Norway rejects electricity cable project with Scotland

Norway's government on Thursday rejected plans for an undersea electricity cable with Scotland amid a debate on the Scandinavian country's energy independence and whether it should be exporting electricity.

The Norwegian oil and energy ministry said it was saying 'no' to the NorthConnect project because the country needed to meet its own energy needs at competitive rates.

"It is important for the government to ensure that we have a power system that can at all times fulfill the basic needs of power supply," Oil and Energy Minister Terje Aasland said in a statement.

"We need this hydro power and do not want to open it up for more exports," he said.

The project had been proposed by three Norwegian municipal groups -- Lyse, Agder Energi and Hafslund -- and Swedish state-owned electricity group Vattenfall.

With a capacity of 1,400 MW, NorthConnect would have enabled the two countries to exchange renewable energies -- wind power from Scotland, hydro power from Norway -- via a 665-kilometre (413-mile) cable under the North Sea.

Rich in fossil and renewable energies, the Scandinavian country already has power links to several other countries -- Britain, Denmark, Finland, Germany, the Netherlands and Sweden -- with a total capacity of around 9,000 MW.

Norway is not a member of the European Union but is integrated into the European market, including that for electricity, as a member of the European Economic Area (EEA).

Soaring electricity prices in Norway, largely sparked by skyrocketing prices on the continent, have however revived criticism about the cables, which have contributed to the price hikes.

"We need to use Norwegian energy to build Norwegian industry and contribute to competitive prices in Norway," Norway's minister for higher education, Ola Borten Moe, said in the same statement.

"After the last two cables abroad (Germany and Britain), experience has shown that we should not pave the way for more exports," he added.

In January, the Norwegian government presented measures that allow it to reduce exports in the event of a significant drop in its hydropower reserves, a decision closely scrutinised by European authorities.

Norway's state-owned electricity operator, Statnett, meanwhile announced on Thursday a reduction of its technical capacity on its North Sea Link cable with Britain, from 1,400 MW to 1,100 MW.

The group said the move brought it in line with the export ceiling on the British side.

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