Supply Chain Resilience in the Electricity Sector

Why Electricity Supply Chain Resilience Matters

Against the backdrop of the EU’s broader effort to reduce strategic dependencies in critical industries, this paper examines how public procurement can strengthen supply chain resilience in the European electricity sector. It forms part of CERRE’s ongoing research on the various dimensions of energy-system resilience.

In 2023, the Critical Raw Materials Act and the Net-Zero Industry Act introduced parallel measures to secure access to key inputs and expand European manufacturing capacity in strategic clean technologies. Building on these initiatives, the Industrial Accelerator Act is expected to reinforce the role of public demand in supporting European production and reducing exposure to external shocks. Yet while the regulatory toolbox has expanded, procurement practices remain largely price-driven and insufficiently aligned with long-term resilience objectives.

The electricity sector represents a critical test case. Grid expansion, digitalisation, renewable deployment and electrification depend on complex, globally interconnected supply chains exposed to geopolitical concentration, export controls, cyber risks and production bottlenecks. Diversification is widely recognised as one of the most effective levers to mitigate these risks. In practice, however, diversification is often costly or structurally constrained, as many clean technologies and critical inputs are concentrated in a limited number of countries or suppliers. Without coordinated intervention, contracting authorities may continue to prioritise short-term savings over long-term resilience.

Leveraging Public Procurement for Supply Chain Resilience

The paper argues that public procurement constitutes a central, yet insufficiently structured, instrument for addressing these challenges at the buyer and the contractor level. In view of the upcoming revision of the EU’s public procurement framework, it analyses how procurement rules and public demand can be redesigned to correct structural incentives and embed resilience considerations more systematically. In particular, it examines how procurement frameworks could operationalise:

• Diversification and multi-sourcing strategies, including contract division into lots, while carefully balancing competition risks and the potential for collusion;
• Targeted “Buy European” approaches, tailored to highly concentrated strategic technologies and designed to remain compatible with international trade obligations;
• Public Procurement of Innovation (PPI) and collaborative procurement, to achieve scale, pool expertise and prevent uncoordinated purchasing from aggravating supply bottlenecks;
• National security screening mechanisms adapted to procurement, enabling the assessment of security risks without removing contracts from the scope of EU procurement law.

A Framework for Measuring and Implementing Resilience in Public Procurement

Beyond procedural design, the paper proposes a structured framework for measuring and implementing supply chain resilience within procurement procedures. It discusses resilience indicators, such as supplier diversification, geopolitical exposure, stockpiling capacity and stress-test performance, and analyses how these can be integrated into selection and award criteria. It further examines how resilience assessments could be centralised through a specialised measurement and certification body, issuing structured resilience ratings that reduce administrative burdens while limiting duplication and free-riding. Particular emphasis is placed on stress tests as ex ante tools to simulate geopolitical or market shocks and to incentivise firms to strengthen their upstream supply chains before disruptions occur.