Norway-U.K. Power Cable Investors Contest Private-Owner Ban

Vattenfall AB and E-CO Energi AS are among investors contesting a ban by Norway on private ownership of cross-border electricity cables, jeopardizing the firms’ planned power link with the U.K.

Norway adopted a law on June 7 that guarantees state-owned grid operator Statnett SF exclusive or majority control of all power links abroad, according to the minutes of a government vote posted on its website. The rule effectively bans privately owned, or merchant, cables.

The law may thwart the 1,400-megawatt Northconnect cable which would connect Norway to the U.K. by 2020, a project financed by utilities including Sweden’s Vattenfall, Norway’s E-CO Energi, Agder Energi AS and Lyse Energi AS. The country’s ban may breach European Free Trade Association, or EFTA, rules, according to Northconnect.

“We will start preparing our case, and will make a decision how to proceed with the court appeal in August,” Odd Oeygarden, chairman of the Northconnect owners group, said today by telephone from Kristiansand, Norway. “We’ll lodge a complaint with the EFTA surveillance authority to defend our planned cable.”

Norway’s petroleum and energy ministry had no immediate comment on Northconnect’s challenge, Jon Evang, a spokesman at the ministry, said today by phone from Oslo.

Energy Security

The country’s power-cable law is designed to improve energy security and make the electricity grid more efficient, according to the government. Statnett and the U.K.’s National Grid Plc are planning their own link to allow Norway to export excess hydropower, according to the Norwegian grid operator.

The proposal has been open for public consultation since September and has drawn criticism from Northconnect, power industry association Energy Norway and opposition political parties.

Nordic power prices for delivery in the three months through September declined 3.3% to 33 euros a megawatt-hour, the lowest since Nov. 21, according to Nasdaq OMX Group’s energy exchange in Oslo.

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