UPDATE 2-UK power firm SSE pulls out of UK-Norway cable project

Tue Mar 5, 2013 8:45am EST

* Lack of interconnector regulation added to decision

* Developers not seeking new partners for now

* Nat Grid, Statnett Norway cable going ahead as planned

LONDON, March 5 (Reuters) - British power utility SSE has dropped out of a project to run a 1,400-megawatt interconnector cable between Britain and Norway and would focus on investing in its core markets instead, the company said on Tuesday.

"SSE has today announced that it will no longer have a financial involvement in the NorthConnect project," the utility said in a statement.

It said it wanted to focus on its markets in Britain and Ireland instead, where it plans to invest in power generation and distribution and added that a lack of clarity on interconnector regulation contributed to its decision against the cable project.

Other members of the project, Sweden's Vattenfall and Norwegian companies E-CO Energi, Agder Energi and Lyse, said they were not seeking a replacement partner but remained fully committed to installing the NorthConnect cable, which is expected to go live in 2020.

SSE had a 25 percent stake in the project.

"For the time being, we will not look for new partners," said Christian Altmann, a spokesman for Agder Energi.

A second project for a 1,400 MW interconnector between Britain and Norway, led by the countries' network operators National Grid and Statnett, was continuing as planned, the developers said on Tuesday.

The British government is counting on the construction of further interconnectors to help the country meet future electricity demand.

Britain is already connected to France, Ireland and the Netherlands and is assessing other links to Belgium and Denmark.

SSE also said it plans to make an announcement in the coming weeks on selling its Swedish interests, which includes 295 MW of projects in development.

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