On a stretch of marshland a few miles from Tilbury Fort in south-east England, engineer Nick Mallinson surveys the network of wires and transformers that form the heart and lungs of a new battery storage site due to open in March.
The time it takes to get hold of this key equipment is climbing as international manufacturers face rising demand from countries trying to install new wind turbines, solar panels and batteries to meet their decarbonisation goals.
“This is the main hub of the project — it facilitates the energy to the battery site,” said Mallinson, project manager for Statera Energy’s storage plant in Thurrock, which will be capable of storing and supplying two hours’ worth of electricity to up to 700,000 London homes at less than a second’s notice.
Its three 130-tonne transformers, needed to make sure electricity goes in and out of the batteries at the right voltage, arrived from China last June, 16 months after they were ordered from Siemens Energy.
Lengthy waits for transformers and other electrical equipment risk causing the UK to miss its ambitious goal of decarbonising Britain’s power supplies by 2030.
The UK’s National Energy System Operator said the goal would require a “once in a generation shift in the pace of delivery” but warned of the risks that supply chains could “overheat”, ultimately pushing up energy costs for businesses and households.
Lord Philip Hunt, UK energy minister, told parliament last month of waits of up to four years for high-voltage equipment, and two years for lower voltage kit, due to growing demand.
“There are material constraints in the supply chain for transformers and HVDC (high-voltage, direct current) converters,” said Rob Gilbert, partner at the consultancy Baringa.
He noted that lead times for such equipment have doubled, or in some cases tripled, over the past decade. “It is challenging to see a scenario where transformers are not a bottleneck in the UK’s mission” of transitioning to decarbonised power by 2030.
Benjamin Boucher, senior supply chain analyst at the consultancy Wood Mackenzie, estimates that, along with longer lead times, global transformer prices have climbed 40 per cent to 60 per cent over the past three years, depending on their specification.
For example, the costs of a 211-MVA “generation step-up” transformer — required for power projects that connect directly to the high-voltage transmission system — climbed from $2mn to $2.9mn.
“It’s something that’s definitely becoming a bottleneck for the energy transition as a whole,” Boucher said. “If we don’t see capacity ramp up, it’s going to hinder our ability to connect clean energy to the grid.”
Transformer manufacturers are responding to the rising demand. US company GE Vernova, for example, is expanding its factory in Stafford in the UK, while Switzerland-based Hitachi Energy announced in April it was investing an extra $1.5bn in global transformer capacity. Siemens Energy is also expanding its manufacturing in Croatia and Austria and building a new factory in the US.
However, Andreas Schierenbeck, chief executive of Hitachi Energy, said the sector is cautious about overinvesting despite the rising demand. “I need predictability for shareholders. I have to show them a pipeline of offtake.”
Manufacturers themselves depend on complex supply chains involving specialist machinery, such as electrical coil winding machines. “[For those] you have to train a winder, which takes around one to two years before he can work alone.”
Schierenbeck added that Hitachi Energy was open to putting a new factory in the UK, if the business case supported it. “If customers and government would team up and say, this is what we need for the next five or 10 years, dedicated to that asset, then of course we are talking. But we are not taking the risk of having no offtake at all.”
As well as long waits for large transformers, industry group Electricity Storage Network has also warned the government about the limited number of companies that can construct and maintain battery sites, on behalf of developers.
“There are fundamental limitations on how much we can deploy,” said Olly Frankland from ESN, which is managed by Regen.
Lord John Spellar, a former Labour minister, said the strains showed the government’s “electrification plans could stumble unless we reboot Britain’s industrial capacity for the long term”.
He called for “new factories and a trained workforce, which requires a complete change of mindset in Whitehall — and fast”. The Department for Energy Security and Net Zero said it was “working with Ofgem [the energy regulator] to support industry on speeding up transmission lead times”.
For some energy developers, the shortage of transformers is dwarfed by strains in other areas. “You have to book the capacity much earlier than you would want to,” said one executive at a large battery project. “But I think the picture with transformers is OK: it’s not as bad as [wind] turbines, vessels or floating foundations, which take years of development and investment required in factories.”
Other crucial electrical components, such as switchgears and circuit breakers, also require two years for manufacturing, he noted. “So, you might solve the transformer issue and then find its circuit-breakers that are on a 24-month lead time anyway,” he said.
Supply chain constraints are among several factors behind consultancy Cornwall Insight’s forecast that the UK government will miss its 2030 clean power capacity targets.
Kate Mulvany, principal consultant at Cornwall Insight, said: “It’s a little bit like whack-a-mole. There are solutions to supply chain constraints. But if you are trying to do something at pace it can hobble you.”
