Proposed EU Rules May Cause Power Trading Halt, Nordic Grids Say

Nordic grid operators say the European Union’s plans to raise contributions to its infrastructure fund may restrict or paralyse cross-border power trading.

“The proposal will cut cross-border trading, and may thwart it completely in the worst case,” adding costs of between 30 and 40 kroner ($5.3 to $7.1) to each megawatt-hour of electricity that Norway imports or exports, Bente Hagem, executive vice president at Norway’s grid operator, Statnett SF, said today by e-mail from Oslo.

The European Agency for the Cooperation of Energy Regulators, known as ACER, has suggested the bloc’s fund should be boosted as much as 16-fold to 1.6 billion euros ($2.1 billion), so that transmission system operators would receive more compensation for costs of hosting cross-border flows.

Together with Statnett, Nordic grid companies Svenska Kraftnaet AB, Fingrid Oyj and Energinet.dk oppose the EU proposal, saying it would deter electricity trade and infrastructure investments, in a joint letter sent to ACER, dated Nov 26., seen by Bloomberg.

The EU needs to boost cross-border power shipments and build new international links so that countries with excess hydropower, solar and wind production can ship their surpluses to countries where demand is high. This would boost energy security and pave the way for more renewable energy penetration, according to the European commission.

Under ACER’s proposal, Statnett, which now contributes 100 million kroner a year to the EU’s fund, would see costs increase six- or eight-fold, deterring Norway from building planned electricity cables to Germany and the U.K., according to the company.

Norway is considering three cross-border links of 1,400 megawatts each to help export power surpluses that the country is unable to absorb.

ACER may present its recommendations for legislative action to the EU Commission by March.

To contact the reporter on this story: Torsten Fagerholm in Helsinki at tfagerholm@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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