June 27, 2016 / 5:19 PM / in 2 years

Norway-England power link to go ahead despite Brexit -Statnett

OSLO (Reuters) - Britain’s decision to leave the European Union will not affect plans to build a subsea power link between Norway and England, Norwegian transmission grid operator Statnett [STASF.UL] said on Monday.

Statnett and Britain’s National Grid agreed last year to build a 1,400-megawatt North Sea Link interconnector by 2021, which would allow Britain to tap into Nordic hydropower resources.

“The outcome of the referendum does not affect the construction of the North Sea Link cable. A withdrawal does not alter the fundamental needs for the cable and the mutual commitments to establish the interconnector,” Statnett said in an email to Reuters.

Britain is experiencing increasingly tight winter power supplies due to plant closures and ageing nuclear plants and to help bridge the supply gap more power links with Europe will be needed.

Interconnectors currently provide around 7 percent of Britain’s peak electricity demand but this could rise to around 20 percent by 2020, according to data compiled by Reuters.

Britain’s decision to leave the EU, however, has called into question whether importing or exporting gas or electricity will require new trade agreements and analysts say the move will almost certainly mean higher energy import costs.

Statnett said it still expected Britain to seek close cooperation with the EU, and it was still not certain whether it would withdraw from EU’s internal energy market.

“If such a solution eventually should be chosen, this could in some cases complicate market integration with the rest of Europe,” Statnett said.

Separately, Gassco, an operator of offshore pipelines transporting Norwegian gas to Britain, said Brexit had no implications on its operations.

Editing by Nina Chestney and Jason Neely

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