The Department for Business, Energy and Industrial Strategy said the agreement comes ahead of the start of commercial testing operations in October of the North Sea Link, the first electricity interconnector between the two countries. UK ministers said the North Sea Link would help reduce wholesale electricity prices, and cited an estimate from regulator Ofgem which said savings for customers’ annual energy bills could total £3.5 billion over the next 25 years.
The 1,400 megawatt (MW) cable’s start-up comes as electricity prices in both countries are at multi-year highs, albeit UK prices at a steep premium, suggesting it will initially export power from Norway to Britain.
The UK will also benefit from Norway’s vast hydropower resources to help balance intermittent wind power.
Meanwhile, Norway can import cheap surplus renewable energy to save water in its hydropower reservoirs.
Lars Andreas Lunde, State Secretary in the Norway Ministry of Petroleum and Energy, said: “I am happy to sign a power trade agreement with the UK today.
“This agreement facilitates a predictable framework for power trade and strengthens cooperation between our two countries.”
The deal was negotiated by the Ministry of Petroleum and Energy and the British Ministry of Business, Energy and Industrial Strategy in parallel with the negotiations on the free trade agreement between the EEA countries and the UK.
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8am update: Ministers say Aukus deal ‘isn’t about France’
A Foreign Office minister has insisted that an agreement which will see the UK and US co-operate to develop a new fleet of nuclear-powered submarines for the Australian navy “is not about France” after a contract between France and Australia was cancelled.
James Cleverly told Sky News that the agreement – known as Aukus – was instead “about our very strong relationship with the United States of America and Australia, it’s about reinforcing an incredibly important and strong defence relationship, and it is also about making sure that we have hi-tech manufacturing jobs here in the UK, that’s what this is about”.
He said: “Obviously, with any international relationship, there are ups and downs, and I have no doubt that we will ultimately resolve any frictions that there are currently with France. But this is actually about making sure that A, we are protected, and B, that we are closely aligned with two of our strongest and most long-standing defence and security partners in the world.”