Sumitomo Milestone As Ground Is Broken On £350m Factory Project

15th May 2024

Enterprise agencies welcome Sumitomo milestone as ground is broken on £350m factory project.

Sumitomo Electric Ltd. has broken ground on its new £350m subsea cable manufacturing plant at Port of Nigg on the Cromarty Firth, the chief executives of the enterprise agencies supporting the company have welcomed this significant milestone for Scotland's offshore wind supply chain.

In other welcome news today, SSEN Transmission has announced that Sumitomo is the preferred bidder for its proposed Shetland 2 High Voltage Direct Current (HVDC) link subsea cable, which will help enable the connection of three ScotWind offshore wind farm sites adjacent to Shetland. It will also support local and national decarbonisation and energy security ambitions, further securing Shetland's future electricity needs.

Stuart Black, Chief Executive of Highlands and Islands Enterprise (HIE), said: "Today's ground-breaking event by Sumitomo Electric Industries Ltd is a great boost for the Highlands and Islands economy and demonstrates strong investor confidence in Scotland.

"With the company also named as preferred bidder for SSEN's Shetland 2 link, we now see the exciting prospect of high voltage subsea cables manufactured here in the Highlands being deployed in our own coastal waters and helping to strengthen the UK electricity grid.

"At £350m, the Sumitomo project is one of the biggest inward investments we've ever attracted to the Highlands and Islands, working in partnership with our colleagues in Scottish Development International and Scottish Enterprise.

"The new Inverness and Cromarty Firth Green Freeport played an important role in the company's decision which we expect will lead to around 300 Scottish jobs created on site and in the supply chain."

Adrian Gillespie, Chief Executive of Scottish Enterprise, said: "Today marks an important milestone for Sumitomo Electric Ltd’s planned £350m investment in the Scottish renewable energy supply chain.

“The company’s high voltage subsea cable manufacturing site at Port of Nigg is a critical addition to Scotland’s growing offshore wind supply chain, better enabling us to seize the economic opportunities presented by the global energy transition.

“Scottish Enterprise’s energy transition mission aims to accelerate technology innovation, supply chain capability and investment in manufacturing and key infrastructure. Sumitomo is a great example of this mission in action, and we’ll continue to work closely with them both domestically and through our international arm Scottish Development International, as their plans for Scotland develop."

Sumitomo Electric commences construction work for its new Subsea Cable factory in Scotland with Preferred Bidder notice received from SSEN Transmission for the Shetland 2 525kV HVDC cable project.

On 14th of May 2024, we together with its subsidiary Sumitomo Electric UK Power Cables Ltd, held a ground breaking ceremony at the Port of Nigg, Scotland, where it will build a new subsea cable factory, ready for commissioning in 2026. The event was hosted by Mr. Osamu Inoue, President and COO of Sumitomo Electric Group, and participants included Màiri McAllan, Scottish Cabinet Secretary for Net Zero and Energy and other leading representatives of the UK and Scottish Governments.

Sumitomo Electric is one of the leading global manufacturers of state-of-the-art high-end electricity transmission cables, up to and including 525kV HVDC cable. With more than 100 years’ experience in manufacturing subsea cables, the track record of Sumitomo Electric is extensive and includes the NEMO interconnector between the UK and Belgium, commissioned in 2019 with 400kV HVDC XLPE* insulation cable technology with no operational failure of the cable system since then.
The new factory at Nigg, with investment value announced by the Scottish Government of £350M, will make a significant contribution towards realisation of the UK Net Zero Target by contributing to critical electricity transmission infrastructure to connect and deliver renewable energy, including offshore wind, to UK consumers and beyond. In addition, the factory will create more than 150 highly skilled jobs in the Scottish Highlands, with maximum utilisation of the local supply chain for production of cables and construction of transmission cable systems.

On the day of the ground breaking event, SSEN Transmission, part of leading electricity infrastructure company SSE, announced selection of Sumitomo Electric and its project partner Van Oord as the preferred bidder for the Shetland 2 525kV High Voltage Direct Current (HVDC) subsea cable project. As the anchor project for the new factory, the Shetland 2 project will play a vital role in the delivery of offshore wind energy, generated in the North Sea, to consumers.

Osamu Inoue, President of Sumitomo Electric Group said:
“I am pleased to announce commencement of this innovative High-voltage cable factory in Scotland, and sincerely appreciate SSEN Transmission’s decision to select us as the preferred bidder of Shetland 2 project to enable our significant investment here in the UK. Transmission cables are key essential infrastructures to make so called Energy Transition to renewables into reality. I believe, this factory will make good contributions towards establishment of local supply chains and to realise UK and Scottish Governments’ net zero initiatives."

Rob McDonald, Managing Director of SSEN Transmission, said:
“We are delighted to reach Preferred Bidder Status with Sumitomo Electric Industries and its subsea cable delivery partner, Van Oord Offshore Wind UK, for the manufacturer and installation of the Shetland 2 HVDC subsea link. Sumitomo’s investment in a new cable manufacturing facility in Nigg will help deliver a homegrown supply chain to help support our energy security and net zero infrastructure requirements. This is great news for the Highland economy and will support hundreds of skilled jobs in the region, helping unleash the economic potential the clean energy transition presents for the north of Scotland."

Arnoud Kuis, Managing Director Van Oord Offshore Wind, said:
“As a consortium partner of Sumitomo Electric Industries, Van Oord Offshore Wind UK is very pleased to be nominated as the preferred contractor for the Shetland2 project by SSEN Transmission. The Sumitomo/Van Oord partnership exemplifies a synergy of expertise, driving forward a vision of sustainability, reliability, and excellence in building the energy infrastructure of the Shetland 2 project. We are very much looking forward to a successful collaboration with SSEN Transmission and making the Shetland2 project a success."

Justin Tomlinson, Energy Security and Net Zero Minister, said:
“A second undersea cable connecting Shetland to the Scottish mainland will add 2GW of clean wind-generated power to our grid. Scotland is a green energy powerhouse, and it is fantastic that Sumitomo Electric Industries will build the cable in the Scottish Highlands, creating hundreds more jobs and building up the local supply chain. Since 2010, we have delivered a five-fold increase in renewable power, the second highest amount in Europe, and connecting more renewable energy to the grid will allow the British public to benefit from cheaper clean power.”

Màiri McAllan, Scottish Cabinet Secretary for Net Zero and Energy, said, "“Scotland is fast becoming a renewable energy powerhouse. Today’s ceremony highlights this and is an excellent example of the public and private sectors working together to grow Scotland’s economy and protect our environment - key objectives of the Scottish Government. Backed with £24.5 million of public sector funding, this will be Sumitomo’s first cable factory in Europe and the first High Voltage Direct Current cable factory in the UK, creating hundreds of jobs. The fast-growing offshore wind industry offers significant opportunities to attract inward investment and unlock wider economic benefits, not least in our transformational Green Freeports. That is why we providing up to £500 million to anchor the offshore wind supply-chain in Scotland to ensure our workforce, businesses and communities all benefit from the offshore renewables revolution.”

*1 XLPE = crosslinked polyethylene. Conventionally, mass impregnated cables using highly viscous insulation oil have been utilized for HVDC projects. In recent years, XLPE insulated cables have been commonly adopted due to their higher operating temperature and growing environmental concerns around older technologies. The maximum voltage for in-service HVDC XLPE insulated cables is 400 kV, implemented in the NEMO Interconnector, supplied and delivered by Sumitomo Electric. Sumitomo Electric has also been contracted for the A-Nord project by German transmission system operator Amprion. This project utilise the same technology as employed on NEWO at an increased voltage of 525kV.