An international alliance of offshore cable companies has revealed plans to create the “world’s largest” £923 million factory on Tyneside.
Korean cable manufacturer LS Group has joined forces with Global Interconnection Group (Euronext NV: GIG), a European investor platform formed to specialise in transmission infrastructure.
The two groups have forged a joint venture, LS Eco Advanced Cables, to build a the high voltage direct current (HVDC) cable factory at Port of Tyne.
The partners said they have agreed a “limited but extendable” exclusivity period to negotiate the terms of a long lease for the port’s Tyne Renewables Quay site for the factory.
Global subsea cable shortage
The announcements comes as activity heats up in cable manufacturing in the UK, driven by growth in the need for subsea interconnectors and offshore wind.
GIG has flagged concerns over a looming “severe shortage” of HVDC cable.
More manufacturing capacity is needed to meet growing demand due to the growth of renewable energy production and electricity consumption, GIG said.
Goldman Sachs has estimated the sector will need $128 billion of investment in the
period to 2030.
UK cable factory expansion
In the UK, a number of projects are targeting similar needs.
Japanese cable firm Sumitomo has confirmed a final investment decision on a £350m factory at Nigg in the Highlands.
© Simon Price PA Media AssignmentsMeanwhile construction on JDR’s £130m subsea cable factory at Cambois, near the port of Blyth in Northumberland, is also progressing.
Another firm, XLCC, is planning another HVDC factory in Ayrshire on the site of the Hunterston B nuclear plant which is being decommissioned.
The investments have come as the UK gears up for a significant expansion in offshore wind development.
The UK Government has targeted 50GW of energy from offshore wind by 2030. Developers are also planning over 20GW of floating offshore wind capacity, mostly on Scotland. These wind farms in deeper water further out to see will be more reliant on HVDC cables.
GIG is also involved in developing a portfolio of interconnector projects. This includes the £3.5bn Atlantic SuperConnection, a 1.2GW link between Iceland and UK.
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