Exploring the Nato-L project and the transatlantic power exchange for a decarbonised future
As energy systems on both sides of the Atlantic accelerate their transition to renewables, a bold question emerges: could transatlantic power exchange unlock new pathways to decarbonisation and security?
The North Atlantic Transmission One–Link (NATO-L) proposes to do exactly that—a multi-terminal HVDC interconnection linking North-East America with the North Sea region of Europe, enabling transatlantic power exchange and supporting shared objectives for decarbonisation, energy security and system resilience.
As renewable penetration accelerates in Europe, periods of excess generation and low prices are becoming more common, particularly in the North Sea basin. At the same time, North-East America benefits from a large hydro system that provides complementary flexibility and long-term storage, though it is expected to face future dry years. A long-distance HVDC connection could allow these systems to work together, smoothing variability and delivering reliable clean power across regions, creating benefits in both directions.
Realising this vision requires more than technical feasibility. It raises fundamental questions of market design, regulation and investment. The North Sea region has liberalised spot markets, while the relevant North-East American markets operate under a vertically integrated utility model with no spot price signals.
Bridging these approaches will require a bespoke revenue model and careful coordination between regulators on both sides of the Atlantic.
Beyond market design, the NATO-L project could generate significant welfare benefits by supporting climate targets, creating new industrial opportunities, and strengthening energy security. It also offers a unique chance to deepen transatlantic cooperation on climate and energy policy.
In a new report, AFRY examines the market and regulatory dimensions of NATO-L, mapping both the opportunities and the barriers that must be addressed to turn this vision into reality.
