Norwegian power grid operator Statnett, KfW IPEX-Bank and TenneT TSO GmbH signed an agreement to develop and construct a subsea cable between Germany and Norway.
The high-voltage direct-current interconnector will enable renewable energy to flow between Germany and Norway and help improve the distribution of offshore wind power between the two nations. The cable is expected to be complete by late 2018.
With this cable, wind energy and solar power can be exported from Germany to Norway when there is a surplus, while Norway can export hydropower to Germany when the sun does not shine and the wind does not blow.
The integration of the Norwegian and German electricity markets, which are not currently connected, will also ensure greater grid stability in the two countries, increase market efficiency and stabilize prices between seasons, TenneT says.
The interconnector project represents an investment of as much as $2.6 billion. The three-party agreement provides for a 50:50 partnership between Norway and Germany. Norway's state-owned Statnett will own 50 percent of the project. On the German side, KfW and TenneT will jointly own 50 percent of the project via a newly established project company.