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Spurred by the efforts of governments and organizations to build offshore renewable power generation facilities, link remote landmasses and interconnect grids, demand for submarine cables for electricity transmission is growing steadily. According to a new report from Pike Research, however, this growth will be impossible for the market to realize using only the current, already strained channels of supply.

"Purchasers and developers have proposed installing an additional 6,800 km of high-voltage submarine cables in almost 70 new projects around the world over the next six years," says chief research director Bob Gohn. "This is nearly double the level of construction during the previous five-year period. There are very few companies capable of performing each step in the installation process, from surveying to final installation."

Gohn adds that the primary limitation on the growth of this industry is the constricted supply of the cables themselves. Only a handful of manufacturers are capable of delivering cables at the capacity and length often required by today’s grid operators, and as projects become more ambitious in terms of cable depth, the field of suppliers becomes even smaller. The current supply chain is capable of fulfilling only half of the planned cables over the next five years, the report concludes. Barriers to entry in this sector are steep, meaning that the submarine cable manufacturing market is unlikely to grow by leaps and bounds in the coming five years.

Responding to projected shortfalls, major manufacturers are expanding existing manufacturing plants, opening new facilities, and continuing to research better and more efficient methods for manufacturing the products required for high-voltage submarine cable deployments. The development of a vibrant second tier of manufacturers that act as subcontractors to the major companies could also help offset the supply bottlenecks. Still, such upgrades to the supply chain will not be enough to keep up with demand if a majority of the planned cables come to fruition in the next five years, the report finds.

For more information on Pike Research’s report, click here.



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