Hitachi Energy Part of $14 Billion European Infrastructure Deal
Hitachi Energy has been chosen by TenneT, a transmission system provider for Germany and the Netherlands, to supply several onshore and offshore high-voltage direct current (HVDC) converter stations and associated infrastructure for European power grids.
Hitachi officials on March 30 said the agreement, which includes Petrofac—an international service provider to the energy industry—is worth about 13 billion euros ($14.2 billion). Hitachi said it is the largest framework deal in the company’s history. The contract includes technology and engineering expertise from Hitachi to support TenneT’s offshore wind capacity expansion in the Dutch and German sectors of the North Sea.
TenneT said the deal is part of that company’s “2GW Program” for offshore wind, which will feature HVDC technology from Hitachi.
The announcement comes the same day that U.S. utility Entergy and global power giant RWE announced a partnership to jointly assess the best ways to develop an offshore wind market in the Gulf of Mexico.
Six Offshore Wind Projects
The TenneT agreement initially includes a commitment to deploy six renewable energy integration systems. Five of those will connect offshore wind farms to the Dutch power grid; the sixth will connect to the German grid. Each connection system has a 2-GW capacity, with a 525-kV voltage level, which the companies said is the first-of-its-kind for offshore wind.
“This innovative business model will set the course for the integration of a huge amount of offshore wind power and gives visibility of the future. In fact, we are already hiring to expand our global delivery capacity and effectively fulfill these and other orders,” said Niklas Persson, managing director at Hitachi Energy’s Grid Integration business. “We’re proud to be part of this journey and, along with our partner Petrofac, we are setting the benchmark for deploying offshore HVDC technology at scale and with speed.”
“TenneT has the technical know-how, scale, and geographical position to connect wind energy from the North Sea. This is one of the most important infrastructure projects of the century; the green transformation of the energy system is key for the decarbonization of industry,” said Tim Meyerjürgens, COO of TenneT. “Together with our market partners, we are very proud to have achieved another important milestone. Together we secure decisive acceleration of the offshore grid development and set the course for the future European energy landscape.”
Hitachi officials in a news release on Thursday wrote that the deal provides an “opportunity to innovate how state-of-the-art technology can be deployed effectively and how new business models enable the scale needed for the green energy transition. The framework agreement approach allows Hitachi Energy and Petrofac to plan in advance and increase their workforce and manufacturing capacity timely as well as train people to have the skills needed in the industry while also capturing synergies between successive projects to meet the in-service dates.”
HVDC Light Converter Stations
Hitachi Energy said it will supply its HVDC Light converter stations, which convert AC to DC power offshore, and DC to AC onshore. Petrofac will be responsible for the engineering, procurement, construction, and installation of the offshore platforms and elements of the onshore converter stations.
The first contract under the Thursday’s agreement is for the Ijmuiden Ver Alpha project, beginning immediately. The second, for the Nederwiek 1 installation, is expected to be awarded later this year. The other projects in the framework agreement include Doordewind 1, Doordewind 2, Nederwiek 3, and LanWin5. Those are expected to be implemented over the next three years.
“Today’s announcement represents an exciting next step in Petrofac and Hitachi Energy’s collaboration. We have already secured key resource and the yard capacity required to expedite the first two projects in TenneT’s ground-breaking program,” said Sami Iskander, Petrofac’s Group chief executive. “By combining Petrofac’s industry-leading EPCI expertise and Hitachi Energy’s well proven technology, we look forward to supporting TenneT to connect larger, more effective wind farms to deliver affordable clean energy for millions of European homes.”
“The new long-term approach goes hand in hand with a fundamental change in values toward a strong partnership. This approach enables both sides with more flexibility, technological progress, and planning security,” said Marco Kuijpers, director, Large Projects Offshore of TenneT. “This benefits all parties and secures employment, growth, and the strengthening of supply chains. We can already see that our partners invest in extra resources and facilities.”
Hitachi Energy and Petrofac began working together last year in support of TenneT’s 2GW Program.
Germany, the Netherlands, Denmark, and Belgium have agreed to install at least 65 GW of offshore wind energy combined by 2030. TenneT will provide services for 40 GW of that total, including 20 GW each in the Dutch and German North Sea sectors.
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).
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