Norwegian, Swedish grids to put $107 mln into new Nordic power-balancing system

Steam rises off the sea in Oslo harbour in Oslo December 9, 2010. REUTERS/Toby Melville

OSLO (Reuters) - Norway’s power grid operator Statnett and its Swedish counterpart Svenska Kraftnat have agreed to jointly invest 1 billion crowns ($107.41 million) in a system for balancing Nordic power supply and demand, the Swedish group said.

A new model is needed to accommodate the transition toward more renewable energy and to facilitate Europe’s common electricity market, Svenska Kraftnat said in a statement on Monday.

The system will control power balancing across the Nordic region, also including Finland and Denmark. Those countries’ grids were initially reluctant to agree on a deal as they were left out of some parts of the decision-making.

After a deadlock in negotiations that lasted several months, and which left net power importer Finland at risk of being left out of the system, the grids reached a deal early last year that allowed a national veto in balancing decisions.

The new model will include information technology (IT) that digitizes and centralizes balancing control, under which imbalances in the power system will be settled within 15 minutes, meeting European Union requirements.

“Automation is an absolute prerequisite for managing the changed power system. The changes mean that we will do more in a shorter time,” said Lowina Lundstrom, head of Svenska Kraftnat’s system operations.

“We cannot do that with the manual management we have today.”

The balancing methods the new model will develop are subject to regulatory approvals from both Norwegian and Swedish power regulators.

Reporting by Lefteris Karagiannopoulos; Editing by Jan Harvey