EC smashes wind HV cable 'cartel'

Many of the world’s biggest producers of high-voltage power cables have been slapped with fines totalling €302m ($416m) for operating a cartel that illegally rigged supplies to the offshore wind market – a plan the European Commission (EC) claimed investment giant Goldman Sachs also shares liability for.

The EC said the cartel involved 11 producers of underground and submarine cables and operated for almost a decade from 1999. Six are from Europe, three from Japan and two from Korea.

“Part of this plan was to allocate important high voltage power cable projects in the European Economic Area (EEA), including large infrastructure and renewable energy projects such as offshore wind farms.”

Under the arrangement, cable producers in Europe and Asia agreed to “stay out of each other's home territories and most of the rest of the world would be divided amongst them”, the EC said.

Announcing the fines today, the EC said: “These companies shared markets and allocated customers between themselves on an almost worldwide scale.

"These companies knew very well that what they were doing was illegal. This is why they acted cautiously and with great secrecy.”

The list of companies named as involved by the EC is a roll-call of the global cable sector. They could appeal the decision.

It lists: “ABB, Nexans, Prysmian (previously Pirelli), J-Power Systems (previously Sumitomo Electric and Hitachi Metals), VISCAS (previously Furukawa Electric and Fujikura), EXSYM (previously SWCC Showa and Mitsubishi Cable), Brugg, NKT, Silec (previously Safran), LS Cable and Taihan.”

Goldman Sachs is also held responsible, according to the EC, because of its status as the former owner of cable firm Prysmian.

The EC said ABB was let off a €33m fine as it was the first to come to the Commission with details of the cartel.

Its statement said: “Whenever Japanese and Korean companies received requests from European customers, they would notify their European counterparts and decline to bid.

“In order to allocate projects successfully, the cartelists also agreed on price levels to be applied or exchanged information on price offers to ensure that the designated power cable supplier or 'allottee' would bid the lowest price while the other companies would submit a higher offer, refrain from bidding or submit an offer that was unattractive to the customer.”

According to the Brussels competition authorities, the cartel involved meetings in "hotels in Southeast Asia and Europe".

The roughly 1999-2009 period covered by the cartel set out by the EC would take in many of the early project builds in the European offshore wind sector.

As reports by Recharge from around the end of the period show, a constrained cable supply chain had emerged as one of the sector's major headaches.

Larger individual fines levied by the EC include:

Prysmian: €104.6m, of which €37.3m is jointly and severally liable with Goldman Sachs.

Nexans: €70.6m

VISCAS (jointly and severally liable with Furukawa and Fujikura) €35m.

LS Cable: €11.3m