Hopes dashed on wind-hydro link

GERMANY/NORWAY: Hopes have been dashed for the swift completion of a first subsea interconnector electricity transmission cable between Germany and Norway's hydro capacity to optimise the use of Germany's major wind-turbine fleet at times of high winds and low power demand. The Norger link would allow fluctuations in German wind-energy generation to be compensated with hydro-generated power, which dominates the Norwegian electricity market.

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Instead of the planned 2015 commissioning date, the connection will not be in place for at least another few years. Plans for a similar North Sea link with Britain, which were less advanced, could now be realised first - in 2018 - pushing the Germany link back to 2021, according to Norwegian transmission system operator Statnett. Regulatory issues have hindered the project.

Statnett announced the setback to the 1.4GW Norger cable project on 18 August. "New analyses show that extensive grid upgrades are necessary before any further international connectors can be put into operation," it said. Upgrade work in southern Norway would be "a large and extensive project and will be spread over a longer period to ensure stable system operations during the construction period", it added. Plans for integrating Norway's hydro-dominated electricity system into a North Sea offshore wind grid are also now probably several years away.

No role for hydro

Norwegian hydro power will be unable to play a role in the proposed North Sea offshore grid until grid capacity in southern Norway has been expanded. Since bilateral projects like Norger, Nordlink and Skagerrak 4 will almost certainly have priority, North Sea offshore wind grid links are now unlikely to be feasible until after 2021.

After the announcement, Swiss energy trader EGL lost no time in selling its 16.67% interest in Norger to majority stakeholder Statnett, followed by the other minority shareholders, Norwegian energy companies Adger Energie and Lyse Energie.

EGL spokeswoman Lilly Frei said one reason for its divestment was the long delay before commissioning, which makes the project unattractive — although the company continues to see Norger as an ideal corridor between Germany and Norway.

But the main reason was developments in the regulatory environment. The German regulator Bundesnetzagentur granted Norger exemption from regulation in November 2010, highlighting the role it could play in the integration of renewable energies including wind into the electricity market. Regulatory exemption for Norger would have waived a number of obligations including the duty to gra nt third parties non-discriminatory access to the transmission capacity, acceptance of a cap on transmission tariff charged and the requirement to invest to maintain or increase interconnection capacities.

But the European Commission rejected the exemption last spring, followed by the Norwegian regulatory authority, said Frei. "The regulatory model for interconnectors is not of interest to non-transmission system operators like us," she explained.

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