
Technical developments
TenneT realises that expanding the electricity grid involves a lot of work. That is one of the reasons for working intensively with these specialised companies. By focusing on long-term partnerships that create a stable collaboration, parties can focus more on innovation and adjust the production process and machinery. Specifically, we will see this reflected in improved materials and design optimisation in the coming years. And, more importantly, we see more and more opportunities to develop longer cables in one piece up to 5,000 metres. Where we currently still work with cables of around 1,500 metres, within two years we will already be laying cables with a length of 3 to 3.5 kilometres. Lengths that can soon also be realised with drilling. This does depend on the voltage, but this is a real step forward in terms of less impact on the environment during laying, but also in terms of interference, speed and so on.
