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Utilities Rethink Supplier Strategy as Grid Equipment Procurement Process Becomes More Complicated

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Utilities Tech Outlook | Thursday, July 02, 2026

High voltage power equipment purchase was seen mostly as a technical process based on specification and cost comparison. Recent purchasing experience indicates a trend towards a new attitude to purchasing. Utilities start to pay more attention to the relations with suppliers and production capacities of the manufacturers as equipment availability becomes less dependable.

High voltage power grid projects are always long-term projects which are lasting from one to several years. Purchasers are starting to analyze the ability of manufacturers to support such long-term projects and to guarantee their production capacity under changing market situation.

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It makes the competition for manufacturers much different from what it used to be before. Technical characteristics of equipment remain important, but purchasers start to take into account the qualities of communication between buyers and sellers and production transparency. Information about the schedule and backlog of the manufacturer become influential factors in supplier selection.

The trend impacts purchasing practices. Diversification of the supplier base and decrease of dependence on a particular manufacturer in big transmission projects become a preferable strategy for many utilities. In addition, long-term relationships with manufacturers which give access to the information about their production capacity in the future get more attention.

Engineers who work on transmission projects are not unaffected by the situation too. Purchases of the equipment can not be seen anymore as independent operations which are done after the design process is finished. Supply issues start to affect project schedules and engineering decisions which are made at preliminary stage of development.

There are strategic problems for the manufacturers too. Big orders increase the revenue pipeline, but also create additional pressure on the production and customer expectations. The companies have to balance the commitment to future supply against possible delays.

One more result of changes in purchasing is the increased importance of procurement discipline. Utilities start to ask many details about the process of manufacturing, capacity of factories and delivery dates. Evaluation of the supplier starts to be a more complicated process than just analyzing technical characteristics of the equipment.

The changes in purchasing process can have impact on competitive dynamics in the industry. Manufacturer which explains its production constraints can be more attractive to the buyer even if the delivery date will be longer than desirable. The predictability of supply becomes a critical purchasing factor due to limited time of infrastructure projects.

Procurement function inside the utilities is likely to get more influence in future transmission investments. Purchases of high voltage equipment are becoming the part of risk management and strategic decision making. For the manufacturers commercial relationship can depend on mutual trust and schedule transparency at least as much as on the equipment itself.

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