The EU is studying plans for a transnational power grid in the North Sea that could provide electricity from renewable sources for 70m homes. It could cost up to €20bn (£16bn) to install.

The proposed 3,850 mile offshore grid would connect more than 100 wind farms, containing 10,000 turbines, to seven North Sea countries - Britain, Belgium, Denmark, France, Germany, the Netherlands and Norway.

Senior EC energy officials yesterday gave a warm but guarded welcome to the plans, which were submitted by eco-campaigners Greenpeace and drawn up by environment consultants 3E, calling them "ambitious but realistic".

The EU is committed to cutting greenhouse gases by 20%, producing 20% of primary energy from renewables and reducing energy consumption by 20% - the so-called 20/20/20 package - by 2020.

The plans, on the agenda again in November, have run into serious difficulties among governments and MEPs.

A senior EC official said the package meant a third of Europe's electricity would come from renewables by 2020, with a third of that from wind power - and a third of the wind power from offshore.

The report, based on identified projects, assumes that 68.4 gigawatts of capacity at 118 wind farms will have been established in the North Sea by 2020-30 and could provide 13% of the annual electricity consumption of the seven countries.

A recent European Wind Energy Association strategy paper estimated installed capacity, on land and offshore, could rise to 300GW by 2030 - accounting for 28% of power generation in the EU and a quarter of consumption, saving 600m tonnes of CO2. Yesterday's report using scientific data on wind speeds, suggests that the power output of wind farms could be stabilised within an integrated grid and supplemented by Scandinavian hydropower that can be easily switched on. The variability of wind speeds and, hence, of output has been a drawback of wind power.

"The grid would enable the efficient large-scale integration of renewable energy in the power system across the whole North Sea region," said Frauke Thies, a Greenpeace campaigner. "A dip in wind power in one area could be 'balanced' by higher production in another area, even hundreds of kilometres away."

Greenpeace estimates the cost of the scheme at between €15bn and €20bn but says it would unlock power trading opportunities and cost efficiency. A new 600km-power line between Norway and the Netherlands, it says, cost €600m to build but generates €800,000 in daily trading. It argues that such a scheme, boosted by other renewables such as tidal, wave energy and biomass, would eradicate the need for further investment in coal and nuclear.

But EU officials are sceptical, suggesting that "clean" coal and nuclear are essential. "We don't share the view that these are incompatible with renewables," one said. The growth of wind farms has been held back by planning disputes and the EC and Greenpeace urge greater European co-ordination in developing grids.