News | May 25, 2007

New €600M Electricity Link To Be Built Between The Netherlands And UK

National Grid and TenneT Holding recently announced their intention to construct a new 260 kilometer (km), 1,000 megawatt electricity interconnector - ‘BritNed' - between the Netherlands and UK. The €600 million joint-venture project will increase diversity of supply and provide greater opportunities for BritNed's customers to participate in European electricity markets. It will also promote competition and contribute to security of supply in both energy markets.

Construction of the interconnector will commence this summer - subject to the relevant regulatory exemptions – and is expected to be commissioned by late 2010. A contract has been awarded to Siemens for the construction of two high voltage direct current (HVDC) converter stations at the Isle of Grain in Kent and Maasvlakte near Rotterdam, and a subsea cable contract awarded to ABB for construction of the HVDC cables, that will be laid beneath the North Sea. Electricity will be able to flow in both directions and will be determined by power prices in the Netherlands and UK.

BritNed will be a commercial/‘non-socialized' interconnector, funded and operated independently from National Grid and TenneT's regulated businesses. Customers will have open access to BritNed's capacity through a combination of ‘implicit' auctions facilitated by APX, and short term 'explicit' auctions. This approach will give customers real choice on how they can bid for capacity. It also ensures BritNed supports the ambitions for greater transparency in the European energy markets.

Mel Kroon, Managing Director of TenneT Holding said: "Integrating electricity markets is the best way to create a strong European market, characterized by transparency, sufficient liquidity and good pricing. The European Commission's goal is a single market, where participants will not face restrictions. BritNed is a significant step towards achieving this goal in north-western Europe."

Both companies have extensive experience in HVDC interconnector projects of this magnitude. TenneT are jointly constructing the 580km link, ‘NorNed', between the Netherlands and Norway. National Grid has jointly operated the French interconnector for over 20 years; the UK's only other electricity interconnector to Continental Europe. In 2006, it also completed construction on the 360km Basslink interconnector between mainland Australia and Tasmania.

Edward Astle, Executive Director at National Grid commented: "We are delighted to be working with TenneT on the BritNed project. This is an important step forward for both countries and the wider European energy market. It also underscores National Grid and TenneT's expertise in building and operating complex subsea interconnectors."

SOURCE: National Grid