* Developers decide on Nord.Link route as priority
* Hold on to developing NorGer as second route later
* Part of power market convergence, integration of renewables
FRANKFURT, March 5 The first route for an undersea power cable bringing Norwegian hydro-electricity to continental Europe by 2018 will land in the north German state of Schleswig-Holstein, project leaders said.
The Nord.Link line being built by power grid operator TenneT , Norwegian counterpart Statnett and German state development bank KfW is the first of two planned cables under the North Sea and feeds into a vision for a harmonised European energy market.
"Transmission system operator TenneT, Norwegian counterpart Statnett and KfW have decided to prioritise the Nord.Link connection as a first of two planned power cable links...," a statement issued by the three stakeholders said on Wednesday.
A final investment decision is due in 2014 for the 1,400 megawatt direct current cable that will eventually bolster a German power market switching to renewable energy sources such as wind, solar and hydro from nuclear and fossil fuels.
The statement said Nord.Link, which will run to the town of Wilster on Germany's northern coast from the southern Norwegian town of Tonstad, was cheaper, quicker to build and posed fewer technical risks than an alternative line named NorGer.
"A second link, called NorGer, will also be developed and could possibly materialise within 10 years after Nord.Link," the statement said.
NorGer would run to the German town of Elsfleth-West, southwest of Wilster, from an unidentified Norwegian site.
When the plan for a joint venture between Norway and Germany was launched last December, both routes were considered mutually exclusive alternatives for the 1.5 to 2 billion euro ($2.0-2.6 billion) project.
Norway derives more than 90 percent of its power from hydro-electric dams and can back up the German power grid, while benefitting from the ability to import electricity during dry spells and opportunities to sell power across Europe.
Existing cables between Germany and the Nordic region include a 600 MW link to Sweden and two to Denmark with a total combined capacity of 2,365 MW.
EU policymakers favour new cross-border links as part of the vision of a harmonised energy market across Europe without bottlenecks.
($1 = 0.7677 euros) (Reporting by Vera Eckert, editing by Paul Casciato)