U.K.-Denmark Power Cable May Spur ‘Crucial’ Supergrid, Dong Says
Dong Energy A/S, the world’s largest operator of offshore wind farms, said a proposed power cable connecting the U.K. and Denmark may encourage the development of a Europe-wide supergrid ``crucial'' to meeting renewable targets.
Building the link would be a step in developing a network connecting nations and offshore wind farms,Anders Eldrup, Dong Energy’s chief executive officer, said yesterday. This would help minimize the risk to supply from variations in wind.
The European Commission, the European Union’s executive arm, is trying to spur development of a power grid covering the 27-nation bloc as it aims to get 20 percent of its energy from renewable sources. The plan is to establish more electricity links between countries, connect offshore turbines to prevent blackouts when the wind doesn’t blow and allow utilities and traders to move power from one market to another more easily.
“The supergrid is crucial if you have the vision that in the future the North Sea will be the powerhouse of northern Europe,” Eldrup said in an interview before officially opening Dong Energy’s first U.K. power station, a plant fueled by natural gas. “Developing this simultaneously as we develop all the offshore parks is a big task, a very costly thing, but absolutely necessary. We have to start the preparations.”
Eldrup said he suggested “a few weeks” ago to U.K. Prime Minister David Cameron to connect Britain and Denmark.
“We could start off small-scale, building a grid from the U.K. to Denmark, and that could be one of the legs of this future supergrid system,” he said.
London Array
Skaerbaek, Denmark-based Dong Energy, the country’s biggest utility, plans to start producing electricity from its 1,000- megawatt London Array wind project next year, he said. The project is being developed along with E.ON AG, Germany’s biggest utility, and Masdar, the Abu Dhabi government-backed renewable energy company.
Britain is connected via a 2,000-megawatt cable to France and a 1,000-megawatt link to the Netherlands. More cables can bring more trading to the market as utilities, banks and hedge funds can profit from trading between the countries.
Scottish & Southern Energy Plc is working with Norway’s Adger Energi AS, E-Co Energi AS and Lyse Energi AS as well as Sweden’s Vattenfall AB, to study the feasibility of a power link between Scotland and Norway, the Scottish Government said Feb. 1. National Grid Plc and Statnett SF, the grid operators of Britain and Norway, are also exploring linking the two nations.
In an effort to boost competition Ofgem, Britain’s energy regulator said last year it was concerned with the insufficient trading of future electricity contracts. While the U.K. government wants to reshape the market to attract investment to replace aging power stations and cut carbon dioxide emissions.
The U.K. hasn’t created a liquid power market, as it has done for natural gas, Eldrup said. “There should be a more liquid power market” he said. “We can bring more competition, we are the newcomer in the British market and I think it would be healthy with more competition. In order to obtain that we need a more liquid market.”
To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net.
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net.
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