Ofgem launches consultation on 1.4-GW UK-Norway link

Dec 17, 2014 - UK’s energy regulator Ofgem on Wednesday initiated a consultation on the possible consumer benefits of the planned 1.4-GW North Sea Network (NSN) interconnection between Great Britain and Norway.

The transmission cable will run between Kvilldal in Norway and Blyth in the UK, distributing renewable energy between the two countries. The link will allow the UK to make use of Norway’s hydropower capacity when there is high demand and also to sell wind power to the Scandinavian country at times of local surplus.

Ofgem said in a statement that the NSN project is expected to bring over GBP 3 billion (USD 4.7bn/EUR 3.8bn) in benefits to British consumers over a period of 25 years. These benefits include strengthened competition in the wholesale power market along with lower wholesale prices, more diverse and secure electricity supply and increased access to renewables at a lower cost.

The consultation launched today seeks to clear the case for awarding a cap and floor regulatory regime to the scheme. “We expect to make a decision on the justification for the investment in March next year,” said Dermot Nolan, Ofgem’s CEO.

The plan is for NSN to be operational by 2020 at the latest. Norwegian energy system operator Statnett owns half of this project, with UK electricity and gas utility National Grid Plc (LON:NG) holding the other 50%. Statnett is also the owner of 50% in the 1.4-GW NordLink transmission project between Germany and Norway.

(GBP 1.0 = USD 1.570/EUR 1.260)

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