(Reuters) – Italy’s Prysmian <PRY.MI>, Germany’s Siemens <SIEGn.DE> and Sweden’s NKT have secured contracts worth a total 1.1 billion euros (£987.4 million) to build the world’s longest subsea power cable, the Viking Link between Britain and Denmark.
Britain’s National Grid <NG.L> and Denmark’s Energinet awarded the contract for the project’s 1.4 gigawatt (GW) parallel high voltage current cables to Prysmian and NKT HV Cables AB, while Siemens will supply two converter stations.
The link between the two nations will help them diversify supplies and integrate renewable power sources, National Grid said. The link will offer producers, such as those adding wind capacity, more opportunities to sell surplus power.
“Viking Link will play a vital role in helping to decarbonise the UK’s power supply,” said Jon Butterworth, chief operating officer for National Grid Ventures, putting the total value of the contracts at 1.1 billion euros.
The bulk of the work, worth 700 million euros, was won by Milan-based Prysmian, which will build Viking’s 1,250 km (780 mile) submarine section and the 135 km (85 mile) section on British soil, a sign it has recovered from glitches that plagued its Western Link project between England and Scotland.
National Grid operates the Western Link submarine connection, which has suffered repeated technical problems since operations began in December 2017. As a result, Prysmian restated core earnings for 2018 after booking additional writedowns.
Prysmian shares rose to a nine-month high of 19.88 euros after news of the contract was announced. By 1425 GMT, they were trading up 5.6% at 19.85 euros.
The two converter stations to be installed by Siemens will be built in Lincolnshire, England and Revsing, Denmark.
The Viking Link will have the capacity to power 1.5 million homes when in operation, although its start-up date has already been pushed back by a year to 2023.
The Viking Link will be National Grid’s sixth interconnector to Europe.
The company has three operational interconnectors to France, the Netherlands and Belgium, while the 1 GW IFA2 link to France and the 1.4 GW North Sea Link to Norway are due to start working in 2020.
Average British daytime demand for electricity is about 32 GW, depending on the season. Its power primarily comes from gas-fired power stations, wind turbines and nuclear plants.
($1 = 0.8965 euros)
(Reporting by Lefteris Karagiannopoulos in Oslo, Giulio Piovaccari in Milan and Muvija M in Bengaluru; Editing by Kirsten Donovan and Edmund Blair)