Dutch grid operator TenneT (IPO-TTH.AS) said on Monday that it had signed a framework agreement worth 1.9 billion euros ($2 billion) for the supply of 110 compensation coils and 160 power transformers for Germany and the Netherlands.

The agreement, which has a minimum term of two years and offers the possibility to extend the contract up to five times for a year at a time, was signed together with suppliers Siemens Energy (ENR1n.DE) , Hitachi (6501.T) , GE and SGB-SMIT, said TenneT.

The four suppliers receive an equal share of the contract volume, TenneT said, equating to around 475 million euros each.

The award marks the latest by TenneT, Germany's biggest high-voltage grid operator, to upgrade power lines and prepare them for linking thousands of wind turbines and solar panels.

"The energy transition requires a complete system overhaul, not only with new power lines but also with state-of-the-art substations," TenneT Chief Operating Officer Tim Meyerjuergens said.

"To enable the integration of renewable energies into the transmission grid via the distribution grid, we need a significant number of new high-performance transformers."

Of the total, 1.16 billion euros is for German substations and 730 million euros is for those in the Netherlands, said TenneT, adding that each supplier was awarded about a quarter of the total volume.