Norway’s state-owned electricity grid operator, Statnett, has applied to the Petroleum and Energy ministry for a licence to install a 1200 MW power cable under the North Sea to the UK, to come on line in 2007, and to launch trading with the UK market. Statnett wants the $1.15 billion (8 billion kroner) link to help reduce the impact of fluctuations in rainfall on Norway’s power system, which is dependent largely on hydro-power.

The 750 km long North Sea Interconnector, which when completed will be the world’s longest, is a joint venture with the UK grid operator National Grid Transco. Statnett and NGT will share the costs. Several of the world’s leading cable manufacturers will produce the cable over a period of four years, with the Nexans factory in Halden, Norway, among the suppliers.

The interconnector will be made up of two parallel cables linking Suldal in Norway to Easington, Durham, on the English coast. It will be able to transmit power in both directions and will be capable of carrying around 10 per cent of the power available in Norway in low production years.

The cable will make it possible to import power into Norway in dry years, and export it in particularly wet years. In any case the cable will allow the export of power to the UK during the day and its import at night, taking advantage of the price differential to generate what Statnetts expect to be major revenues. “A cable to the UK will not significantly affect the need to build additional generation capacity in Norway,” says Statnett’s board chairman Grete Faremo. But independent analyses have shown that the cable would reduce the major power price hikes characteristic of Nordic power markets, and the likelihood of rationing during dry years.

The cost of the link will be met largely by usage fees, but a portion would be offset by a “modest” increase, forecast to be no more than Kr0.002/kWh, in the country’s central grid fee. If the licence is granted and what are described as ‘other issues’ are resolved the final decision on investment will be made in the autumn.