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Mittwoch, 12. April 2017

655km Interconnector Cheapest Mechanism to Balance U.K. Market



655km Interconnector Cheapest Mechanism to Balance U.K. Market

Installing a 1,400MW electrical interconnector between the U.K.’s west coast and Norway will allow power traders to arbitrage between the disparate power markets of the
two countries, and “balance out each market internally” at a cheaper cost than batteries or demand response, Vattenfall’s Stefan Dohler said in this interview.
Dohler, chief financial officer of the Swedish utility, told BNEF that the 1.4 billion-euro project is expected to reach financial close in 1Q 2019. The consortium of project partners, which includes Agder Energi, E-Co and Lyse Produksjon, may look
for additional equity investors depending on whether the cable link is approved under the Capen floor framework by the U.K. government in May. The framework would guarantee a minimum income level and hence revenue certainty.
The strong economic fundamentals of the NorthConnect project are likely to assure its continuation despite what happens in the Brexit negotiations, said Dohler. Ministers from
Scotland, the U.K. and Norway are behind the venture because “it would ultimately bring down the overall cost of electricity in all three countries”, he said.
Scandinavia’s hydro-electric storage capacity would complement the U.K.’s energy mix, with its relatively high share of wind and solar generation, because excess U.K. power could be exported when water levels drop, and hydropower also acts as a great energy supply when renewable generation dips in the U.K. market.
This is an extract from an interview published in BNEF's new monthly deals publication: New Energy Deals.
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