Sumitomo Electric Van Oord consortium named preferred bidder for Shetland 2 HVDC link

Sumitomo Electric Van Oord consortium named preferred bidder for Shetland 2 HVDC link

Sumitomo cable factory

SSEN Transmission has selected Sumitomo Electric Industries and its subsea cable installation partner, Van Oord Offshore Wind UK, (the Sumitomo Electric Van Oord Consortium) as the preferred bidder for the proposed Shetland 2 High Voltage Direct Current (HVDC) link subsea cable.

The need for a second HVDC link from Shetland to the main GB transmission system was confirmed by the independent Electricity System Operator, National Grid ESO, as part of their latest GB-wide strategic network plan, ‘Beyond 2030’.

As well as helping enable the connection of three ScotWind offshore wind farm sites adjacent to Shetland, Shetland 2 will also support decarbonisation and energy security ambitions, alongside helping further secure Shetland’s future electricity needs.

With Shetland 2 the anchor project supporting and enabling Sumitomo Electric Industries investment in its new cable manufacturing facility at Nigg, where the ground has been broken this week, today’s announcement is a hugely significant milestone in delivering 100s of new highly skilled supply chain jobs in the Scottish Highlands.

Attracting inward investment into a UK-based manufacturing facility for such strategically important equipment is a major boost to the UK and Scottish Government’s ability to secure cleaner, more secure energy for future generations. It demonstrates the wider benefits of taking a long-term, joined up approach to delivering strategic investment in grid infrastructure which provides certainty to supply chain partners.

Rob McDonald, managing director of SSEN Transmission, said: “We are delighted to reach Preferred Bidder Status with Sumitomo Electric Industries and its subsea cable delivery partner, Van Oord Offshore Wind UK, for the manufacturer and installation of the Shetland 2 HVDC subsea link.

“Sumitomo’s investment in a new cable manufacturing facility in Nigg will help deliver a homegrown supply chain to help support our energy security and net zero infrastructure requirements. This is great news for the Highland economy and will support hundreds of skilled jobs in the region, helping unleash the economic potential the clean energy transition presents for the north of Scotland.

“We now look forward to concluding contractual negotiations with the Sumitomo Electric Van Oord Consortium in the coming week and months and in parallel, continuing constructive engagement with Ofgem, the UK and Scottish Governments, and wider stakeholders to establish the regulatory framework for Shetland 2 and the wider ‘Beyond 2030’ network investment recommendations.”

Osamu Inoue, president of Sumitomo Electric Group, said: “I am pleased to announce commencement of this innovative High-voltage cable factory in Scotland, and sincerely appreciate SSEN Transmission’s decision to select us as the preferred bidder of Shetland 2 project to enable our significant investment here in the UK. Transmission cables are key essential infrastructures to make the so-called energy transition to renewables into reality. I believe, this factory will make good contributions towards establishment of local supply chains and to realise UK and Scottish Governments’ net zero initiatives.”

Arnoud Kuis, managing director Van Oord Offshore Wind, said: “As a consortium partner of Sumitomo Electric Industries, Van Oord Offshore Wind UK is very pleased to be nominated as the preferred contractor for the Shetland2 project by SSEN Transmission. The Sumitomo/Van Oord partnership exemplifies a synergy of expertise, driving forward a vision of sustainability, reliability, and excellence in building the energy infrastructure of the Shetland 2 project. We are very much looking forward to a successful collaboration with SSEN Transmission and making the Shetland2 project a success.”

Sumitomo Electric Van Oord consortium named preferred bidder for Shetland 2 HVDC link

The Port of Nigg (Image by Gillian Frampton)

Scottish Government energy secretary Màiri McAllan said: “Scotland is fast becoming a renewable energy powerhouse, providing opportunities to grow our economy and create jobs while protecting the environment.

“The Scottish Government is allocating up to £500 million to anchor the offshore wind supply-chain in Scotland, ensuring our workforce, businesses and communities all benefit from the offshore renewables revolution.

“This announcement by SSEN Transmission is a further vote of confidence in that process and follows yesterday’s significant investment by the Scottish National Investment Bank in Ardersier Port. The Shetland 2 contract would underpin Sumitomo’s decision to locate its first European cable factory at Nigg and support hundreds of jobs in the Highlands.”

UK Government energy security and net zero minister, Justin Tomlinson, said: “A second undersea cable connecting Shetland to the Scottish mainland will add 1.8GW of clean wind-generated power to our grid.

“Scotland is a green energy powerhouse, and it is fantastic that Sumitomo Electric Industries will build the cable in the Scottish Highlands, creating hundreds more jobs and building up the local supply chain.

“Since 2010, we have delivered a five-fold increase in renewable power, the second highest amount in Europe, and connecting more renewable energy to the grid will allow the British public to benefit from cheaper clean power.”

Reaching preferred bidder status with Sumitomo Electric Van Oord Consortium (SVOC) follows SSEN Transmission’s successful procurement exercise last year, where SVOC was placed on SSEN Transmission’s Framework of Contractors.

Contractual negotiations with SVOC will continue in advance of entering into Capacity Reservation Agreements and thereafter, Contract Award status for the Shetland 2 scheme later this year. In parallel, SSEN Transmission awaits the GB energy regulator, Ofgem, concluding the development of the regulatory framework for Shetland 2 and other ‘Beyond 2030’ investments, with a decision on this expected shortly after.

With Sumitomo Electric Ltd. breaking ground on its new £350m subsea cable manufacturing plant at Port of Nigg on the Cromarty Firth, the chief executives of the enterprise agencies supporting the company have welcomed this significant milestone for Scotland’s offshore wind supply chain.

Adrian Gillespie, chief executive of Scottish Enterprise, said: “Today marks an important milestone for Sumitomo Electric Ltd’s planned £350m investment in the Scottish renewable energy supply chain.

“The company’s high voltage subsea cable manufacturing site at Port of Nigg is a critical addition to Scotland’s growing offshore wind supply chain, better enabling us to seize the economic opportunities presented by the global energy transition.

“Scottish Enterprise’s energy transition mission aims to accelerate technology innovation, supply chain capability and investment in manufacturing and key infrastructure. Sumitomo is a great example of this mission in action, and we’ll continue to work closely with them, both domestically and through our international arm Scottish Development International, as their plans for Scotland develop.”

Stuart Black, chief executive of Highlands and Islands Enterprise (HIE), said: “Today’s ground-breaking event by Sumitomo Electric Industries Ltd is a great boost for the Highlands and Islands economy and demonstrates strong investor confidence in Scotland.

“With the company also named as preferred bidder for SSEN’s Shetland 2 link, we now see the exciting prospect of high voltage subsea cables manufactured here in the Highlands being deployed in our own coastal waters and helping to strengthen the UK electricity grid.

“At £350m, the Sumitomo project is one of the biggest inward investments we’ve ever attracted to the Highlands and Islands, working in partnership with our colleagues in Scottish Development International and Scottish Enterprise.

“The new Inverness and Cromarty Firth Green Freeport played an important role in the company’s decision which we expect will lead to around 300 Scottish jobs created on site and in the supply chain.”

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