Since May 2008, the Dutch and Norwegian electricity grids have been interconnected by the NorNed cable, making TenneT and its Norwegian counterpart Statnett the joint owners (50/50) of the world’s longest subsea HVDC cable link. The NorNed cable has a total length of 580 kilometres and a capacity of 700 megawatts (MW). Market parties import and export electricity to and from Norway and the Netherlands across the cable link.
The NorNed cable is in line with the European Union’s policy of integrating markets and encouraging free-market operation. In addition, the NorNed cable further improves the security of electricity supply in the Netherlands as well as Norway.
Dutch market parties are able to import renewable hydropower from Norway via the NorNed cable. In the Netherlands less electricity is consumed at night than during the day, while energy consumption in Norway tends to be relatively high at night. Norway prefers importing electricity produced in the Netherlands during the night. This is not only cheaper, but it also enables Norway to save the water in its reservoirs for use during the day. Norway can then in turn export power to the Netherlands during our daytime peak hours, when electricity is expensive.
After the NorNed cable was taken into operation, trade in capacity on the cable was initially conducted by means of an explicit auction system. The auctions were organised jointly by TenneT and Statnett. Since January 2011, APX has been organising implicit auctions of capacity and electricity. TenneT’s portion of the NorNed revenues (50%) is transferred to Stichting Doelgelden (a foundation for the management of allocated funds), which is used by TenneT to co-fund its investment projects.