Power Line Project Delayed, to Affect Supply in Central Norway

A major Norwegian power line project will be delayed, which is likely to result in insufficient electricity supply and drive up prices in central Norway from late 2016, grid operator Statnett said.

Construction of the Oerskog-Sogndal power line had to be stopped after a court revoked a permit that had been issued by the ministry of oil and energy, which means the line cannot be completed in 2016 as previously planned, Statnett said in a statement on Wednesday.

The court decision said the license was revoked due to erroneous information regarding the path of the transmission line and because Statnett's right to access properties was invalid, according to the grid operator.

"It's probable that there may be a very difficult energy situation in (the region of) Moere after Nyhamna (a gas processing plant) increases consumption by about 120 megawatts (MW) in the fourth quarter of 2016," the state-owned company said in a letter to the ministry.

Nyhamna processes gas from Royal Dutch Shell (RYDAF)'s giant Ormen Lange field offshore Norway.

As a result of increased consumption, prices in central Norway could be higher than elsewhere in the Nordic region, and costly reserve capacity at gas-fired plants may have to be used in dry years when hydropower supply is reduced, Statnett said.

Hydropower plants typically generate more than 95 percent of the electricity in Norway, and during dry years it has to import power from other Nordic countries and continental Europe.

Norway also has several gas-fired plants, which are used mainly to provide reserve power.

If the construction of the line is further delayed until end-2017, the supply of power to a Norsk Hydro aluminum smelter could be limited to avoid blackouts, Statnett added.

The grid operator said it would consider whether to appeal the court's decision.

(By Nerijus Adomaitis, editing by Jane Baird)