OSLO, Jan 5 (Reuters) - Norway’s grid operator Statnett plans to make a final investment decision in the first quarter on a 1.5-2 billion euro ($1.8- $2.48 bln) project to build the world’s longest subsea cable to Britain that will secure power supplies in both countries.
The Norwegian government gave state-owned Statnett the green light for the project in October and the plan is to have the 700-km long (435 mile) cable across the North Sea by 2020.
“We plan to take the final investment decision jointly with (Britain’s) National Grid in the first quarter,” Statnett spokesman Christer Gilje said on Monday.
“We can’t be more precise, because that depends on when we finish negotiations with contractors...and when we get answers on regulations in the UK.”
The cable would significantly boost energy security in both countries. Britain would be able to import power from Norway to balance its wind and solar generation, while hydropower-dependent Norway could import power from Britain during dry years.
Questions still remain about British regulations, which would affect the cable’s profitability.
This includes decisions on the so-called “cap and floor” regime, which guarantees returns in an agreed range, and how the 1,400-megawatt cable could be included in the capacity market, Gilje said.
Britain’s energy market regulator Ofgem launched a consultation last month on the “cap and floor” regime for the cable and a decision is expected in March.
A spokesman at Ofgem said he could not immediately comment on the capacity market aspect of the plan.
“The plan is to get to the next phase quickly, so that the project can start as soon as we make the final investment decision,” Gilje said.
Norway also plans to build a second cable with the same capacity to Germany by 2018. The longest subsea power cable currently in operation is the 580-km NorNed cable from Norway to the Netherlands, which Statnett took part in building as well. $1 = 0.8393 euros) (Reporting by Nerijus Adomaitis, additional reporting by Sarah McFarlane in London; editing by Susan Thomas)