LONDON May 15 Britain and Norway agreed on Wednesday to continue work on a project to link up their electricity grids by 2020 with what would be the world's longest subsea power cable, giving Britain access to Norway's vast reserves of carbon-free hydropower.
Britain's National Grid and its Norwegian counterpart Statnett said they would continue to cooperate on the two-way 1,400 megawatt power link but are not likely to make an investment decision until next year for a project expected to cost 1.5 billion to 2 billion euros ($1.95-2.6 billion).
"This agreement is important for us to take the project further. We are now ready to submit the interconnector licence application to the Norwegian Ministry of Petroleum and Energy. Together these events represent a key milestone for the project," said Auke Lont, Statnett's chief executive in a joint statement.
The companies said the link would contribute to further integration of the north European power markets and encourage the supply and consumption of power generated from renewable sources, thereby helping countries reach EU targets for 2020.
While most of the Scandinavian country's power supply comes from hydroelectricity, coal accounts for up to 40 percent of Britain's energy mix, and around 30 percent from gas with the remainder of Britain's electricity coming from nuclear and renewable sources.
Britain already imports around 40 percent of its gas from Norway through North Sea pipelines.
Britain can already import electrical power from France, Ireland and the Netherlands and has plans to build a link with Belgium. National Grid is also looking at the feasibility of making connections with Denmark and Iceland.
National Grid and Statnett were given environmental permits for a connector back in 2003 but failed that time to agree on how to finance the project.