Our latest QC Deepdive looks at Viking Link, the 1.4 GW HVDC cable connecting Denmark (DK1) to Great Britain, inaugurated in late 2023.
On a system level the cable saves roughly €400m/year in reduced electricity prices costs, a clear win for Europe as a whole. But zoom in on individual bidding zones and the picture is more nuanced. Our cGrid modelling, with vs. without the cable, shows GB enjoying lower average prices (-2.8 €/MWh), while exporting zones see prices rise. DK1 by +3.8 €/MWh, and even SE3 and SE4 by +1.4 €/MWh and +1.8 €/MWh respectively.
This is the core tension behind interconnectors: they lower total costs and integrate markets, but redistribute who pays. It’s exactly why the debate around allocating grid congestion income, recently pushed by Sweden’s Minister of Energy at EU level, matters so much.
How should the benefits and costs of interconnection be shared? Reach out to us if you’d like to discuss this kind of modelling more.
