In late-July, the European Investment Bank (EIB) agreed on the financing structure of NeuConnect, the first ever energy link connecting Germany and the United Kingdom, two of the largest electricity markets in Europe.

The investment to build the interconnector will amount to EUR2.8 billion, with the EIB set to contribute up to EUR400 million for the financing construction of the section within the European Union (EU).  Other financiers include the UK Infrastructure Bank, which will focus on the stretch within UK maritime and land territory, and the Japan Bank for International Cooperation (JBIC). 

The NeuConnect project consists of a high-voltage direct current (HVDC) link interconnecting England and Germany through German, Dutch and British waters. The project will have a rated capacity of 1.4 GW and DC voltage of 525kV. The predominantly subsea cable will have a route length of 725 km and will connect a converter station near Fedderwarden, northern Germany, near the Dutch border, linking the German grid interface to the electricity network of Netherlands-based grid operator TenneT. It will alternating current (AC) covert power to direct current (DC) and then feed power from that location to a converter station and grid interface on the Isle of Grain, Kent, southeast England, reconverting to AC and linking with the UK’s National Grid ESO network. 

The expected start date of commercial operations is in 2028, with the Fedderwarden site currently an undeveloped brownfield zone. Germany-based Siemens Energy has been appointed as the contractor for the NeuConnect converter stations, and Italy-based Prysmian will manufacture and install the cable. 

Talking to New Energy World in August, Siemens Energy’s Europe transmission director Mark Pilling explained that the converters will convert the electricity to DC to reduce transmission losses and convert it back to AC at the other side of the line.  

“You will have to invest in a converter plant that is about as large as a football stadium, but once your transmission distance exceeds 100km, it is worth converting to DC because it greatly reduces transmission losses,” Pilling said. 

“While NeuConnect and existing interconnectors are for point-to-point transmission, we are in the future going to see multiple-point interconnector networks between, for example, offshore wind parks in the North Sea,” he added. 

NeuConnect’s two converters will be identical, the massive size largely explained through space being needed for the management of electro-statics. Siemens Energy has a 30-year service agreement with NeuConnect, a privately-financed consortium of investors led by Meridiam (France) and includes Allianz Capital Partners (Germany) and Kansai Electric Power (Japan), with its German arm based in Wilhelmshaven, on the North Sea coast, and UK NeuConnect in London. 

Pilling stressed that interconnectors are a key part of the world’s energy transition towards net zero CO2 emissions solutions because they facilitate electricity trade across vast distances, facilitating the capture, transmission and consumption of renewable energy, based on natural forces that may wax and wane at any one location. These cables move electricity from where the wind is blowing, the sun is shining, and rivers are flowing to where these natural forces maybe temporarily quiescent. So, interconnectors are a key element of Europe’s future energy system, envisioned to play a major role in reliably and efficiently integrating these renewable capacities into the electrified and flexible energy system of the future.  

Today electricity is only 25% of all the energy consumed in Europe. Most of the rest comes from fossil fuels, often imported from outside Europe. This will change – with the European Commission’s Green Deal, the European Union is aiming to be climate neutral by 2050. Electric vehicles, heat pumps and indirect electrification via renewable hydrogen will increase their share of electricity in energy consumption. Brussels-based WindEurope, an association of the wind industry, in mid-2021 projected that by 2050, direct and indirect electrification will make up 75% of all energy consumed in Europe (1). Electricity will no longer be limited to the power sector but decarbonise mobility, heating and industry. This means much more renewable electricity will be deployed at a faster pace. In the EU, this was mandated by REPowerEU (2), a European Commission proposal to end reliance on Russian fossil fuels before 2030 in response to the 2022 Russian invasion of Ukraine. Under REPowerEU, the EU wants wind energy in the EU alone to grow from less than 200 GW today to 510 GW by 2030 and 1,300 GW by 2050.  

From a technical standpoint NeuConnect will transmit electricity, not necessarily renewable electricity. But both Germany and the UK have high shares of renewables in their electricity mixes. In Germany renewables were just over 40% of all electricity produced in 2021, according to the Fraunhofer Institute for Solar Energy Systems (3). In the UK, it comprised 43% of all electricity produced in 2020, said the UK National Grid. (4). 

Speaking to New Energy World, Christoph Zipf, communications manager of industry association WindEurope, projected that NeuConnect will transmit significant shares of renewable electricity, as both Germany and the UK have high ambitious plans to increase their respective offshore wind capacities in the North Sea. 

“NeuConnect will also help reduce renewable energy curtailment in both countries, as currently there are regions in Europe where renewable electricity generation exceeds electricity demand, which can lead to grid congestion and curtailment,” Zipf explained. 

“Germany has been slow in expanding onshore grid connections from its wind-rich north to the industrial centres in the south of the country, which leads to relatively high curtailment of wind energy in the north of Germany, where most of its wind turbines are located. As a result, Germany is not utilising its full wind energy potential. In 2020 Germany curtailed 6.1 TWh of electricity, curtailment costs amounted to EUR761 million (USD 760 million). In the UK curtailment in 2021 was 2.3TWh, resulting in curtailment costs of GBP507 million [USD 583 million],” he added. 

Zipf added that better EU grid connectivity – within and between countries via interconnectors – can also benefit electricity consumers, as they allow for a more efficient use of renewable electricity supplies.  

“When the wind blows, the price to generate wind energy goes down. This competition can lead to lower electricity prices for households and consumers, which is essential to countering the current electricity price crisis,” Zipf said.  

For NeuConnect to play a more important role in achieving EU and UK policy goals in improving energy efficiency and reducing carbon emissions, the project’s current development plan of about 10 years will have to be streamlined significantly, said Pilling. He said this technically clearly doable, given that actual construction time currently amounts to only 2-3 years, with government liaison, bureaucratic processes, technical assessments and site research accounting for much of the rest of the time.   

And there already are links connecting the UK (5) to the energy systems of Belgium, France, the Netherlands, Norway and Ireland providing experience upon which to draw. For example, the North Sea Link, a 1.4GW link between Norway and the UK under a joint venture between Britain’s National Grid and Norway’s Statnett became operational as recent as in October 2021. There are also major international transmission projects elsewhere. In North America, for example, the Champlain Hudson Power Express (CHPE) by US-based Transmission Developers (TDI) is planned to see construction begin this year, to become operational in 2025. The CHPE would carry hydropower and wind power from eastern Canada and feed it directly in the New York City electricity market. 

Zipf added that there were other needs to speed up construction, citing an August 8 announcement by Norway that it would curb electricity exports to the UK and the rest of Europe if water levels for its hydropower plants remain low. This “adds to the need for additional interconnectors,” he added,  

One unknown impact will be the impact of this interconnector and future such systems on UK energy policy and its current slant towards nuclear energy. The British energy security strategy published in April (2022) (6) signalled a significant expansion of nuclear power, with an ambition of increasing output to 24GW by 2050. This would represent up to around 25% of Britain’s projected electricity demand, with small modular reactors forming a key element if this expansion. 

But what will happen if large amounts of cheap German renewable electricity are made available to Britain, asked Volker Quaschning, an engineer and professor of renewable energy systems at the Hochschule für Technik und Wirtschaft Berlin (HTW Berlin – University of Applied Sciences). Would this put UK nuclear investments under review? 

“Germany plans to expand solar and wind power to 200GW and 100GW respectively by 2030, meaning in a few years, Europe’s energy market will be swamped with enormous amounts of solar power during mid-days, because Germany will have to sell any electricity that is generated in excess of Germany’s own consumption,” Quaschning told New Energy World. 

“When you are looking at NeuConnect, its 1.4GW seem minuscule against Germany’s coming 300 GW output, but with the interconnectors getting cheaper and Europe’s power rates increasingly diverging, we will be seeing more interconnectors soon, boding ill for the future price competitiveness of Britain’s nuclear plants,” he posited. 

Quaschning argued that interconnectors would also compete with battery storage and hydrogen, becoming a more attractive way of transporting wind power from North Sea wind parks to consumers. “Battery storage will remain comparatively expensive, while the production of hydrogen from electricity involves major energy loss,” Quaschning said. 

If he is right, transmission and renewables may become an unbeatable combination for solving current energy shortages and carbon emission concerns. 




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This article was first published in the “New Energy World” magazine: