Additional costs and time for a France-Spain electrical interconnection project – 2023-03-02 at 21:00


Energy regulators in France and Spain announced on Thursday an agreement raising the cost of a major electricity interconnection project between the two countries from 1.75 billion euros to 2.85 billion.

The commissioning of this project initially planned for 2025 has also been postponed to 2028, according to these authorities.

An agreement between the Comisión Nacional de los Mercados y la Competencia (CNMC) and the Energy Regulatory Commission (CRE) was adopted on Thursday to “review the distribution of funding for the Bay of Biscay electrical interconnection project”, specify the two authorities in a joint press release.

Initial estimates predicted a cost of 1,750 million euros in 2017, when the first financing agreement was signed.

Due to an “unfavorable” market, the prices of the main components of these future links have since increased sharply, in particular for direct current cables and for converter stations, add CRE and CNMC.

According to them, the expected benefits have also increased “due to the evolution of forecasts for the energy mix and electricity consumption in European countries, in a context of accelerating energy transition”.

“Current forecasts now show a projected cost of 2,850 million euros, together with a risk envelope of 250 million euros,” explain the two authorities.

This 400 kilometer power line project, three quarters underwater, carried by the French network manager RTE and its Spanish counterpart REE, should link Gatica, in Spain, to Cubnezais (Gironde) in France.

It benefits from a European grant from the Connecting Europe Facility (CEF) of 578 million euros.

French Minister for Energy Transition Agnès Pannier-Runacher welcomed the agreement reached on Thursday, saying that the project should “increase exchange capacities (of electricity between the two countries, nldr) from 2.8 to 5 GW”.

“It will be a key infrastructure for security of supply and Franco-Spanish decarbonisation. It is thanks to the Europe of energy and the integration of our markets that we can move forward together”, he said. she added in a statement sent to AFP.

“Despite the increase in project costs, due to an unfavorable context of tension on the raw materials markets, the regulatory authorities have recognized that this project is still beneficial for both countries and more broadly for Europe” , say the CRE and the CNMC.

“The estimated reference cost of the project, now set at 2,390 million euros, will be distributed between the network managers before any subsidy at the rate of 50% for REE and 50% for RTE”, is it specified in the dedicated part to the allocation of cross-border costs. The distribution must change if the costs exceed this reference amount.

The breakdown of costs between RTE and REE is developed in a decision published on the CRE website and also provides for provisions in the event of an increase in the European subsidy.

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