The Great Prayer Day offered relaxation for many, as the holiday is the last time it is a national holiday before it is officially abolished as a holiday in Denmark next year. However, the sales department of the Danish cable company NKT chose not to use the day to take a day off. Instead, the company was able to present two large agreements with a total value of over two billion euros.
The largest of the agreements was signed with the Dutch-German grid operator TenneT, which has chosen NKT to deliver several 525 kV XLPE high-voltage cables based on direct current technology (HVDC), covering both on- and offshore cables. The order is a framework agreement that runs until 2028 with a value of up to 1.5 billion euros. The framework agreement is part of TenneT’s ambitious 2GW Program for offshore wind.
- We are very pleased to be selected once again as a partner for the ambitious 2GW program, confirming our strong position in the high-voltage cable market. We recently announced the contract award from TenneT for orders for IJmuiden Ver and Nederwiek 2, which are also part of the 2GW program, and will be some of the world’s first offshore wind farms to use the 525 kV XLPE HVDC technology for submarine cables. With the framework agreement, we continue our close collaboration with TenneT and apply the innovative cable technology to additional projects in the North Sea, says NKT CEO Alexander Kara.
With the framework agreement, NKT has been awarded the contracts for the Nederwiek 3 and Doordewind 1 & 2 offshore wind farms in the Dutch part of the North Sea with a total installed capacity of 6 GW. The contracts are expected to be implemented in 2025.
Major order from Southern Europe
Although the framework agreement with TenneT was clearly the largest for NKT on Friday, the second order announcement was also a major one. However, this is not a completely new agreement, but instead a final confirmation of an order for two 400 kV high-voltage cable systems for the Bay of Biscay Interconnector, which strengthens transmission security and electricity supply between France and Spain.
The order was first announced in March, but now the joint venture between the Spanish grid operator Red Eléctrica and its French counterpart Réseau Transport d’Électricité (RTE) has finally decided on the order from NKT with a total value of 600 million euros.
The order includes approximately 100 km of onshore cables and 300 km of offshore cables divided into three on- and two offshore sections to avoid laying cables in the underwater gorge Capbreton Canyon. The two cable systems will increase the total energy transfer between France and Spain from 2,800 MW to 5,000 MW.
NKT will produce the cables at its high-voltage factory in Karlskrona, and the entire project is expected to be completed in 2028.
Possible share issue on the way
NKT has also been mulling over a possible capital increase for some time, which will be used to expand production to keep up with demand for high-voltage cables. These considerations were announced in a company announcement in February.
With the award of the framework agreement with TennT, NKT now has high-voltage projects that can be accumulated to approx. EUR 5 billion, which the company itself believes can be considered "significant".
"In light of this, NKT will now initiate investment in additional production capacity and skills, including a third extrusion tower, at the existing, market-leading factory in Karlskrona, Sweden. NKT is also considering the extent of additional installation capacity and skills and how the company will secure this going forward," reads a statement from NKT.
Over the past month, NKT has obtained significant additional commitments for guarantee capacity from banks and export credit agencies, including the Swedish Export Credit Agency (EKN) and the Swedish Export Credit Corporation (SEK), reflecting the company's significant recent order intake. This is considered an important prerequisite for NKT's ambition to grow profitably with increasing market demand.
"NKT will, as soon as possible and no later than the end of May, depending on capital market conditions, share further information on the size of investments, updated financial ambitions and a potential share issue to support growth opportunities," the company states.
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