The UK energy regulator has granted a licence to a Norwegian consortium that plans to build a 345-mile power cable to bring renewable hydro power into Britain.

The NorthConnect project cleared its first hurdle on Tuesday after Ofgem granted an electricity interconnector licence to the developers, paving the way for the project to begin navigating a set of complex regulatory rules governing electricity transmission in Europe.

NorthConnect aims to transport Norway’s abundant hydro-power reserves in the south west of the country through a high voltage 1.4GW subsea cable to a substation at Peterhead in Aberdeenshire. Under current plans the project will begin powering homes by 2022.

There are currently four interconnectors to mainland UK, from France, the Netherlands, Ireland and Northern Ireland, with a combined capacity of 4GW. But ministers have said they would support a further 9GW of new interconnectors to help to improve security of supply by giving the UK access to power generated elsewhere.

NorthConnect says its power link could help the UK meet its renewable energy targets while providing extra capacity when domestic sources are stretched due to low wind speeds or unplanned outages at conventional power plants.

It could also allow the UK to export excess power at times of strong wind power output when demand is low, such as overnight. The exported power could be used in Norway’s hydropower reservoirs, known as the ‘green battery’. The reservoir operators use electricity to pump water up into the dam when power is cheap and later run the water back out of the dam over a power generation turbine to release energy back into the grid when it is needed.

A spokesman for Ofgem said that the next step for the NorthConnect developers is to decide whether to opt in to Ofgem’s ‘cap and floor’ regime, which regulates how much they can make from the project and requires compliance with various European rules. The scheme guarantees a minimum return for the developers, even if power prices are low, by topping up their revenue through consumer funds. But it also caps how much money they could make by returning excess profits to customers.

Last week Ukrainian entrepreneur Alexander Temerko said he would build a 2GW power link to France but would forego the security of Ofgem’s regime by seeking an exemption from various UK and EU rules around access to infrastructure.

The NorthConnect project doubles the UK’s planned electricity links with Norway, following the NSN Link, which is being developed by National Grid and Norway’s transmission operator Statnet. The project received its Ofgem licence three years ago and is expected to begin operating a year before NorthConnect in 2021.

NSN will offer the same capacity as NorthConnect over a 447-mile subsea cable between Norway and Blyth in the North East of England, which would make it the longest electricity interconnector in the world.

Other planned interconnector projects to the UK include extra links to France and Ireland as well as new connections with Belgium and Denmark.

The four Norwegian companies developing NorthConnect are Vattenfall, Agder Energi, E-CO, Lyse.

(telegraph)

Although Norway is not an EU member, it has agreed on a voluntary contribution of €2.8 billion to promote economic and social cohesion in poorer Eastern European countries. “It’s a win-win situation,” explains Elisabeth Aspaker who adds: “It’s not a rule that we should get something back.”

Elisabeth Aspaker is Norway Minister for EEA and EU affairs.

Aspaker spoke to EurActiv.com’s Publisher and Editor, Frédéric Simon.

Norway recently sealed an agreement with the EU about grants it will offer to the least developed member states of the European Union. Why does Norway provide such grants? Is this an obligation under the EEA/EFTA treaties?

This is a voluntary contribution from Norway to support social and economic cohesion in Europe. It is linked to the EEA Agreement which include a common goal to work together to reduce social and economic disparities in Europe. To this end, we have created the EEA and Norway Grants.

Europe is our most important market. Almost 75% of our exports go to the European market. So what’s good for Europe is good for Norway. This is why we have this kind of partnership with the EU.

There are 15 recipient countries, most of them from Eastern Europe, but also Portugal and the Baltic countries. This mirrors the EU Cohesion Fund criteria which means that Spain has been phased out for the coming financial period (2014-2021).

Since 1994, our contribution has added up to about 30 billion Norwegian Kroner (NOK) (€3.27bn). For the next period (2014-2021), it is almost 26 billion NOK (€2.8bn).

So it’s quite a lot of money and it has increased significantly over the last decade.

You said these are voluntary grants. What was the rationale when the decision was taken?

As I said, this is a win-win situation. If the EU member countries are doing well, this is good for Norway because we are close partners when it comes to the economy or security issues.

Norway is not an EU member state, as you know, but we participate fully in the internal market via the incorporation of EU legislation in the EEA Agreement. So, in that regard, we have the same rights and duties as EU member states.

This is not a legal obligation, but we contribute because it is in our interest. We share a responsibility towards countries that have a weaker economy than ours. We want to contribute to their economic and social development, so that the internal market can function as well as possible throughout the EEA.

Also, when you compare the political agendas in Norway and in the EU, you will find that they are very similar. It’s about dealing with migration, better regulation for the single market, energy union, climate and follow up after Paris, etc.

So these grants offer opportunities for Norway to have a good dialogue with the EU and at the same time enhancing cooperation. Our grants both supplement and complement the EU funding for these 15 countries.

Norway indeed contributes to specific areas of the EU budget, depending on whether or not it participates in programmes or agencies. So these grants come separately?

Yes, they are separate contributions that we negotiate individually with each recipient country via a Memorandum of Understanding. So Poland, for example, knows in advance how much money they will get. We sit down at the table with the Poles and discuss how we’re going to spend this money.

And we have three main priorities for Norway in the next period: 1) Innovation, research and education; 2) Environment, energy and climate change; and 3) Justice and home affairs, including asylum and migration policy. And then there are two other priorities – about social inclusion youth employment and poverty reduction; and about civil society, good governance, fundamental rights and freedom.

So the grants cover a wide range of topics. What’s important is to focus on the areas we have selected but obviously, there is a partner on the other side of the table so we have to agree on what will be the priority for each country.

It’s about give and take but if you sum up, the priorities are very much aligned with what the countries themselves have prioritised. So we will have discussions with the beneficiary countries within the next 6-9 months, and then we hope to have the MoUs agreed with 15 countries.

You mentioned energy as one area covered by the grants. Does this mean Norwegian companies will benefit indirectly from the grants by gaining a foothold in these countries?

It’s more about partnership. Many Norwegian businesses will be involved but also government institutions like the migration service in Norway which has a partnership with its Greek equivalent. It’s about Norwegian entities, NGOs and businesses finding partners in areas like transport, energy, education, research, etc. on some specific projects.

So you don’t have a metric to measure some kind of return on investment for these projects?

No, no – it’s not a rule that we should get something back. Partnerships can involve trade unions, municipalities, schools, etc. So we’re not just looking for business partners, it’s broader than that.

Would these grants be smaller or bigger if Norway decided to join the EU one day? I know it’s not on the agenda but still…

Well, this is clearly not on the agenda. Did you see the opinion polls? They are worse than ever! If the question of EU membership was being asked now, about 75% would vote ‘No’.

This is the third time we have negotiated these EEA and Norway grants and they have become something of a normality in our relation with the EU. It is in our interest to contribute. Having the EEA agreement and being part of the EU Internal Market is a cornerstone of Norwegian policy.

What about a country like Britain? If it decided to leave the EU, would it also benefit from having a similar arrangement with the EU, contributing to cohesion in poorer European countries?

I won’t speculate on the arrangements for Britain if the Leave camp wins. From the Norwegian side, we really hope they stay. Britain is an important partner for Norway in many respects and we need them inside the EU. There is certainly a need for more cooperation these days, not split-ups – whether we’re talking about migration, security or the economy.

The point I was trying to make is that Britain is having a fierce debate about how much it is getting back from EU membership. And here we have a wealthy country – Norway – which thinks it is in its own interest to contribute to the EU programmes and member states even though it is not a member. This would seem completely absurd to a Brit!

Going back to what I said earlier, we believe this is in our interest to improve social and economic cohesion in Europe. If Europe is doing well, Norway will also be doing well. If Europe is doing poorly or is destabilised, this will have a negative impact on Norway and the Norwegian economy. So this is why we believe we should involve ourselves beyond what is required under the EEA agreement.

The main beneficiary countries for these grants are Poland, Romania, Bulgaria, Greece, Slovakia and the Czech Republic, which are all relatively far away from Norway. How much business does Norway make with these countries? Do the grants help expand business there?

Poland is a very important country when it comes to fish exports for example. I don’t have the figures for all the sectors but when it comes to energy, a lot of business is done with different European countries which may or may not be grant beneficiaries.

We don’t consider things in terms of ‘one kroner out, one kroner in for Norway’. But of course we consider these grants as a good investment and it encourages Norwegian businesses to look for opportunities outside Norway. And there are good examples that this has been a success.

Can you cite examples?

We have good examples in different sectors.

There is Tomra, a leading Norwegian company in recycling, which has been able to introduce their technologies in Poland and Romania through projects funded under the Grants. Another example is Stokke, a producer of children’s furniture and equipment, which has a Green Innovation programme in Romania. A Norwegian-Estonian partnership under the Grants is underway with commercialising ground-breaking technology for detecting oil spill at sea.

But remember, the aim of the grants is twofold, it shall also strengthen bilateral relations between donors and recipient countries.

Take Poland, where the EEA has generally served both Norwegian and Polish industry well. In Poland, they process large amounts of Norwegian salmon because the tariffs there are so much lower than in Norway, you can’t compete. So this is why you have such a huge salmon processing industry now in Poland.

One of the areas covered by the grants includes support in the area of justice and home affairs. Do you expect the contribution to slow down the flow of immigrants or refugees to Norway or other EU countries?

First of all, we want to continue the cooperation we have with the Greek government. It’s about sending experts and NGOs, providing equipment, reception centres, etc. The purpose is to establish well-functioning asylum systems through capacity building and making sure that the right to seek asylum is safeguarded. Probably there will be more countries in the next period that will benefit from these programmes. If these grants can help more countries take their share of refugees, it’s a good thing.

Is Norway itself taking part in the EU burden sharing agreement?

Yes we are, voluntarily. We are supporting the EU trust fund and we are very much aligned with the EU when it comes to the migration crisis.

How many refugees has Norway agreed to take?

We have agreed to take 3,500 Syrian refugees. 500 were offered resettlement in 2015, and the remaining 3,000 will be offered in 2016,

We are also taking part in the EU’s one-to-one agreement with Turkey on refugees and are involved in the EU’s efforts to stabilise countries where migrants come from.

In development aid cooperation?

Yes, we cooperate quite closely with the EU on humanitarian aid. Norway played a central role in the donor conference for Syria in London, we were present at the Valletta conference last year and we have two vessels in the Mediterranean Sea – one offshore vessel between Italy and Libya and a smaller vessel from a Norwegian NGO in Lesbos.

Norway is a member of the Schengen area for passport-free travel in Europe. In November last year, Oslo decided to reintroduce temporary controls at the border with other Schengen countries – namely Denmark, Sweden and Germany. When will these border controls be lifted?

We have aligned ourselves on this question with EU countries which have these kinds of border arrangements these days. On the EU side, there is now an additional 6-month period – until November – when there may be national border controls. In that period, I think we all hope that the external Schengen border control can be reinforced

Of course, we have this problem on the Northern border with Russia, which is our external border. Suddenly, there were 5,000 people coming! But that is now solved hopefully.

They were coming by bicycle, strangely enough.

Yes, because it’s prohibited – you cannot just walk through this border so you have to use something with wheels and they chose to use bicycles. But I think in the next half year, there will be a new discussion on whether the external border is sufficiently well monitored. And I think we all want to return to normal as soon as possible.

Some in Norway have been calling for your country to abandon its membership of the Schengen area altogether. Will this be inevitable? Some even within the EU say Schengen has already ceased to exist, effectively…

Only a small minority in Norway are saying we should leave Schengen. It’s obvious that there are many positives of being a member of Schengen. If you consider our border with Sweden for example, if that was an external border, it would cost a lot to monitor. And it’s also about as we as persons can move around Europe without using our passports. We’re used to doing so within the Nordic countries since the 1950’s. And when the other Nordic countries entered the EU and became members of Schengen, there was a discussion about Norway. And we could simply not miss out on the positives of being able to move around freely without a passport. So we agreed to be members of Schengen.

Then it’s also about our fish exports: if you leave Schengen, you need special arrangements for exports. And the number of border controls need to be as few as possible for our fish to remain fresh when reach the European market. That’s another reason why the Schengen area is excellent for Norway – we are exporting a huge amount of fresh fish.

Regarding the migration issue at the border with Russia, is this now stabilised?

The numbers are now down to zero. It has been zero since December, when we reached an agreement in our dialogue with Russia. This is an incident that should not happen again. You have to realise this is a very sensitive area for the Russians, where they have military bases, submarines with nuclear weapons. It was really surprising that this could ever happen.

Was it not intentional?

I don’t know.