Capacity Reservation Agreement secured for the delivery of Shetland 2
SSEN Transmission has today entered into a Capacity Reservation Agreement (CRA) with Sumitomo Electric Industries, Ltd. together with consortium partner Van Oord, for the supply and installation of a second 525kV HVDC cable link between Shetland and the Scottish mainland, known as the Shetland 2 HVDC Link.
The signing of the CRA marks a significant new chapter in, not only Scotland, but the UK too, with planned cable manufacture for the project to be delivered from Sumitomo’s new state of the art manufacturing facility, which is currently under construction in Nigg, in the northeast of Scotland. Cables of this type and technology have never previously been manufactured in the UK and this announcement provides another step towards realising the huge opportunity that the connection and transportation of clean power will bring for the local area and the country as a whole.
It follows the announcement in May 2024 that SSEN Transmission had selected Sumitomo and Van Oord as the preferred bidder for the Shetland 2 project, which was a crucial milestone underpinning Sumitomo’s investment in its new cable manufacturing facility.
The Scottish factory is set to become Sumitomo’s flagship for offshore cabling in the UK and Europe, with construction of the £350million facility now well under way after ground was officially broken last year. The circa 150,000m2 site build is progressing in accordance with the anticipated programme with piling works nearing completion and factory foundations being installed. Foundation work will be followed by steelworks and factory fit out in the 12-15 month window the follows.
Sumitomo has sought to involve the local supply chain in as many aspects of the project works as possible with a construction spend split, to date, of 55% in Scotland and 45% in the rest of the UK and Ireland. The facility will provide employment for 150 workers, with knock-on effects expected to increase the number of indirect employment opportunities by at least double the full-time employee count.
Rob McDonald – Managing Director of SSEN Transmission said:
“We are delighted to reach this major milestone with Sumitomo and Van Oord for the Shetland 2 project. It’s great to see the progress being made at Sumitomo’s new cable manufacturing facility and we are extremely proud to be supporting their investment and the major boost to the Highland economy this will unlock.”
Yasuyuki Shibata – Chair of Sumitomo Electric UK and Europe commented:
“We are delighted to have penned this Capacity Reservation Agreement with SSEN Transmission. This is a significant milestone for Sumitomo’s subsea cable factory investment in Scotland. Sumitomo and Van Oord are committed to successful construction of the HVDC link in a safe and timely manner.”
Arnoud Kuis – Managing Director Offshore Energy at Van Oord added:
“We are pleased to announce the signing of the Capacity Reservation Agreement with SSEN Transmission, representing a significant milestone for the Shetland 2 project. At Van Oord, we take pride in contributing to this initiative with our extensive expertise in cable installation. This agreement underscores our shared commitment to delivering energy infrastructure and enhancing the energy transition.”
Minister for Investment – Baroness Gustafsson OBE said:
“Economic growth is an integral part of our Plan for Change, and this fantastic investment will play a key role in supporting our transition to net-zero. With clean energy being identified as a growth sector in our upcoming Industrial Strategy, we're not only helping to attract and secure investment, but delivering long-term, stable growth that supports skilled jobs across Scotland and the UK."
Energy Minister – Michael Shanks said:
“Our mission to make Britain a clean energy superpower brings with it vast opportunities to invest in our highly-skilled British supply chains, creating thousands of jobs in Scotland and across the UK. Sumitomo’s manufacturing facility is a fantastic example of the world-leading offshore expertise here in Scotland – which will play a huge part in the expansion of the UK’s homegrown clean energy sector.”
Acting Energy Secretary – Gillian Martin 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 over five years to anchor the offshore wind supply-chain in Scotland, ensuring our workforce, businesses and communities all benefit from the offshore renewables revolution. This announcement builds on crucial support provided by the Scottish Government to Sumitomo, which will locate its cable factory at Nigg creating hundreds of jobs in the Highlands.”