Future high-voltage-direct-current cable supply and demand as a potential threat to the European Union's energy transition

This paper analyzes the main factors influencing manufacturing costs of high-voltage-direct-current (HVDC) cables in the European Union (EU), scenario developments until the year 2050, and measures that could potentially stabilize cable production costs. HVDC cables play an important role in the energy transition, because the economic operation of an increasingly decentralized power grid due to renewable energies requires technology with low transmission losses. Since the EU lists copper as a strategic raw material and its availability is critical for the manufacturing of HVDC cables, a partial equilibrium model is employed to reduce uncertainty in price estimates for this commodity. In a sensitivity analysis, the contribution of each input variable to our cable cost model is assessed. The results suggest that HVDC cables exert a negligible effect on EU copper demand, although cost trends diverge significantly across the baseline and Shared Socioeconomic Pathways (SSPs) 1, 2, and 4 from the SSP framework that depicts five plausible future world scenarios. Compared to 2022, values in 2050 differ by 26.5 %, −42.6 %, 13.8 %, and 108.8 %, respectively, including a copper supply shortage in the baseline and in the SSP4 scenario. The input parameters global population, energy price, and recycling rate have the highest sensitivity. The paper concludes that cable costs are tied to the affordability of copper, demanding a resilient supply chain and increasing recycling efforts. Metal availability and regulatory framework impact the timely development of the HVDC connections that will be necessary for the energy transition in Europe. • HVDC cable costs depend primarily on the conductor material, energy, and labor. • Some 140,000 km of additional HVDC cables shall be installed in Europe by 2050. • Modeled commodity price increases due to HVDC demand appear to be negligible. • Future supply of copper, a major cost driver, is uncertain and should be addressed. • Copper demand grows rapidly with population growth and electrification efforts.