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Energy Evolution
No transition without transmission? The grid equipment bottleneck explained
Feb 11, 2025
Andreas Schierenbeck, CEO of Hitachi Energy, shares insights into the grid equipment bottleneck affecting renewable energy deployment. He discusses the complex manufacturing of transformers and the long lead times for essential components. The conversation addresses investment trends and the urgency of scaling production to meet rising energy demands. Additionally, the challenges of recruitment amid geographic supply chain issues highlight the necessity of strategic planning and collaboration to enhance infrastructure efficiency and support a cleaner energy future.
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Quick takeaways
- The rapid increase in demand for grid infrastructure, particularly transformers, is creating significant supply chain challenges that could slow down the energy transition.
- Investment in modernizing grid equipment, such as through the EU's 580 billion euro initiative, is essential to meet the rising electrification demands driven by clean energy technologies.
Deep dives
The Essential Role of Grid Infrastructure in Energy Transition
Grid infrastructure, including transformers and cables, is crucial for connecting renewable energy projects to the grid and addressing growing energy demands. As the demand for electrification from sources like electric vehicles and data centers surges, the aging infrastructure is struggling to keep up; hence, investment in grid components is becoming a bottleneck in the energy transition. The European Union aims to invest over 580 billion euros in grid enhancements by 2030 to modernize and expand these essential systems. However, scaling up production of significant components like transformers presents challenges, as these large pieces of equipment require substantial time and skilled labor to manufacture.
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