Rising investment in grids, renewables, electrification and data centres is colliding with limited manufacturing capacity, creating multi-year lead times for critical equipment. In this market, traditional price-led, project-by-project procurement is no longer enough.
This article discusses:
- Energy companies must shift to capacity orchestration: aggregating demand across projects, sharing credible multi-year signals, engaging strategic suppliers earlier and using frameworks, reservations or volume commitments to secure production slots.
- Leading organisations are already redesigning planning, governance and supplier relationships around this model
- Delivery advantage will belong to buyers that become the customers suppliers plan around and not those that simply run the lowest-cost tender.
- Priority should centre on components where supplier capacity directly determines delivery
Winning the capacity race
Planning is no longer about predicting demand, it is about earning supplier commitment.
The climate and policy goals rising from the ongoing energy transition and decarbonisation are creating a period of structural tension between supply and demand in the energy and infrastructure sectors.
On the demand side, three forces are converging. Two are familiar, grid reinforcement and renewable energy deployment driven by the energy transition and the electrification of transport, heating and industry. The third is the rapid growth of data centres, which are becoming major buyers of electrical infrastructure.
Large cloud and AI facilities require grid connections, substations, transformers, cables, switchgear and backup power systems before they can connect and operate. As a result, data-centre developers are now competing with utilities, network operators and renewable developers for the same constrained supplier capacity.
The European Union’s commitment to achieving net-zero emissions by 2050 reinforces this demand trajectory: meeting that target will require sustained investment in renewable generation, grid reinforcement and electrification, increasing procurement pressure on the same constrained base of suppliers, equipment and specialist labour.
// Power demand outlook
EU Power demand expected to increase significantly by up to 75% until 2050 depending on the scenario
Two scenarios for EU power demand
2023 – 2050, Power consumption EU27, TWh
Stated policies (STEPS)1
+65%
Announced Pledges (APS)2
+75%
Buildings
Industry
Transport
Other
¹ Conservative outlook without major additional steering from policy makers ² Outlook, where policy makers implement announced ambitions and targets
Source: World Energy Outlook (IEA, 2025); BCG Inverto analysis
Key insights
- Overall power demand expected to increase by 65% and 75% until 2050 for the STEPS and APS scenario, respectively
- Buildings demand expected to increase by ~36% and ~23% until 2050 depending on scenario
- For the industry sector, power demand expected to increase by ~27% and ~65% until 2050 in the STEPS and APS, respectively. Increase in APS is mainly due to the shift to electrification of industrial processes
- Power demand of the transport sector is expected to increase more than 11-fold (STEPS) and over 12-fold (APS) by 2050, mostly due to the accelerated shift toward electric vehicles
The new reality: An unprecedented supply-demand imbalance
On the supply side, manufacturing capacity has not kept pace with rising demand. Key supplier markets are operating under pressure, with longer lead times and limited ability to expand production quickly.
This is already visible in critical grid components. The IEA reports that procurement now takes two to three years for cables and up to four years for large power transformers, with waiting times for some direct-current cables extending beyond five years. It also notes that average lead times for cables and large transformers have almost doubled since 2021.
The bottleneck is not limited to finished equipment. It also extends into the wider supply chain, including raw materials such as copper, aluminium and grain-oriented electrical steel, as well as specialist manufacturing capability and skilled labour.
For energy buyers, this changes the procurement challenge. In a less constrained market, procurement could focus primarily on price, competitive tension and just-in-time sourcing. In today’s market, those tools are no longer enough. A low-cost tender is of limited value if the supplier cannot deliver within the required project window.
The priority is therefore shifting from buying at the lowest price to securing access to scarce supplier capacity. Cost still matters, but it now must be managed alongside availability, lead time and delivery risk. The buyers most likely to deliver their project pipelines will be those that engage suppliers early, provide credible forward demand and secure capacity before it is allocated.
Why traditional planning falls short
Traditional planning rested on the assumption that capacity will be available when needed, price was the main lever, and that the buyer sets the pace. None of those assumptions hold today.
Most players have strong visibility on their project pipelines. Long-term investments, multi-year capex plans, project portfolios, regulatory commitments are all typically tracked in detail. Yet this internal visibility rarely translates into a clear, actionable signal for the supply base. The information exists; it simply does not travel.
From planning to capacity orchestration
Planning needs to move earlier in the project lifecycle, procurement teams need to connect future project demand with available supplier capacity before that capacity is allocated elsewhere.
This requires three shifts:
-
Horizon
From annual planning cycles to multi-year rolling views that match the lead times of the components that actually constrain delivery.
-
Granularity
From project-by-project demand to aggregated views by category, technology, and geography that suppliers can plan production against.
-
Direction
From internally focused planning to bidirectional dialogue, where demand signals and capacity signals are exchanged continuously.
// From Internal Planning to Capacity Orchestration
Current state – planning as internal process
Future state – planning as market-facing orchestration
Annual cyclesPlanning horizons shorter than component lead times
›
Multi-year rolling viewHorizons match lead times of constrained components
Project-by-projectDemand fragmented; suppliers cannot plan production
›
Aggregated demand signalVolume by category, technology & geography suppliers can act on
Late engagementTender lands after capacity has been allocated
›
Early, structured dialogueCapacity secured before other buyers reach the table
TransactionalNo commitment instruments; no preferred status
›
Commitment instrumentsTake-or-pay, slot reservations, volume commitments
One-way broadcastInternal signals never reach the supply base credibly
›
Bidirectional exchangeDemand signals out, capacity signals in – continuously
Planning gap: In capacity-constrained markets, planning shortcomings stop being inefficiencies and become existential risks to project delivery.
In practice, procurement becomes the bridge between internal project pipelines and the external supply base. Internally, this means working with engineering, project delivery, finance and business units to build a single forward-looking view of demand. Externally, it means understanding which suppliers have capacity available, what is already committed, and where the real bottlenecks sit.
For constrained categories, this also requires different commercial tools. Traditional tenders still have a role, but they may not be enough where capacity is scarce. Buyers may need to use multi-year volume commitments, framework agreements, capacity reservations, early works agreements, take-or-pay arrangements or joint planning forums to give suppliers the confidence to reserve capacity.
The logic is simple: suppliers are more likely to prioritise customers who provide credible, multi-year demand. Buyers gain earlier access to scarce capacity; suppliers gain the visibility they need to plan production, allocate resources or justify investment in additional capacity.
This does not mean sharing everything. Supplier dialogue needs clear legal and commercial boundaries. Buyers can share aggregated demand by category, geography and timeframe, while protecting pricing strategy, supplier comparisons, project-specific sensitivities and IP-sensitive technical data.
The shift is therefore not just better planning. It is a different procurement model: one built around earlier visibility, clearer commitment and structured engagement with the suppliers whose capacity will determine whether energy projects are delivered.
What leading organisations are doing differently
Across Europe, transmission and wind developer organizations are already deploying concrete, replicable practices that go far beyond traditional procurement:
- One European TSO delivering a multi-billion-euro offshore HVDC program has structured its supply base around five-year framework cooperation agreements with two parallel supplier consortia, complemented by early-works agreements that allow detailed engineering, and production capacity reservation, to begin before final contracts are signed.
- A leading offshore wind developer has gone further on the contractual side, locking in turbine capacity through preferred supplier agreements signed up to five years before commissioning, an intermediate instrument that gives suppliers the visibility to plan production while preserving optionality for the buyer before firm orders are placed.
- A major utility group has taken the most vertical step of all: co-investing directly with cable suppliers to convert industrial facilities into new manufacturing capacity for critical components, turning demand commitment itself into the financing instrument that unlocks new industrial supply.
- In the United States, a hyperscale data centre developer structured a 5 GW dedicated transformer supply agreement with a single manufacturer ahead of deployment rather than at the point of need (beginning 2026). The instrument is not a spot purchase; it is a demand signal credible enough for a manufacturer to plan production against.
While the instruments and geography may differ, these moves share the same three enablers that separate the moves that work from those that stall.
Capacity orchestration is framed as a C-level priority, owned by the CEO, COO, or CFO, not as a procurement initiative. Critical supplier relationships are elevated to executive-to-executive dialogues, with senior leaders personally engaging on multi-year commitments and lending the demand signal that the suppliers need to commit capacity in return.
What used to be an annual, project-by-project, internally focused exercise becomes a multi-year, rolling, aggregated view of demand, continuously matched against supplier capacity intelligence, the integrated planning logic described earlier, now embedded in how the organization operates. Consequently, new roles and responsibilities emerge at the Procurement–Supply Chain interface: strategic category leads with multi-year mandates, dedicated capacity planners, and cross-functional capacity councils that bring together Procurement, project delivery, engineering, and finance under a single forum. The organizational structure follows the model, not the other way around.
Leading organizations bring critical suppliers into the conversation years before specifications are frozen, sharing forward-looking demand views, discussing technology roadmaps jointly, and aligning on capacity needs while there is still time for both sides to act. Early involvement is what allows suppliers to plan production, reserve slots, and even commit capex against credible demand, and what allows buyers to influence supplier capacity decisions rather than inheriting whatever the market allocates
// Capacity Orchestration translates into an intregrated planning model along three principles and three layers of execution
Horizon
Multi-year rolling views aligned to component lead times, not annual cycles
+
Granularity
Aggregated by category, technology & geography, not project-by-project
+
Direction
Bidirectional dialogue: demand signals and capacity signals exchanged continuously
Demand View
Capacity & Financials
Supplier Interface
Strategic LevelMulti-year horizon
Business Strategy
- Multi-year investment targets
- Portfolio prioritization
- Pipeline consolidation by BU
Capex envelope by year
- Annual budget bands with contingency
- Capital allocation by category
Forward Demand Signal
- Aggregated view by category shared with the supply base
- Updated at least annually
Tactical Level12 – 24 months
Demand Plan
- Volume by category & spec
- Timings & dependencies
- Aggregated view & constraints
Sourcing & Capacity Plan
- Sourcing strategy
- Supplier assignment
- Slot reservations by category
Capacity Map
- Committed vs. available
- Lead times by category
- Preferred customer status
Execution LevelLive commitments
Commitment instruments
- Multi-year volume commitments
- Capacity reservations
- Take-or-pay arrangements
Tender & contracting
- RfP / framework agreements
- Negotiation & awarding
- Contract formalization & KPIs
Delivery tracking
- Capacity slot monitoring
- Early warning triggers
- Escalation protocols
–
Detail level
+
Procurement
Orchestrator
Orchestrator
Procurement stops running tenders and starts running a market, bridging fragmented internal demand with real supplier capacity across the horizons that matter
Where to start: five moves to begin now
The shift to capacity orchestration is a multi-year transformation, but the first moves are well-defined.
Pinpoint the five to ten components where supplier capacity (not price, not specification) will determine whether projects deliver on time. This list is almost always shorter than organizations assume, and it is where disproportionate management attention belongs. The exercise is not just technical; it requires bringing together project, engineering, and procurement views to distinguish components that are truly capacity-constrained from those that simply feel scarce in the current cycle. Once identified, these bottleneck components should drive everything, from how demand is aggregated, to which suppliers receive executive attention, to where commitment instruments are deployed.
Aggregate demand across projects, business units, and geographies for those critical components. Imperfect visibility shared early beats precise visibility shared late. The goal is not forecasting accuracy, it is a credible signal the supply base can act on. This means rolling horizons in the long-term, volumes by category and geography (not project-by-project lists), and a clear distinction between firm demand, probable demand, and aspirational pipeline. The signal does not need to be perfect, it needs to be honest, regularly refreshed, and consistently communicated. Suppliers reward consistency more than precision.
Distinguish the few suppliers whose capacity is decisive from the many that are substitutable, and design differentiated engagement models accordingly. Not every supplier relationship needs to evolve, but the critical ones must. For strategic suppliers, the engagement model includes executive-to-executive relationships, multi-year visibility, and joint capacity planning. For substitutable suppliers, traditional competitive tendering remains appropriate. The mistake to avoid is treating all suppliers the same, either by over-investing in relationships that do not matter, or by under-investing in the few that determine delivery.
Going deep with current suppliers is necessary but not sufficient. In parallel, activate structured supplier scouting and market intelligence to identify new players with available capacity and genuine interest in entering the market. Equally critical is what happens internally: qualification and homologation processes (often measured in years) are themselves now a binding constraint, frequently more severe than the external market. Streamline approval pathways, run qualification in parallel with scouting rather than sequentially, and treat homologation throughput as a strategic KPI tracked at executive level.
Move conversations with critical suppliers from transactional purchase orders to multi-year capacity commitments, backed by credible demand and, where appropriate, firm volume guarantees, capacity reservations, or take-or-pay arrangements. This is where visibility becomes commitment. These dialogues should be formalized with clear governance, quarterly executive forums, agreed information-sharing protocols and joint risk and scenario reviews, rather than left as informal goodwill between teams.
Conclusion
The organizations that act now will not just secure delivery, they will shape the terms on which the next decade of energy infrastructure gets built. They will become the customers suppliers plan around, the partners regulators trust to deliver, and the players whose project pipelines are credible because their supply chains are. Because in the end, planning is no longer about predicting demand. It is about earning supplier commitment.
Sources
Executive summary – Building the Future Transmission Grid – Analysis – IEA
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