NorGer to Seek Ministry Approval for $1.48 Billion, 580-Kilometer Undersea Cable Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--NorGer AS (Kristiansand, Norway) recently announced that it would submit an application in the next couple of weeks seeking permission from the Norwegian Ministry of Petroleum and Energy to import and export electricity through a 580-kilometer power cable with a capacity of 1,400 megawatts (MW) between Wilhelmshaven, Germany, and the village of Feda, near Flekkefjord, Norway. The power cable is expected to come into operation in 2013 or 2014 at the earliest if an investment decision to proceed with the project is arrived at by 2010. Experts estimate that the $1.48 billion project would be able to meet the entire power requirements of Oslo.

The Norway-Germany subsea power cable project was first conceived in December 2006 by a group of four Norwegian, German and Swiss power firms. Norwegian power companies Agder Energi AS (Agder) and Lyse Produksjon AS (Stavanger), Swiss energy trading firm Elektrizitats-Gesellschaft Laufenburg AG (SWF:EGL) (Zurich), and German power company Energieversorgung Weser-Ems AG (Oldenburg, Germany) joined together to lay a 570-kilometer subsea power cable with a capacity of 700 MW to 1,400 MW and voltage levels of 450 kilovolts (kV) to 500 kV. Based on initial technical feasibility analyses, the firms decided to set up a high-voltage direct current cable between the two mainland regions via the North Sea with converter stations at each end to enable conversion of direct current to alternating current and vice versa. The four partners had jointly established NorGer AS for implementation of the project, which was slated to commence operations in 2011. The cost of the project was then estimated at $630 million.

The NorGer project aims to connect two regions that rely on fundamentally different sources of power generation. Almost 100% of the power generated in Norway comes from hydropower plants that are susceptible to seasonal variations. Germany's power generation portfolio is a mix of thermal and nuclear power that is being complemented by an increasing share of wind power. The project will leverage Norway's hydropower resources and Germany's wind power resources to equalize seasonal variations and strengthen the power balance in the two regions with predominant focus on power generation from renewable sources.

NorGer also envisages connecting Nord Pool, the Nordic Power Exchange, and Germany's European Energy Exchange to promote intraday trade and the exchange of system services. The project will provide several benefits such as increased competition in the power sector, reduction in emission levels of greenhouse gases by eliminating dependence on Germany's coal-fired and gas-fired power plants, revenue generation through short-term power trade between the two countries, and the provision of system services to aid the rapidly growing wind power generation sector.

Almost 99% of Norway's power generation is based on renewable resources that also account for 60% of the country's overall energy portfolio. While Norway is a net exporter of electricity with surplus power generation of 2 terawatt-hours (TWh) per year, the country relies on electricity imports from Denmark and Sweden to compensate for shortfall in domestic generation by hydropower plants during dry years. According to statistics from the U.S. Energy Information Administration, Norway generated 108.9 TWh of electricity, including 107.7 TWh of hydropower, and consumed 112.8 TWh of electricity in 2004.

Norway intends to increase spending on green-energy initiatives by 80% this year. The Research Council of Norway recently announced plans to set up eight national research centers in the country, each to be provided with a grant of $2.89 million over the next five years, to investigate the use of renewable sources of energy such as bioenergy, solar power, wind, and energy-efficient technologies such as carboncapture and storage and zero-energy housing.

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