The NorNed cable is used to import and export electricity to and from Norway and the Netherlands, in line with the European Union’s policy to integrate markets and encourage free-market operation. In addition, the NorNed cable provides greater security of electricity supply in the Netherlands and Norway.
The Netherlands imports renewable hydropower from Norway via the NorNed cable. Hydropower is easier to control than unpredictable wind power, allowing Dutch plants to operate more consistently and efficiently. With hydropower, peak loads can be managed in the daytime, when Dutch electricity consumption is higher, while Dutch electricity can be sent northwards at night when Norway generates less hydropower. This ability to balance Norwegian and Dutch power sources also contributes to lower electricity prices in the two countries.
Capacity and electricity on the NorNed cable are traded through an explicit auction system. Initially these auctions were jointly organised by TenneT and Statnett. Today, they are run by the APX power exchange. TenneT uses its half of the NorNed revenues to fund its investment projects via Stichting Doelgelden (a foundation for the management of allocated funds).