An undersea power link is to be established between Britain and Norway at a cost of around £1 billion. Norway generates almost its entire electricity production using hydropower while the U.K. are planning more wind farms. Establishing a power cable between the two countries could help to smooth-out intermittencies that are an integral feature of producing electricity by renewable means such as wind-power, whereby Norway supplies electricity to Britain when necessary but gets it back again on windy days.
The state electricity company, Statkraft, said the cable would stretch 465 miles across the North Sea to Britain from southern Norway making it the longest undersea power cable in the world.
There is already a link with France from Britain and another currently under construction with the Netherlands. When river levels fell last year with the result that France closed 14 of its nuclear reactors, some of the consequent shortfall in French electricity was met by electricity from the U.K.
The British government is anticipating an increase of wind-energy to meet its target of making 15% of its electricity from renewables by 2020. That said, back-up systems are necessary to provide power when the wind is not so strong, mostly generated from fossil fuels and nuclear energy, but many of these power stations are due to be closed over the next few decades.
The exact details and timing of the project are a matter of negotiation but it does look like an extension of a European power grid concept which if large enough could absorb many of the hit-and-miss power output from renewable resources. There is a large installation called Desertec aimed at producing solar energy in north Africa and bringing that to southern Europe, which could provide it is thought up to 25% of Europe's electricity. Perhaps the future of continental electricity production will be made on a Europe-wide scale, but this still does not solve the problem of supplanting liquid fuels, to replace those currently derived from oil.
"National Grid plans world's longest underwater power cable between Britain and Norway," By Rowena Mason. http://www.newsonfeeds.com/article/10368323/National%20Grid%20plans%20world%27s%20longest%20underwater%20power%20cable%20between%20Britain%20and%20Norway
How does the electrical industry account for PD losses in power supplied over long distances? Is there an industry standard under which over a certain distance a scheme would become deemed un-economic?
This is taken from wikipedia Power losses:
Transmitting electricity at high voltage reduces the fraction of energy lost to resistance. For a given amount of power, a higher voltage reduces the current and thus the resistive losses in the conductor. For example, raising the voltage by a factor of 10 reduces the current by a corresponding factor of 10 and therefore the I^2R\,\! losses by a factor of 100, provided the same sized conductors are used in both cases. Even if the conductor size (cross-sectional area) is reduced x10 to match the lower current the I^2R\,\! losses are still reduced x10. Long distance transmission is typically done with overhead lines at voltages of 115 to 1,200 kV. At extremely high voltages, more than 2,000 kV between conductor and ground, corona discharge losses are so large that they can offset the lower resistance loss in the line conductors.
Transmission and distribution losses in the USA were estimated at 7.2% in 1995 
As of 1980, the longest cost-effective distance for electricity was 7,000 km (4,000 miles), although all present transmission lines are considerably shorter."
So that's about the loss over the US grid. As I understand it, the UK national grid loses about the same amount i.e. 7%.
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