NKT clinches ‘key components’ deal for two power cable projects

Denmark-headquartered cable supplier NKT has entered into agreements with SSEN Transmission, ensuring production and offshore installation capacity for power cable systems for two high-voltage direct current (HVDC) transmission links offshore Scotland.

Ofgem put its stamp of approval at the end of 2022 on the strategic electricity transmission reinforcements required to deliver the UK government’s 50 GW offshore wind by 2030 target. This decision confirmed that all SSEN Transmission’s projects, identified by the Electricity System Operator (ESO) as required to meet 2030 offshore wind targets, will be taken forward.

In line with this, these offshore HVDC transmission links are part of the Pathway to 2030 Holistic Network Design (HND), which is a major upgrade of the electricity transmission network across Great Britain that is required to help meet the UK and Scottish governments’ 2030 renewable energy and climate change targets. HND sets out a single, integrated design that supports the large-scale delivery of electricity generated from offshore wind.

After being selected as the preferred bidder for the Western Isles and Spittal-Peterhead offshore 525 kV XLPE HVDC transmission links with a transmission link capacity of 1.8 GW and 2 GW, respectively, NKT has now reserved production and offshore installation capacity for these projects, which will strengthen the interconnection of the Scottish transmission grid.

Claes Westerlind, NKT President and CEO, commented: “The reservation of production and offshore installation capacity is an important milestone in the great collaboration with SSEN Transmission and our continuous support of the green transition in Scotland.

“The projects are an excellent fit with our decision to expand our high-voltage production capacity in Karlskrona and add a new market-leading cable-laying vessel to our fleet. We are excited to leverage our extensive expertise in large turnkey HVDC projects to strengthen the interconnection of the Scottish power grid.”

NKT’s scope of work for the two turnkey projects will comprise the design, production, and installation of both onshore and offshore cable systems. The combined value of the two projects is not yet firmly fixed, however, the Dutch player estimates it to be over €1 billion ($1.08 billion) upon clarification of the final scope. Both projects are scheduled for completion in 2030.

Sandy Mactaggart, SSEN Transmission Director of Offshore Delivery, remarked: “We are delighted to announce we have successfully secured for manufacturing and installation capacity with our supply chain partners for the Western Isles and Spittal-Peterhead HVDC converter systems and cables which is another hugely important step to support the timely delivery of these projects.

“Recognising the unprecedented global demand for HVDC technology, we have acted with pace to secure these key components at the earliest opportunity and we now look forward to concluding contractual arrangements and building on our long-established and strong working relationship with NKT.”

According to NKT, project-specific contracts for these two projects are conditional upon the conclusion of the commercial negotiations and final investment decision. The final construction contracts are expected to be called off before the end of 2025.

NKT disclosed its plans in May 2023 to boost its high-voltage power cable business with a €1 billion investment in a new factory in Sweden and a power cable vessel. The Dutch firm set a record for its high-voltage order backlog in 2Q 2023, standing at €7.6 billion, an increase from €7 billion that was reported at the end of 1Q 2023.