Europe Energy Briefs: Europe’s utilities supply chains

System operators in Europe, like their counterparts elsewhere, have been encountering growing supply chain challenges in sourcing essential equipment and key components in recent years.

So much so that the European Commission in its grid action plan called for it to be addressed through inter alia supporting standardisation efforts, developing common practices and enhancing the visibility of operators’ product pipelines.

Efforts have been made in some countries, such as the introduction of good practices to streamline certification processes, simplifying procurement procedures for suppliers and participating in joint procurement activities.

The European Commission, in its Clean Industrial Deal, has also announced measures to increase local production capacities within the EU and the revision of the EU public procurement framework, announced for 2026, should support a resilient and smooth supply chain.

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But clearly, the more cooperation, the better. In a new joint paper, the DSO Entity and E.DSO delve further into the supply chain issue, particularly as it impacts DSOs, and to recommend mitigating best practices.

Surveys by the two organisations reveal that three categories of critical and hard to procure components can be identified – transformers at all levels, i.e. HV/MV/LV and both conventional and innovative types, cables with the high prices for copper, aluminium and plastics, and switching equipment including switchboards, switchgear – especially SF6-free – circuit breakers and earthing switches among others.

In addition to these categories, smart meters and IT and telecommunication equipment were mentioned as most critical for the grid.

The organisations comment that the supply chain constraints are primarily caused by the significantly increased demand for equipment due to decarbonisation and increased electrification.

However, other issues seem to be a scarcity of certain individual components such as chips, new sustainability requirements such as the ban on SF6 switchgear, shipping problems, lack of production capacity, competition with other sector stakeholders and lack of qualified labour.

The organisations also note that with more than 40,000 different components, the technical complexity and differences in equipment are higher for DSOs than TSOs, often entailing more complex, tailor-made equipment needs for DSOs.

Overcoming the challenges

The joint paper reviews specific practices introduced by DSOs, including simplifying certification processes and ensuring voluntary interoperability, streamlining procurement practices, joint procurement platforms and enhancing visibility of needs to suppliers.

But the struggles met in terms of procurement go beyond the proactive solutions of distribution system operators alone, the paper states. Building stronger exchanges between the supply chains and the grid operators is already a way forward to a more holistic approach to the challenges identified. Longer forecasts of grid operators’ needs and projects pipelines are currently being developed in that direction.

The paper also highlights the role of the DSO network development plans, although not all DSOs are yet developing and/or publishing these as the relevant legislation is not yet transposed in all member states.

The DSO Entity is currently investigating ways to enhance the effectiveness and viability of these plans to support the supply chains.

In conclusion, that paper states that despite the measures developed by DSOs among themselves and beyond their sector and recently announced activities at the EU level, greater support will be needed on all levels to solve the issues in the interest of a sustainable and reliable energy transition.

Specifically for the supply chains, existing legislation, including the Net Zero Industry Act and affordable energy action plan, need to be implemented along with the measures announced around them, including those to increase the manufacturing capacity of components and the €1.5 billion grid manufacturing package.

On public procurement, facing complex EU provisions and obstacles to joint procurement, there needs to be coherence and simplification of the various procurement-related legislation.

To address DSO labour shortages, there should be active inclusion of DSOs in existing EU initiatives for (re-) skilling of the workforce and the launch an EU targeted skills academy for grids, as envisaged in the Union of Skills or a European grids academy under the framework of the Net-Zero Academies.