(Adds quotes, background, detail)
By Nerijus Adomaitis
OSLO Dec 19 NorthConnect, owned by three
Norwegian power firms and Sweden's Vattenfall, will
seek permission to build a power link from Norway to Britain
costing up to 2 billion euros ($2.09 billion), its chairman Odd
Oeygarden told Reuters.
An application will be submitted to Norway's energy market
regulator, NVE, and a second one to the oil and energy ministry,
either by the end of 2016 or in January, he said.
Britain faces an energy supply crunch by the early 2020s as
coal-fired power stations close and its oil and gas production
declines, and building interconnectors could help fill the
With a capacity of 1.4 gigawatt (GW), NorthConnect's
650-kilometre subsea cable could meet about a quarter of
Scotland's peak demand with power from Norwegian hydroelectric
dams and wind turbines.
The project partners plan to make a final investment
decision in 2019, if the licensing process goes smoothly, and
aim to have the cable in operation by 2022 or 2023, NorthConnect
Chief Executive Tommy Loevstad said.
Norway's state-owned transmission grid operator
Statnett and the UK's National Grid have
already agreed to build a first power interconnector between the
two countries by 2021.
"We are planning to submit to the authorities two
applications for construction and foreign trade licenses,"
NorthConnect's Oeygarden said.
The application became possible after Norway's parliament in
October lifted a ban on building private
NorthConnect in June received a license from British energy
market regulator Ofgem to operate the cable, but must still
obtain a separate building permit.
The project owners include Norway's third-largest power
company Agder Energi, partly owned by Norwegian
Statkraft, as well as Oslo city-owned E-Co Energi
and power company Lyse.
Launched in 2011, NorthConnect initially included a
subsidiary of Scottish and Southern Energy, which pulled
out after Norway imposed a ban on private cables in 2013.
The Nordic firms may seek another partner in Britain to
share the interconnector's costs, estimated at about 1.5 billion
to 2 billion euros, Oeygarden said.
While parliament has lifted the ban, the project has been
criticized by Norwegian trade unions, which fear that more
exports would lead to higher power prices at home, and even from
the country's competition authority.
Norway's Norsk Hydro, one of the world's largest
aluminium producers, said it was concerned about the impact of
higher prices on its competitiveness as electricity represents
nearly half its production cost.
Norway's Oil and Energy Minister Tord Lien said last January
the country should not rush to approve new cables.
The opposition Labour party said it could impose a new ban
if it were to win a general election in September 2017.
($1 = 0.9574 euros)
(Editing by Terje Solsvik and Susan Thomas)