How grid and transmission equipment is procured: the supplier field narrows before the project

In its report of February 2025, the IEA found buyers of transmission equipment competing for limited production slots, in many cases with only one supplier available, and turning increasingly to long-term framework agreements, especially in Europe; in the United States, contracts are generally still project based. For a supplier in Europe, that moves much of the contest out of the project tender and into earlier steps.¹

Under the EU utilities directive, the contracts a qualification system covers are awarded among the suppliers already qualified, while a framework agreement sets the terms, in particular on price, for contracts awarded during its term. Admission to the list decides who may compete for the contracts it covers; the framework award decides on what terms. Neither is the work itself: a place brings the chance to compete for later contracts, not the contracts themselves.²

A qualification system is a standing list: under the directive, suppliers must be able to apply to join it at any time, and the entity running it must give an applicant its decision within six months.² TenneT’s qualification system for platforms and HVDC for its Dutch 2 GW projects, published on 7 April 2021, asked for an HVDC type test certificate or report with one reference project, topside and jacket reference projects with the fabrication yard, and environmental, quality and safety management certificates.³ Energinet and 50Hertz’s system for HVDC converter substations, as published on 27 September 2023, asked for an equity ratio of at least 20% and at least two references for HVDC point-to-point VSC converters of at least 320 kV, each in commercial operation for at least 12 months.⁴

These are conditions a supplier meets or fails before any price is asked for: without the references, it cannot compete for the contracts the system covers, however low it would bid. Nor can such a reference be produced for the occasion: the converter must already have run in commercial operation for the period the notice sets.

The right to apply at any time does not mean a list is still taking suppliers in. In a notice of 22 January 2024, TenneT said a tender under its qualification system for 2 GW HVDC stations had finished in 2023 and that, with no new tender foreseen, it was not planning to review new requests to qualify. Before preparing an application, check the system’s latest notice for whether it is still reviewing requests.⁵

In its report of February 2025, the IEA found that supply frameworks for transmission equipment typically run up to five years, with fixed and variable price components, the variable part commonly indexed to inflation or raw material prices. For a supplier, the framework award is where it commits to a price for work not yet called off, and the indexation terms decide how much of a later rise in costs that price absorbs.¹

National Grid’s contract notice for its HVDC converter framework, published on 1 December 2023, put the framework’s estimated total value at GBP 24.6 billion excluding VAT. On 13 March 2025, National Grid awarded HVDC supply chain frameworks to six cable suppliers, one of them a consortium, for about GBP 21.3 billion, and to four converter suppliers for about GBP 24.6 billion, each for five years with a possible extension of three.^{6, 7, 8} On 21 August 2025, it awarded civil works for about GBP 12 billion, the third and final stage.⁹ These are framework values, the converter figure an estimate in the notice itself, not orders: the work under them is awarded as call-offs, contracts placed under the framework during its term.

The early projects show how closely the framework and project contests can run. The converter notice named Eastern Green Link 4 and Sealink as early projects whose call-offs would run in parallel with the procurement of the framework itself, given their criticality and the timeframe set by Ofgem’s Accelerated Strategic Transmission Investment (ASTI) framework. A place on the framework would be a condition for the award of any call-off contract, and suppliers would have to take part in the early call-offs before that place was confirmed; for those projects, National Grid also reserved its rights to use different procurement routes. For those early projects, a supplier would bid for the work before knowing whether it could be awarded it at all.⁶

TenneT’s 2 GW cables partnership tender awarded framework agreements in five lots, concluded on 14 April 2023, to NKT, Nexans and a group of Jan De Nul, Denys and LS Cable & System; the notice publishes no values.¹⁰ On 17 May 2023, TenneT signed multi-year framework agreements with Allseas and Heerema for at least 28 transport and installation slots until 2031, not linked to specific projects, and said all major framework agreements of its 2GW Program had been awarded. Slots booked without a project attached reserve capacity before the work is defined.¹¹

Large equipment takes years to arrive: the IEA, in a survey of industry players in 2024 (its report does not give the number of respondents), found that large power transformers can take up to four years to obtain, and the same report notes that buyers in Europe and the United States are booking manufacturing slots rather than buying material for delivery.¹ Ofgem’s decision of 20 March 2025 on an Advanced Procurement Mechanism brings forward about GBP 4 billion of the transmission owners’ allowances, money that would otherwise be approved later as projects reach funding milestones, so that they can book capacity for equipment and services years before it is needed. It notes that, in some instances, supply chain capacity is already booked up several years out.¹²

Scarce factory capacity is one reason these buyers commit early, not the only one: National Grid’s notice tied the planned parallel call-offs to the projects’ criticality and to the timeframe of the ASTI framework.

Our field note on transformer lead times and grid tenders follows those lead times from the framework into the contract, where a long wait becomes a supplier’s risk.

Under the EU utilities directive, a framework agreement may not run for more than eight years, save in exceptional cases duly justified. The directive also draws a line by origin: it gives suppliers from countries covered by the WTO Government Procurement Agreement or the EU’s other agreements treatment no less favourable than the EU’s own suppliers receive, but a supply tender may be rejected where products from third countries without such an agreement make up more than 50% of the total value of its products. For an equipment maker whose products come mostly from such countries, that is a ground for rejection that no price can offset.²

Like the directive, the UK’s Procurement Act 2023 limits a utilities framework to eight years, unless the buyer considers that the nature of the goods, services or works requires a longer term and gives its reasons in the notice; the limit does not apply to a framework awarded by a private utility.^{2, 13} The Cabinet Office’s guidance says the Act replaces qualification systems, and dynamic purchasing systems, with the dynamic market: a list of qualified suppliers eligible to take part in future procurements.¹⁴

The Act does not apply to procurement by devolved Scottish authorities, except in cases it sets out. A public undertaking or private utility that operates only in, or in relation to, Scotland is treated as one of those authorities unless all of its activities relate to reserved matters. Scotland has its own Utilities Contracts (Scotland) Regulations 2016, which this guide does not cover.^{15, 16, 17} Under the Scotland Act 1998, the generation, transmission, distribution and supply of electricity are reserved matters.¹⁸ A Scotland-only electricity utility whose activities all fall within that reservation is therefore not a devolved Scottish authority, and is not excluded from the Act on that ground.

The Utilities Contracts Regulations 2016, which do not extend to Scotland, still govern a utility’s procurement where, before 24 February 2025, it had concluded the framework agreement or submitted a contract notice or a notice on the existence of a qualification system, among other cases the transitional rules list. A qualification system run under those Regulations expires, if it has not already, at the end of 23 February 2029, and its period of validity may not be changed after 23 February 2026. A supplier on such a list keeps that place no longer than that; a utility’s new lists under the Act are dynamic markets. National Grid’s converter framework, advertised on 1 December 2023, therefore falls under the 2016 Regulations, not the Act.^{19, 20}

Not every grid buyer works through a list or a framework. ZESCO’s Request for Bids for Package 4, the Nakonde Stepdown and Kasama 330 kV substations in Zambia, was issued on 11 May 2026, and after amendment bids were due on 25 September 2026. It was an international Request for Bids under the World Bank’s procurement regulations, open to all eligible bidders and without prequalification. Each bid still had to clear a qualification bar: an average annual energy-sector turnover of at least USD 42 Million over the last three years, and similar experience on contracts for a greenfield substation of at least 330 kV in the last ten years.^{21, 22} To compare bids, and for that purpose only, the evaluation added capitalised losses to each bid’s price: transformer no-load losses at USD 12,000/kW and load losses at USD 7,000/kW, and reactor total losses at USD 12,000/kW. After factory tests, losses above the guarantee could bring penalties per kW, and a transformer or reactor more than 10% over its guaranteed losses could be rejected.²¹

Our field note on the Nakonde and Kasama substation tender reads those loss rules, the scoring and the contract in full. There, no list or framework stood between a supplier and the bid, and the bid carried the whole commitment: a lower guaranteed loss improved the evaluated cost, and losses above the guarantee could bring penalties.

Source: the procurement law and the buyers’ notices and releases cited below.^{2, 3, 4, 5, 6, 7, 8, 10, 11, 13, 21}

Terms not explained above

• HVDC: high-voltage direct current.
• VSC: voltage source converter.
• Lot: a part of a procurement awarded on its own, often by project or by equipment.
• Lead time: the time from order to delivery of a piece of equipment.

Where the notices are published

The EU notices cited here are on Tenders Electronic Daily (TED), which also carries notices on the existence of a qualification system; the UK ones are on Find a Tender.

ListingMinds, “How grid and transmission equipment is procured: the supplier field narrows before the project”, 3 October 2026, updated 22 October 2026. https://www.listingminds.com/energy/guides/grid-and-td