HVDC links: Unit economics
Costly stations, cheap kilometres: the economics of distance
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.HVDC has high fixed costs at the converter stations but cheaper lines per km, so its cost per MWh falls with distance and utilisation. Chinese UHVDC moves power 1,000 km for roughly USD 2 per MWh in capital recovery; European subsea links cost far more per MW.
Key costs
| Measure | Value | Note |
|---|---|---|
| Changji to Guquan ±1,100 kV investment | 40.7 CNY billion2 | 3,293 km, 12 GW; about CNY 3.4 billion per GW (calculated) |
| Cost to move 1 MWh 1,000 km, Changji to Guquan | About 2.2 USD/MWh2 | Calculated: capital recovery at 8% over 40 years, 66 TWh a year, CNY 7.1 per USD; excludes operating cost and losses |
| Viking Link (UK to Denmark) | 1.7 GBP billion8 | 1.4 GW, 765 km; about GBP 1.2 million per MW and GBP 2.2 million per km (calculated); 2023 |
| Great Sea Interconnector budget | 1.9 EUR billion13 | About 1,200 km subsea; about EUR 1.6 million per km (calculated); 2026 |
| Break-even distance versus AC | About 300 (overhead) and 30 (cable) miles46 | EPRI, 2023; Brattle gives about 700 km for new overhead build |
Where the money goes
| Item | Share or amount |
|---|---|
| National Grid HVDC frameworks: converters | About GBP 24.6 billion, about 42% (calculated)9 |
| National Grid HVDC frameworks: cables | About GBP 21.3 billion, about 36% (calculated)9 |
| National Grid HVDC frameworks: converter and onshore cable civil works | About GBP 12.8 billion, about 22% (calculated)7 |
The framework split shows that converters and cables each cost more than the civil works around them. Subsea links cost more per km than overhead lines because of cable manufacture and specialist installation vessels, and Chinese overhead UHVDC is far cheaper per MW-km than European subsea projects.
Alternatives include shipping or piping fuel to a power station near the load, which avoids the line but adds conversion losses, and building generation locally. Merchant schemes such as Xlinks depend on long-term revenue guarantees; regulated interconnectors are paid from congestion income or tariffs.
Sources
- China's SGCC commissions world's first ±1,100 kV UHVDC project Power Line Magazine, 2019
- Overview of HVDC Technologies and EPRI's HVDC Research (R. Adapa, presentation to ERCOT) EPRI / ERCOT, 2023
- HVDC Transmission: Multi-Value Planning Considerations and Experience The Brattle Group (for MISO), 2023
- National Grid names eight for GBP 12bn HVDC framework The Construction Index, 2025
- National Grid announces commercial operations of Viking Link, the world's longest land and subsea interconnector National Grid, 2023
- National Grid awards HVDC supply chain framework contracts National Grid, 2025
- EU-backed electricity link to Cyprus stalls amid regional tensions Euronews, 2026