TenneT awards EUR 1.9 billion framework contract for construction and modernisation of substations

TenneT, together with Siemens Energy, Hitachi Energy, GE Grid and Royal SMIT, has signed a framework agreement worth 1.9 billion euros for the adaption of substations in Germany and the Netherlands to meet the growing demands of the energy transition.

The agreement is for the supply of 110 compensation coils and 160 power transformers. Of this amount, 1.16 billion euros is allocated for German substations and 730 million euros for substations in the Netherlands. Each supplier has been awarded approximately a quarter of the total volume. The successful closing of the framework agreement marks a crucial step in optimizing and maintaining TenneT’s transmission grid.

“The energy transition requires a complete system overhaul, not only with new power lines but also with state-of-the-art substations. To enable the integration of renewable energies into the transmission grid via the distribution grid, we need a significant number of new high-performance transformers. At the same time, our substations will assume system services for frequency and voltage stability, whiche were previously provided by conventional power plants. For this, we require additional equipment such as compensation coils.” Reflecting on the contract signing, Meyerjürgens adds: “With today’s signing of the framework contract, we are sustainably ensuring the construction and modernisation of our substations, driving the energy transition in Germany and the Netherlands.”

Tim Meyerjürgens, COO of TenneT

The framework agreement also underscores the strategic partnership with the four suppliers. It possesses a minimum term of two years and offers the option to extend the contract up to five times, each for one year. In total, 98 power transformers were tendered for Germany, and 61 for the Netherlands. 68 compensation coils were allocated for the Netherlands, and 38 for Germany. These assets will be deployed not only in maintenance projects but also in new construction projects.

Primary Role of substations

Substations can be compared to highway entrances and exits. They connect TenneT’s power highways with the main roads of the distribution grid operators. The core components of every substation are transformers, which transform the electricity to a lower voltage level. Increasingly, the transformers also work in the opposite direction in order to transport locally generated green electricity. Therefore, substations fulfil a dual role: they supply the local region with electricity by transforming the electricity from the transmission grid down to the voltage of the distribution grid and distributing it across the area. Simultaneously, they transform locally generated renewable energy from the distribution grid into the high voltage level of the transmission grid, transporting the electricity to demand centres.

As part of the energy transition, substations are increasingly taking on system services for frequency and voltage control. An important tool for voltage control are compensation coils. Their main function is to provide inductive reactive power to the grid, compensating for capacitive reactive power. Reactive power is essential for the flow of electricity. It is used to adjust the voltage in the power grid as needed, either raising or lowering it to maintain a stable voltage level. However, reactive power reduces the capacity of the power grid for usable active power, which is the energy that actually reaches the consumer. Therefore, it is important to maintain the right ratio of active to reactive power: if the reactive power component is too low, voltage drops, limiting the transmission of electricity. If the reactive power component is too high, it can block the grid, reducing the transport of active power. Compensation coils help maintain this balance. Source: TenneT

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