* Trade union official says Norway prices could double
* Power prices in Britain, Germany seen lower, more stable
* Norway-Germany cable to run below capacity for 5 years
(Adds quotes, reaction from trade union official)
By Lefteris Karagiannopoulos
OSLO, May 16 Norwegian power prices may rise
0.03-0.04 crown per kilowatt hour (kWh) on average once two
cables to Europe are completed by 2021, the head of Norway's
grid said on Tuesday, suggesting a rise of more than 10 percent
based on current prices.
Statnett is building two 1.4 gigawatt (GW) subsea cables to
Germany and Britain to start up in 2020 and 2021 respectively,
with each cable costing up to 2 billion euros ($2.21 billion).
Trade unions have criticised the project saying higher power
prices will make the Nordic country less attractive for
energy-hungry industries such as aluminium production. One union
official said Norwegian prices could double.
"When we install those two interconnectors, prices in Norway
on average may increase by about three, maybe four oere (NOK
0.03-0.04) per kilowatt hour," Statnett CEO Auke Lont told
Reuters, citing his firm's analysis of the impact on prices.
The Nordic power price was trading at 0.281 crown per kWh on
Tuesday, suggesting the rise after the cables were completed
would be roughly 10 to 14 percent.
Geir Vollsaeter, an adviser at the Industri Energi trade
union, said Lont was underestimating the impact. "Our estimate
is that Norway prices will harmonise with British prices which
are 50 to 100 percent bigger than Norway," he said.
The Statnett CEO said Britain and Germany, which both charge
more for power than Norway, would see lower and more stable
Lont said the North Sea Link cable to Britain was on target
but grid bottlenecks in Germany that have led to price
volatility could mean the NordLink cable initially ran below
capacity. "There will be a five-year transition period," he
The bottlenecks would ease once Germany expanded grid
capacity between the north, where most new renewable wind and
solar power is generated, and the south, where demand is higher.
Lont said this work would be completed by 2025, based on
discussions with German officials.
Norway also needs to boost grid capacity. Nyhamna, a top gas
processing plant on the west coast that relies on grid power, is
raising its capacity by 20 percent to 84 million cubic metres
per day from 2018 as more gas fields come on stream.
Statnett was in talks with Nyhama on roughly doubling power
capacity from 145 megawatts today, Lont said.
The Nordic grid needed strengthening to accommodate the
planned decommissioning of three out of nine of Sweden's
reactors by 2020, he said. Nuclear now accounts for 40 percent
of the Nordics' power generation.
($1 = 8.5024 Norwegian crowns)
($1 = 0.9065 euros)
(Editing by Gwladys Fouche and Edmund Blair)