12/09/2022 – Energy Series / The European Investment Bank / EIB / Germany / UK
MAKING NEW CONNECTIONS – The$2.8bn, 725km NeuConnect project is set to be the first ever energy link between Germany and the UK
The European Investment Bank (EIB) – as part of a consortium of more than 20 international banks – has agreed on the financing structure of the first ever energy link connecting Germany and the UK. The project will make it possible to use offshore wind energy more efficiently, with cross cross-border electricity trade helping redirect power to where it is most needed.
The investment to build the pioneering new interconnector will amount to e2.8 billion, with the EIB set to contribute up to e400m for the financing of the European part. The investor consortium is led by French investor Meridiam, Allianz Capital Partners, and Japanese company Kansai Electric Power. Alongside the EIB, other promotional banks include the UK Infrastructure Bank and the Japan Bank for International Cooperation (JBIC).
The so-called NeuConnect project (https://neuconnect-interconnector.com) will be the first interconnector between Germany and the United Kingdom, facilitating electricity trade between the European Union and the UK, and contributing to the integration of high shares of intermittent renewables across the North Sea. The expected start date of commercial operations is in 2028.
725km high-voltage DC interconnector
The project consists of a high-voltage direct current link interconnecting England and Germany through German, Dutch and British waters. The project will have a rated capacity of 1,400MW and DC voltage of 525kV. The predominantly subsea cable will have a route length of 725km and will connect a converter station and German grid interface to Tennet’s electricity network near Fedderwarden, and a converter station and grid interface on the Isle of Grain in the UK to the National Grid ESO network.
The project is an example of mutually beneficial co-operation between the EU and UK, including cross-border environmental benefits.
The contract to design, manufacture, install, test and commission the 725km interconnector cable has been awarded to Prysmian Group – a world leader in the energy and telecom cable systems industry.
Meanwhile, the contract to design and build two converter stations in the UK and Germany has been awarded to Siemens Energy – one of the world’s leading energy technology companies.
Finally, a joint venture between Arup and Fichtner has been appointed to provide project and commercial management; Safety, Health, Environment and Quality (SHEQ) management; and consenting oversight across both the onshore and offshore elements of the project.
A groundbreaking project for the energy transition
The interconnector will help to ensure better utilisation of offshore wind capacities on the coasts according to the respective local wind strength, thereby supporting EU and German renewable energy policies. The project will make it possible to reduce CO2 emissions and will contribute to meeting the European greenhouse gas emission reduction target of at least 55 per cent by 2030.
The route of the project will be implemented entirely underground and under the sea, meaning that the project does not fall under Annex I or Annex II of the Environmental Impact Assessment (EIA) Directive. Environmental impact studies have been carried out and appropriate measures will be taken to avoid, mitigate and compensate the impacts.
“This project is ground-breaking for the energy transition, as it makes it possible to use offshore wind energy more efficiently,” advised EIB Vice-President Ambroise Fayolle. “Cross-border electricity trade can help redirect power to where it is most needed, and can thus contribute to the integration of renewables and the stability of the energy supply.”