Prysmian Pushes Innovation Forward: The New EGL2 Connection Revolutionizes Energy Transmission

Prysmian Pushes Innovation Forward: The New EGL2 Connection Revolutionizes Energy Transmission
Prysmian

In a momentous stride towards a greener future, the Italian conglomerate Prysmian Group, helmed by the astute CEO Valerio Battista, has sealed a groundbreaking deal with Eastern Green Link 2 Limited. This deal, valued at a hefty €1.9 billion, is poised to channel clean energy directly into the homes of two million British households. It’s a significant leap for the electricity and transmission infrastructure sector within the United Kingdom’s shores.

Prysmian’s momentous task is to supply a state-of-the-art high voltage direct current cable system for the ambitious Eastern Green Link 2 (EGL2) project. This initiative is set to forge a vital connection between Scotland and England. The completion of this link heralds a new era, unlocking Scotland’s bountiful renewable energy resources and markedly bolstering the UK’s capacity to deliver clean energy on a grand scale.

The journey to this landmark contract began with Prysmian emerging as the preferred bidder in May 2023, testament to the company’s reputation and technical prowess. A formal commitment followed in June 2023, showcasing a steadfast commitment to the project’s resource needs. The future holds promise, with the new link scheduled to surge to life in 2029, marking a significant milestone in the UK’s pursuit of its ambitious energy objectives.

The EGL2 project doesn’t just push the envelope—it redefines it, employing a 525 kV high voltage direct current cable system that is the epitome of modern technology. Prysmian’s role extends far beyond mere supply; the company will lead the charge in the development, manufacturing, installation, testing, and commissioning of this pioneering system. Boasting a transmission potential of 2 GW, the system ensures a steady and robust stream of energy coursing between the two nations.

The industry’s response to the agreement has been characterized by waves of positive sentiment. Analysts are lauding the order’s capacity to significantly elevate Prysmian’s order portfolio. Banca Akros, in particular, has underscored the contract’s magnitude, forecasting that the project will yield margins that soar well above the norm. Prysmian’s already formidable order book has been bolstered by this addition, now cumulatively valued at an approximate €7.85 billion.

Equita Sim has also chimed in with its perspective, spotlighting the pivotal role of Prysmian’s Projects division as a substantial contributor to the group’s adjusted EBITDA. This, they assert, will fuel the company’s growth trajectory. Holding firm with a price/earnings multiple of 16 times, Equita Sim has renewed its hold rating for Prysmian, setting a target price at a robust 42.5 euros.

In essence, the pact between Prysmian and Eastern Green Link 2 Limited transcends the mere supply of clean energy. It embodies a monumental advance in the UK’s energy infrastructure. This alliance not only paves the way for a surge in sustainable energy sources but also signals a strategic retreat from the reliance on fossil fuels. The economic implications are vast, with potential ripples across the energy sector, propelling Prysmian to the forefront as a harbinger of an ecologically sound and economically vibrant future.