OSLO- Available capacity on cross-border electricity connections linking Norway to its neighbours will gradually return to normal after outages curbed earnings potential for producers this year, Norway's grid operator Statnett said on Thursday.

Repairs to the 1,632 megawatt (MW) Skagerrak subsea cable, connecting Norway and Denmark, will be completed at the start of October, with full exports from Norway to Denmark possible from the middle of next month, the operator said.

"It's good news for security of supply through the winter and for the players in the Nordic power market that the opportunities for power trading with our Nordic neighbours is now nearing normal levels," Gunnar Loevaas, Statnett's head of market and system operations, said in a statement.

Capacity in the other direction would remain curtailed for the time being for technical reasons, Statnett said.

Imports from Sweden to southern Norway would normalise from Sept. 28, but the flow in the other direction would remain reduced until December, the operator said. A 700-MW link to the Netherlands has been back in normal operation since early September, Statnett added.

"We understand that the sum of incidents has contributed to many Norwegian power producers receiving lower earnings," said Loevaas.

In August, Norway' largest power producer, Statkraft STATK.UL , reported a loss of 100 million Norwegian crowns ($10.46 million) for the second quarter after making a 2.7 billion crown profit a year earlier.

Power prices in southern Norway have averaged 8.16 euros per megawatt hour (MWh) so far this year, compared with 23.33 EUR/MWh in southern Sweden and 23.67 EUR/MWh in western Denmark.

Norway, Denmark, Sweden, Finland, Estonia, Lithuania and Latvia form the joint Nordic power market area, which is divided into 15 bidding zones that settle local prices in addition to a system price for all zones.

($1 = 9.5585 Norwegian crowns)

(Reporting by Nora Bulli Editing by Tomasz Janowski) ((Nora.Buli@thomsonreuters.com; (+47) 21 04 05 56; Reuters Messaging: nora.buli.thomsonreuters.com@reuters.net))