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AMSTERDAM (Reuters) - Dutch power grid operator TenneT said on Wednesday it had found the first partner for its plan to create an offshore energy hub in the North Sea, Danish power transmission company Energinet.dk.
TenneT's plan, first announced in June, involves the construction of one or more artificial islands around Dogger Bank, roughly at the centre of the North Sea between Denmark, Germany, Britain, Norway and Belgium, with connections to each.
As the capacity of North Sea offshore wind farms grows, having a central hub will make it easier to apportion the low-carbon power to European nations as needed, and ultimately help the EU meet targets for cuts in emissions, the company says.
TenneT will formally sign a deal with Energinet on March 23.
"Discussions with other potential partners are ongoing, which not only include other North Sea transmission system operators, but also other infrastructure companies," TenneT said in a statement.
Energinet.dk CEO Peder Østermark Andreasen said the project has the potential to lead to a "further reduction in prices of grid connections and interconnections."
Separately on Wednesday, TenneT said it would invest 25 billion euros in new transmission capacity over the coming decade to support a number of offshore wind and onshore renewable projects currently in the pipeline, as well as to improve interconnections between the Netherlands and Germany.
The amount is an increase from the 22 billion euros in a March 2016 forecast, after the Dutch government announced plans last autumn for a major acceleration in funding for renewable energy projects, including permitting 5 gigawatts of new offshore turbine farms..
TenneT will provide infrastructure for the new farms.
"If we want to exploit all this green electricity in our Northwest European region to the full, we cannot do so without new power transmission links, both onshore and offshore," CEO Mel Kroon said in a statement.
"The ongoing coupling of the European energy markets will lead to more convergence of electricity prices in the various European countries, and will make electricity more affordable for end users," he said.
TenneT reported 2016 underlying operating profit of 701 million euros on revenue of 3.23 billion euros ($3.41 billion), both down slightly from 2015, due to lower reimbursements for its services.
Reporting by Toby Sterling; writing by Nina Chestney; editing by David Clarke and David Evans