Connecting the French and Spanish electricity markets

The European power markets are developing rapidly but at the same time power transmission grid upgrades and additional cross-border interconnection capacity are needed to fulfil internal market efficiency and security of supply objectives. This has been the case particularly in the cross-border power transmission between France and Spain.

The project has a long history that started at the end of the 1970s when the need for a new interconnection (in addition to the one built in 1955) was first identified. New transmission capacity was built in 1982, but due to rapidly strengthening demand, the interconnection was congested 95% of the time by 2007-2009. Thus, in a difficult local and environmental context, new transmission capacity was urgently called for and the new EIB co-financed project turned out to be the most appropriate response to this call.

The project was to build a High-Voltage Direct Current underground cable link, to meet local acceptance and environmental criteria, with length of 64.5 km, interconnecting France (Baixas, near Perpignan) and Spain (Santa Llogaia, near Figueres) across the Pyrenees. The cables were installed underground with the exception of the section of the route crossing the Pyrenees (Massif des Albères), where the cables were laid in a tunnel with a length of 8.5 km and inner diameter of 3.5 metres.

The promoters of the project were RTE and REE, the national transmission system operators of France and Spain. The project was implemented by a joint venture company between RTE and REE, called Inelfe. Inelfe was responsible solely for project implementation; after project completion the ownership of the project was transferred to RTE and REE in equal proportions.

The financing of the project involved a EUR 325 million loan from the EIB, accounting for 48% of the total project investment cost of EUR 672.8m. The project was designated as TEN-E priority project of European interest (EL.3.) and it was granted a EUR 225 million Community fund under the European Energy Programme for Recovery.

The rationale for the EIB’s involvement in this project was that it contributed to the EIB’s lending priority policy on security and diversification of internal supply (including TEN-E projects).

The project doubled the electricity transmission capacity of the whole France–Spain border, thus truly improving diversification and security of supply and enhancing electricity market integration in south-west Europe. The average net transfer capacity of the France–Spain border increased from around 1 000 MW in both directions for the period 5/10/2014 – 4/10/2015 to around 2 000 MW for the first year of operation. Thereafter the net transfer capacity has progressively reached the target value of 2 800 MW.

During the first year of operation, the energy exchanged via the new HVDC line built under the project was in line with expectations at around 15.2 TWh (12.4 TWh from France to Spain and 2.8 TWh from Spain to France).