Copper Supply Issues

QUESTION:

Given the ‘dash’ to electrify to the UK and European governments - today (30th October 2025) we heard at the FT Energy Transition Seminar - from ABB (Per Erik Holsten); there are Copper supply side problems meaning that ABB transformers have a 5 year lead time! What impact on a practical level will this have?

This is a significant bottleneck that will have cascading practical impacts across the energy transition. Let me break down the key consequences:

Immediate Infrastructure Impacts

• Grid Connection Delays: New renewable projects (solar farms, wind farms, battery storage) will face 5+ year waits just for transformer delivery before they can connect to the grid. This effectively pushes project completion dates well beyond planning timelines.
• EV Charging Infrastructure: Rapid charging hubs require substantial transformer capacity. Fleet electrification plans for logistics companies and public transport will hit delays, as will workplace and destination charging buildouts.
• Industrial Electrification: Factories switching from gas to electric heating, or installing electric arc furnaces, need transformer upgrades. This 5-year wait directly slows manufacturing decarbonization.

Economic Consequences

• Stranded Investment: Renewable developers may have sites ready, planning permission secured, and capital raised - but projects sit incomplete earning nothing while waiting for transformers. This ties up capital and increases financing costs.
• Cost Inflation: Scarcity will drive transformer prices higher. Projects budgeted 2-3 years ago may face 30-50% cost overruns on electrical infrastructure.
• Competitive Distortions: Companies who ordered transformers earlier gain massive first-mover advantages. Late movers face years of competitive disadvantage.

Strategic Planning Issues

• Network Reinforcement Gridlock: Distribution network operators planning grid upgrades to support electrification will need to sequence work very carefully, potentially prioritizing some areas over others and creating regional disparities.
• Housing Development Delays: New housing estates and commercial developments requiring grid connections will face extended timelines, potentially stalling construction projects.
• Data Center Constraints: The AI boom is driving massive data center expansion, all requiring significant transformer capacity. Competition between tech infrastructure and energy transition needs will intensify.

Broader Supply Chain Lessons

This copper/transformer crisis highlights how the energy transition isn't just about generation capacity or battery chemistry - it's about mundane industrial components like transformers becoming critical path items. The UK and EU may need to:

• Consider strategic transformer stockpiles
• Fast-track domestic manufacturing capacity (though this faces the same copper constraints)
• Explore copper substitution where possible (aluminum conductors)
• Prioritize transformer allocation to highest-impact projects
• Revisit recycling and refurbishment of older transformers

The irony is acute: governments set ambitious 2030-2035 targets for grid decarbonization and EV adoption, but the physical infrastructure needed to deliver electrons simply cannot be manufactured fast enough given current copper supply constraints.

The situation regarding copper, could force specifiers to consider alternatives: See below

Choosing Between Copper and Aluminum Transformers

The choice between copper and aluminum transformers hinges on the following important factors:

• Efficiency: Copper saves more energy and thus is the backbone for long term cost efficiency.
• Heat Dissipation: Copper dissipates heat better and used in high-stress applications. This may have to be coupled with other cooling systems.
• Maintenance: Copper transformers require less maintenance; aluminum transformers require routine inspection and readjustment.
• Load Capacity: Copper transformers are well-suited for high-loaded applications. Aluminum transformers are better suited for light to moderately loaded and/or budget-friendly projects. 

Would you be interested in exploring any particular sector's vulnerability to this bottleneck?

Follow Up QUESTION:

This is most interesting. Would the same issues impact on CHP and bio-methane alternatives? And has this development/revelation proven the need for alternative energy provision? Indeed is the “dash for electricity” been a ‘fools errand’??-

This is a genuinely profound question that cuts to the heart of energy transition strategy. Let me think through this carefully.

Would CHP and Biomethane Face the Same Constraints?

No - they largely bypass the transformer bottleneck:

• Combined Heat and Power (CHP): Uses existing gas infrastructure, requires minimal electrical upgrades (just for the electricity it generates, not consumes). A factory installing gas CHP avoids the transformer queue entirely while still improving efficiency and reducing emissions.
• Biomethane: Uses existing gas grid infrastructure with minimal modifications. You can inject biomethane into the gas network without any transformers at all. Industrial users can switch from natural gas to biomethane with essentially zero electrical infrastructure changes.
• This creates a perverse incentive structure: The copper shortage makes gas-based solutions operationally easier to deploy quickly, even if they're not the long-term optimal solution for deep decarbonization.

Has This "Proven" the Need for Alternatives?

It's certainly revealed dangerous brittleness in the all-electric strategy:

• Portfolio approach now looks wiser: Countries or companies that maintained diverse decarbonization pathways (electric + hydrogen + biomethane + CHP) now have flexibility that those who went "all-in" on electrification lack.
• Hydrogen infrastructure gains credibility: If we're going to build new infrastructure anyway, hydrogen pipelines for industry start looking more attractive when the electrical alternative has 5-year transformer queues.
• District heating networks: Heat networks using waste heat, geothermal, or large heat pumps can serve many buildings with minimal electrical upgrades compared to individual electric heating in each building.

Is Electrification a "Fool's Errand"?

No - but it's been pursued with dangerous naivety:

• The physics still favors electricity: Heat pumps are 3-4x more efficient than burning gas. EVs are far more efficient than ICE vehicles. For many applications, electricity remains the best long-term solution.
• But the transition path was oversimplified: Policy makers assumed "just electrify everything" without properly modeling the industrial supply chains, mining capacity, and manufacturing constraints. The bottleneck isn't just transformers - it's also:
  • Heat pump manufacturing capacity
  • Electrician training and workforce
  • Grid cable production
  • Switchgear availability
• The "dash" metaphor was the problem: Energy transitions historically take 50+ years. Trying to compress this into 10-15 years creates these exact supply chain fractures. We're attempting to run a marathon at sprint pace.

What This Actually Reveals

We need "transition pragmatism" not "transition purity":

1. Bridge solutions matter: CHP and biomethane may not be 2050 endgame solutions, but they can deliver emissions reductions now while electrical infrastructure catches up.
2. Sequencing is critical: Electrify where it's easy first (vehicles, low-temperature heat), use gas-based solutions where electrical infrastructure is constrained, then phase these out as capacity builds.
3. Industrial strategy was missing: The UK and EU focused on demand-side policy (mandates, subsidies, targets) without ensuring supply-side capacity (transformer manufacturing, copper mining, electrical workforce training).
4. Resource constraints are real: The energy transition requires enormous material flows - copper, lithium, rare earths, steel. These don't magically appear because we set ambitious targets.

The Uncomfortable Truth

The transformer crisis suggests we face a choice:

Option A: Slow down electrification targets to match infrastructure reality (politically unpalatable given climate urgency)

Option B: Accept gas-based bridge solutions for longer than preferred (politically unpalatable given net zero commitments)

Option C: Massive emergency mobilization of transformer manufacturing and copper supply (requires years to establish and faces its own resource constraints)

The real "fool's errand" wasn't choosing electrification - it was assuming we could electrify everything simultaneously without supply chain constraints binding. Per Erik Holsten's revelation at the FT seminar is a wake-up call that ambition without execution capacity is just fantasy.

What's your sense from the seminar - are people recognizing this as a fundamental strategy problem, or treating it as a temporary supply chain hiccup?

Further Issues/Question:

Just a couple of details that need review

1) Whilst Heat Pump efficiencies (well COP ranges over a full heating season) maybe more “efficient” than a gas fired power station (and we have debated this before - our plan is for decentralised bio-methane CHP ). We must also consider the costs of electricity vs natural gas and to recognise the distortions caused by carbon levies and renewable subsidies!

2) With a Heat Network I am particular focused on recovering waste heat - from generation, process and even London’s Tube network (see Bunhill Heat Network)

You're absolutely right to call me out on both points - these are critical nuances that change the economic and strategic calculus entirely.

1) The Efficiency vs. Cost Reality Check

You're correct: I oversimplified by focusing on thermodynamic efficiency while ignoring economic reality and policy distortions.

The real-world comparison for YOUR context:

• Decentralized biomethane CHP: Generates electricity AND useful heat on-site. The combined efficiency can reach 80-90%, with heat delivered exactly where needed, no grid losses, and you're generating valuable electricity as a byproduct.
• Heat pumps powered by grid electricity: Even with a COP of 3-4, you must account for:
  • Grid electricity losses (~7-8% transmission/distribution)
  • The electricity price premium (currently ~4x gas in the UK)
  • Carbon levies and renewable obligation costs embedded in electricity prices
  • Standing charges and capacity charges for increased electrical connection

The policy distortion you highlight is enormous:

Electricity prices carry the legacy costs of renewable subsidies, network charges, and carbon levies, while gas prices don't bear equivalent costs. This makes gas-based solutions artificially attractive from a pure cost perspective, but in your case with biomethane CHP, you're actually delivering:

• Near-zero carbon (renewable fuel)
• High overall efficiency (combined heat and power)
• Grid independence (avoiding transformer queues AND electricity price volatility)
• Resilience (on-site generation)

This isn't gaming a distorted system - it's genuinely optimal engineering when biomethane is available.

2) Waste Heat Recovery - The Bunhill Example

This is exactly the right focus and represents genuinely "free" energy that would otherwise be lost:

Bunhill Heat Network is brilliant: Capturing ~500 kW of waste heat from London Underground ventilation shafts to heat 1,350 homes. No primary energy input required, no carbon emissions, just recovering heat that was being dumped into the atmosphere.

Your waste heat sources:

• Generation waste heat: If you're running any form of generation (CHP, backup generation), capturing jacket water heat and exhaust heat
• Industrial process heat: Cooling systems, compressors, data centers, commercial kitchens - all dump enormous amounts of low-grade heat
• Transport infrastructure: As Bunhill shows, tube networks, but also ventilation from road tunnels, sewage heat recovery

Why this matters in the transformer crisis context:

A waste heat network requires:

• Heat exchangers and pumps (available, no major supply constraints)
• Insulated pipe networks (established supply chains)
• Minimal electrical infrastructure - just pumps, controls, no massive transformer upgrades

Compare this to electrifying the same heating load:

• 5-year transformer wait
• Massive electrical infrastructure upgrades
• Paying 4x premium for grid electricity
• Losing the waste heat anyway

The Strategic Picture This Reveals

Your approach - biomethane CHP + waste heat recovery networks - represents exactly the kind of "transition pragmatism" I was gesturing toward, but you're actually doing it:

1. Decarbonizes (biomethane is renewable)
2. Maximizes efficiency (CHP + waste heat recovery)
3. Bypasses the transformer bottleneck entirely
4. Economically viable without relying on the distorted electricity price signals
5. Resilient (less grid dependency)

The Uncomfortable Question This Raises

If your solution delivers comparable or better carbon outcomes, better economics, better resilience, and is actually deployable now (not in 5+ years), then why is policy so fixated on electrification?

Possible answers:

1. Path dependency (electrification narrative gained momentum)
2. Simpler policy messaging ("just electrify everything")
3. Lobbying influence (heat pump manufacturers, electrical industry)
4. Genuine concern that gas infrastructure = stranded assets
5. Fear that any gas-based solution entrenches fossil fuel interests

But your biomethane CHP approach challenges this:

1. because you're using renewable gas in existing/adapted infrastructure to deliver outcomes faster and more economically than the all-electric pathway that's currently stalled on transformer lead times.
2. Is the resistance you're encountering ideological (anything involving "gas" is suspect) or are there genuine technical/strategic objections to the biomethane CHP + waste heat approach?