National Grid and Statnett, which are developing a 1400 MW, ±525 kV HVDC electricity interconnector between the UK and Norway, are reported to be close to agreement on the €2 billion investment, which would create a 700km undersea interconnector, the longest anywhere in the world, from Blyth in Northumberland to Kvilldal in southern Norway.
It would allow the UK to import hydroelectric power, and could be a major factor as it attempts to meet its national and EU renewables targets while boosting its generating capacity.
Auke Lont, chief executive of Statnett, commented that he hoped that a firm decision to build would be made early this year. "The plan is to take a decision on investing in the first quarter," said Mr Lont, "with the hope that it could be in operation by 2020."
The project still requires official sanction from Ofgem, the UK's energy regulator. Ofgem launched a consultation two weeks ago aimed at agreeing an acceptable "cap and floor" regulatory regime for the project, an arrangement that would in effect have UK taxpayers underwriting the project - the government would offer National Grid and Statnett a guaranteed minimum return on the interconnector. However the government would be able to claw back any excess profits if returns from the trading of renewable energy across the North Sea are higher than expected.
Ed Davey, the UK energy secretary, has already signalled his backing for the scheme.
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