New Co-Op Agreement for Germany – Sweden EUR 600M Subsea Power Link
- Business & Finance
Transmission System Operators 50Hertz (Germany) and Svenska kraftnät (Sweden) agreed on further details regarding the planning and construction of the Hansa PowerBridge in the cooperation agreement that was signed in Berlin today.
Namely, in addition to the time schedule, agreements were made on the technical design, project organisation, ownership structures, cost allocation, tendering, construction and commissioning of the planned 700 megawatt (MW) direct current connection between Germany and Sweden.
According to the current planning, preparations should now be under way for the permitting procedure on the German end, to be concluded by end of 2021. By that time, the necessary permits should also have been obtained on the Swedish end.
Reportedly, the call for tenders for the installations is expected to be issued in 2022. The interconnector should be put into operation in 2025/2026. The investment costs, estimated to total over 600 million euros, are borne by Svenska kraftnät on the Swedish side and by 50Hertz on the German side – the costs for the shared submarine cable are evenly distributed among both TSOs.
The interconnector, which will have a length of about 300 kilometres, will connect Güstrow in Mecklenburg-Western Pomerania (Germany) and Hurva in southern Sweden, bringing Scandinavia with its large storage volume and continental Europe with its high share of wind and solar power closer together.
“The interconnector will improve the integration of renewable energy sources in the transmission system and as such contribute to the climate-friendly and cost-efficient generation of electricity. The European common market helps us to realize a cost-efficient energy transition,” said Rainer Baake, State Secretary at the Federal Ministry for Economic Affairs and Energy.
In case of strong winds in Germany, the output of generating units will less often be reduced at high cost to prevent an overload of the electrical grid; instead, the electricity can be exported to Sweden. Vice versa, the connection enables the import of electricity from Swedish hydro-power plants when winds are low. “Facilitating a more efficient utilization of the production mix in different regions of Europe makes sense from an environmental perspective as well as an economical point of view,” stated Director General and Chief Executive Officer of Svenska kraftnät, Mikael Odenberg.
Boris Schucht, CEO of 50Hertz, said: “Moreover, the connection to the Scandinavian hydro reservoir units improves the integration of the growing renewable energy volumes in Europe and as a result furthers the energy transition in Germany. The Hansa PowerBridge will establish an easily adjustable long-distance connection from Scandinavia via the north-east to the south of Germany as soon as it is linked to the SuedOstLink, a German domestic direct current project.”