Viking Link Online: Stronger Interconnection to Great Britain Increases Nordic Prices

By Katinka Bogaard, Olav Johan Botnen, William Bjรธnness, and Odd Gunnar Jakobsen

The Viking Link cable connecting Western Denmark and the UK became operational December 29th 2023. Initially operating at a reduced exchange capacity of 800 MW in both directions, it is expected to operate at its full capacity of 1400 MW in Q1 2025.

๐ŸŽฏ ๐—ช๐—ต๐—ฎ๐˜ ๐—ถ๐—บ๐—ฝ๐—ฎ๐—ฐ๐˜ ๐˜„๐—ถ๐—น๐—น ๐˜๐—ต๐—ถ๐˜€ ๐—ป๐—ฒ๐˜„ ๐—ถ๐—ป๐˜๐—ฒ๐—ฟ๐—ฐ๐—ผ๐—ป๐—ป๐—ฒ๐—ฐ๐˜๐—ผ๐—ฟ ๐—ต๐—ฎ๐˜ƒ๐—ฒ ๐—ผ๐—ป ๐˜๐—ต๐—ฒ ๐—ก๐—ผ๐—ฟ๐—ฑ๐—ถ๐—ฐ ๐—ฝ๐—ผ๐˜„๐—ฒ๐—ฟ ๐—บ๐—ฎ๐—ฟ๐—ธ๐—ฒ๐˜ ๐—ฎ๐—ฟ๐—ฒ๐—ฎ๐˜€?

Our simulation results with and without Viking Link, project somewhat higher prices across numerous Nordic price areas leading up to 2025. The implications for the Danish price area DK1 are in the interval of 1-1.8 โ‚ฌ/MWh, while for Southern Norway the implications are in the interval of 0.2-1.3 โ‚ฌ/MWh. Our model output shows that the price reductions for Great Britain are in the interval of 0.3-0.8 โ‚ฌ/MWh.

On the way to 2030s, Viking Linkโ€™s price impact on the Nordics is expected to weaken in pair with the planned expansion of wind and solar power generation in Great Britain. Net flows could reverse with renewable power being exported from Great Britain to the Nordics.