New cable to link UK and Dutch power grids

ISLE OF GRAIN (Reuters) - Power grid operator National Grid NG.L and its Dutch counterpart TenneT are to build a 1,000-megawatt link between the two country's networks, the partners said on Tuesday.

The roughly 600 million-euro (409 million-pound) interconnection, named BritNet, will be only the second link between Britain’s electricity network and continental Europe. It will help to ensure security of supply and promote competition, executives from the project told reporters.

“We believe (it is) a landmark project for Europe,” said Mathew Rose, leader of BritNed.

“Security of supply will increase in both countries,” Mel Kroon, managing director of TenneT, said. “It will stabilise prices in both areas and lead to increased competition in both.”

Construction is expected to start this year and the 50/50 BritNed joint venture project is expected to start operating in the second half of 2010.

The 580-kilometre link, first mooted in 2002, will be made up of two parallel cables, buried two to three metres below the sea-bed.

BritNed executives said that if necessary the link could increase capacity by up to 20 percent above 1,000 megawatts, but that this could not be sustained.

A 2,000-megawatt line already links Britain to France, allowing the two countries to buy or sell power to each other when convenient.

Long-term capacity in the BritNed link will be auctioned in the same way as it is for the British-French connection.

In addition, daily capacity will be auctioned by the Anglo-Dutch APX Group, which operates electricity and gas markets in both countries.

Executives said they were still waiting for full regulatory approval, but they had got verbal approval from the Dutch and UK regulators.

The contract for the subsea cables has been awarded to Swiss-listed ABB Ltd ABBN.VX and Germany's Siemens SIEGn.DE is going to build two current converter stations, one in Isle of Grain and one in Maasvlakte, near Rotterdam.