Atlantic SuperConnection: Laying the FID groundwork for subsea interconnector to ply UK with geothermal and hydroelectric electricity while doling out wind power to Iceland

As the rise in renewables and cleaner electricity, alongside national and global energy security pursuits, pushes the demand for high-voltage direct current (HVDC) interconnector cable sector offerings to new heights, plans have been set in motion to put the required funding in place to take a final investment decision (FID) on a subsea interconnector project between the UK and Iceland.

Atlantic SuperConnection (ASC) Energy, a subsidiary of Global Interconnection Group (GIG), is continuing to progress with its plan to develop a 1,794 MW (1.79 GW), 708 km interconnector, called Atlantic SuperConnection, which will enable a green energy link between Iceland and the UK, strengthening both countries’ security of energy supply.

Following an upgrade of the connection agreement to 1,800 MW (1.8 GW), ASC Energy is planning to invest £30 million of development capital to move to FID and enable the start of construction, which will be offered to GIG shareholders on a first-refusal basis, in a market placing exercise expected to be launched in Autumn 2024 backed by a £3.5 billion letter of support already provided by an investment bank.

When the necessary milestones are achieved, ASC plans to raise £1.2 billion of equity funding toward the construction budget, with the balance to be funded with long-term debt. While ASC Energy has already listed index-linked green bonds due to mature in 2056, their issuance may be increased. This interconnector will bring geothermal and hydroelectric electricity to the UK and take wind power to the existing Icelandic hydro dams with pumped storage refueling the dams to create a 1,500 MW (1.5 GW) clean battery.

Engineers RTEi, the international arm of the French transmission system operator (TSO) RTE, have confirmed the technical feasibility with full seabed survey mapping to determine the optimal cable route, thus, the crucial connection agreement with National Grid has been secured near Hull, England. The 1.79 GW Atlantic SuperConnection interconnector is expected to provide Iceland with greater energy security.

The Icelandic government’s energy regulator, Orkustofnun, awarded the first-ever onshore wind farm license to Landsvirkjun on August 14. With an estimated ISK 200 billion (almost $1.45 billion) annual benefits to Iceland and over 660 skilled jobs expected in the long term, the Atlantic SuperConnection interconnector is expected to generate a substantial positive impact. According to GIG, about ISK 100 billion (over $723.7 million) will be invested in strengthening the Icelandic grid.

Furthermore, the Atlantic SuperConnection interconnector is anticipated to help address the supply volatility from a growing dependence on wind and solar, reduce the UK’s dependence on fossil fuels for peaking power, enhance energy security, and slash energy prices for consumers and businesses alike by providing Britain with dependable zero-carbon energy.

This interconnector is also expected to cut the UK’s CO2 emissions from energy usage by more than 3% or 1.1 million tonnes of CO2 per year. While the Atlantic SuperConnection entered the interconnector projects’ pipeline in 2012, it has only recently been shown that the project is technically feasible, thus, the Iceland-UK link is now considered to be one of the most advanced submarine cable developments in the world and is believed to be readily financeable, according to GIG.

ASC has secured initial bids from HVDC cable manufacturers and HVDC converter stations and signed a bilateral connection agreement with National Grid at Creyke Becke substation. Described as complementary to the UK’s industrial, energy, and climate change objectives, Atlantic SuperConnection is set to help the country meet its growing electricity demand and deliver security of supply.

Britain is determined to become a clean energy superpower by 2030. To this end, it is pursuing multiple low-carbon and green energy endeavors, including interconnectors. At the end of August 2024, Sumitomo Electric Industries finished all onshore and offshore cable installation work for the Greenlink Interconnector between Ireland and the UK. As a result, trial operations are due in the coming months.

The Shetland Islands have also now been connected to the main grid in Scotland, making the 320 kV HVDC interconnector, known as the Shetland HVDC Link, fully energized.

In addition, the first pre-lay operations campaign to clear the proposed cable route for the first direct energy link between the UK and Germany, known as the 1.4 GW NeuConnect interconnector, was set to start at the end of August. This activity in UK waters is slated to end on September 24.