OSLO, Norway, Nov. 25 (UPI) -- A planned power interconnector between Norway and Britain, threatened by regulatory hurdles, is important to Europe's future, the EU's energy chief says.
EU Energy Commissioner Gunter Oettinger said -- after a Friday meeting with Norwegian Minister of Petroleum and Energy Tord Lien in Oslo -- a proposed 1,400-megawatt undersea line between the two countries can be a key part of Europe's energy future despite a disagreement that emerged this summer over its role in Britain's new electricity "capacity market," Norway's Technology Weekly reported.
Britain said in July it intends set up such a capacity market next year, through which hydroelectric power providers would be paid to back up intermittent output from wind, solar and other types of renewable generation, as well to provide power storage.
It is seen as a vital part of the profitability calculations made by Norway's Statnett in planning for the $2.5 billion NSN interconnector with Britain's National Grid, which is slated for commissioning in 2020.
A final investment decision is expected next year.
Britain's Department of Energy and Climate Change indicated the Norwegian line wouldn't be allowed to participate in it, bringing warnings from Oslo it is reconsidering its commitment because of "discrimination" against Norway.
Oettinger -- during a news conference with Lien -- offered assurances the proposed interconnector remains "in the game" in helping the EU meet its goal of developing a European-wide internal market and its decarbonization roadmap for 2050.
Saying Brussels prefers "a common European mechanism" in establishing a capacity market rather than "28 fragmented mechanisms," he said Norway would work together with the European Commission on how one should be set up.
"If we get a proposal for a national capacity market on the table, we will examine whether it is consistent with our market rules or if there is another and better solution," he said. "Here Norway is part of the game, with great flexible capacity both in terms of production and storage of energy."
Lien said he wasn't surprised by the positive signals from Oettinger, the Norwegian publication reported.
"Ours and the Commission's positions remained almost identical at all times," he said. "It is important for us to say that this means something to us and requires involvement of the EU in the years to come. But there is no disagreement of significance (of the interconnector) between the Commission and Norway."
Asked if he was opposed to individual nations such as Britain setting up their own capacity markets, Lien responded, "I have a certain understanding that Britain must make adjustments (to its market proposal) in a short period of time.
"But I want to be clear that either we must be able say that this solves the problem -- which of course should be possible -- or there must be a capacity market that also includes renewable hydroelectric power from Norway."
British Prime Minister David Cameron, German Chancellor Angela Merkel and Norwegian Prime Minister Jens Stoltenberg agreed last year on a partnership among the three countries to secure "sustainable long-term energy security" through undersea interconnectors.
Studies of the Norwegian grid show there is capacity to connect two new interconnectors between Norway and countries outside the Nordic power market before 2020.
Statnett has planned to develop and build the NORD.LINK interconnector between Norway and Germany by 2018 and the NSN interconnector between Norway and Britain, together with the National Grid, by 2020.