In 2002, a renewable energy record was set when the global community installed more new renewable capacity than ever before in a single year. The record was broken just a year later in 2003, and again in 2004. This trend has continued, with more renewable energy capacity being added to the global power mix each year for the past two decades. In 2023, there was a significant increase, with 510 gigawatts (GW) of new capacity coming online, representing a 50% increase compared to 2022. At this pace, it is projected that there will be 7,300 GW of renewable capacity by 2028, which is enough to power more homes than there are on the planet.

The electricity generated from renewable sources is increasingly being produced at great distances from the end consumer. Countries with sunny or windy climates are selling electricity to those with less renewable potential. This trend is expected to drive a significant increase in demand for high voltage direct current (HVDC) cabling needed to transmit this electricity over long distances. The question that arises for governments and industry is whether they can secure the millions of kilometers of new cabling required to support the clean energy transition.

The transition to renewable energy is not only transforming the energy landscape but also the geopolitical landscape. As the focus shifts away from fossil fuels, nations with high renewable energy potential are becoming key players for those lacking reliable wind, solar, or hydropower resources. Emerging market economies are developing energy exports that have the potential to transform their economies. Projects like the direct connection between the UK and a solar and wind farm in Morocco are just one example of the ambitious interconnections being planned.

Offshore wind farms are being constructed further from land, adding pressure on the supply of HVDC cables. The demand for these cables is projected to grow significantly in the coming years. While China has domestic manufacturers supporting its vast electricity infrastructure rollout, the rest of the world relies on a few key firms for HVDC cables. Delays in obtaining the necessary cabling have already caused delays in renewable energy projects, highlighting the importance of securing a stable supply chain.

Investing in infrastructure, such as HVDC cabling, is crucial for the energy transition. While there is significant focus on technological innovations, the physical infrastructure needed to support the transition is often overlooked. Grid upgrades and new cable manufacturing facilities are essential to ensure that the transition to clean energy can proceed smoothly. Investors have an opportunity to support this infrastructure development while driving the transition to a sustainable, zero-carbon energy future.

The race to build a sustainable economy requires attention to both technological advancements and the physical infrastructure that supports them. The HVDC cabling bottleneck is just one example of the challenges that need to be addressed to achieve a successful energy transition. By investing in the necessary infrastructure, investors can play a crucial role in driving the transition towards a cleaner, more sustainable energy system.