Construction starts on first UK-Germany power cable

Construction was underway on the 1.4-GW NeuConnect interconnector, the first power cable between Germany and the UK, the project company said July 19.

NeuConnect's main contractors, Prysmian and Siemens Energy, have started works in the UK with construction on the German side to begin early 2024.

Start of operations was planned for 2028.

"NeuConnect will be the first ever power line between the UK and Germany and is central to my mission to bolster national energy security while also strengthening our important ties with a North Sea ally," UK Energy Security and Net Zero Secretary Grant Shapps said in a statement.

The GBP2.4 billion ($3.1 billion) project, the single-largest Anglo-German infrastructure investment, is led by global investors Meridiam, Allianz Capital Partners, Kansai Electric Power and TEPCO.

Some 725 km of land and subsea cables will link the Isle of Grain in Kent to Wilhelmshaven, Germany, helping to integrate renewable energy sources in both countries.

NeuConnect will construct new converter stations connected by subsea cables travelling through British, Dutch and German waters.

The first phase of subsea cable installation will start next year, it said.

Meanwhile, subsea cabling of the new Denmark-UK cable was completed July 13 with the 1.4-GW Viking Link on track to start before the end of the year.

Britain flipped to net power exports in the week ending July 16 after net imports hit record highs in May boosted by the full 4 GW capacity on interconnectors from France as well as the 1.4 GW NorthSeaLink cable from Norway.

Germany, meanwhile, registered record net imports since closing its final three nuclear reactors in April, mainly as a result of lower wind and improved hydro in the Nordics and Alps as well as record-high carbon costs.

Analysts at S&P Global Commodity Insights forecast Britain holding a net export position between August and November at an average 0.7 GW, with the wide discount between UK carbon allowances (UKAs) and EU ETS prices driving the competitiveness of British gas versus EU fossil-fuel generation, they said in a July 13 report.

Platts, part of S&P Global, last assessed UK power for 2024 at Eur134.91/MWh ($151/MWh) compared to an exchange-settled Eur137.79/MWh for Germany's Cal 2024 baseload contract.