The capacity for electricity exchange between Spain and France will increase from the current 2,800 MW to 8,000 MW by 2020, according to the Madrid Declaration signed today by French President François Hollande; Spanish Prime Minister Mariano Rajoy; Portuguese Prime Minister Pedro Passos Coelho; and European Commission President Jean-Claude Juncker. The document emerged from the Energy Interconnections Summit held this Wednesday in Madrid, which was also attended by European Investment Bank President Werner Hoyer.
The conclusions of the October 2014 European Council highlighted the need to mobilize all necessary efforts to achieve the minimum target of 10% for electricity interconnections in all Member States no later than 2020, through the implementation of projects of common interest—a complex undertaking in Spain, as the country’s interconnection level is below 5%, a situation similar to that of Portugal.
International interconnections are the network of transmission lines and substations that enable the exchange of electricity between countries, providing a number of benefits to the connected countries by ensuring greater reliability and stability in the power supply.
In 2001, the EU recommended that member states achieve an interconnection ratio of 10% by 2020—defined as the sum of import capacity divided by installed generation capacity— with the aim of promoting a single electricity market and preventing the isolation of member countries.
For this reason, at the October 2014 European Council, the Member States and the European Commission committed to «facilitating the implementation of projects of common interest that connect, in particular […] Spain and Portugal to the rest of the internal energy market» and to «ensure that the infrastructure necessary to achieve the set objectives is given the highest priority and is completed by 2020.».
For this reason, the Madrid Declaration states that, in order to fulfill this mandate, the development of such infrastructure must secure all available support at the European level, in particular through the Connecting Europe Facility, the Structural Funds, and the European Fund for Strategic Investments recently announced by the European Commission and the European Investment Bank.
The recent inauguration of the new power interconnection line between Spain and France on February 20—which doubles the interconnection capacity between the two countries to 2,800 MW—brings us closer to achieving these goals.
However, the leaders of Spain, Portugal, and France, along with the European Commission, note that «a complementary effort must be made to exceed the current level of interconnection in Spain—which stands at around 5% with France and Portugal combined—achieved with this new line—and reach the aforementioned target of 10% in each country.».
They stress the importance of completing the power interconnection between Portugal and Spain, linking Vila Fria-Vila do Conde-Recarei (Portugal) and Beariz- Fontefría (Spain), which, once completed, will enable Portugal to reach an interconnection level of 10%.
In addition, they emphasize the need to significantly increase capacity between the Iberian Peninsula and continental Europe and warn that the projects currently included on the list of Projects of Common Interest (PCI) are by no means sufficient to achieve European interconnection goals.
NEW PROJECTS
For this reason, they are requesting that new projects be identified for inclusion in the upcoming 2015 PIC list in order to increase the electricity exchange capacity between Spain and France to 8,000 MW by 2020.
To achieve this, they cite the Bay of Biscay projects—already included on the list of Projects of Common Interest—for connecting the Bay of Biscay/Gulf of Gascony in Spain with the Aquitaine region in France, with a current estimated cost of 1.9 billion euros.
This project is currently in the technical study phase and is receiving full funding under the 50% program for all eligible costs in accordance with the Connecting Europe Facility, for a total of 3.25 million euros.
In addition, two new projects crossing the Pyrenees are expected to bring the level of interconnection between France and Spain to around 8,000 MW. The first project would run through Cantegrit and Navarre or the Basque Country, and the other through Marsillon and Aragon, with current estimated costs for each ranging from 900 to 1,200 million euros.
With regard to gas interconnections, they propose an active assessment to complete the eastern gas corridor between Portugal, Spain, and France, which will enable bidirectional flows between the Iberian Peninsula and France through a new interconnection project, currently known as MIDCAT. «The third interconnection between Portugal and Spain must be developed accordingly,» they add.
Furthermore, given that they consider it essential to increase transmission capacity through France in order to make the most of interconnections and enable the full integration of the European market, «and emphasizing the commitment that the «Val de Saône» project will guarantee Spain and Portugal’s access to the European gas market, this project will also enjoy the support of European and national authorities and will receive financial support at the European level, such as the Connecting Europe Facility, the European Structural and Investment Funds, and the European Fund for Strategic Investments,» the statement says.
Prices will go down, and we'll overcome obstacles
Prime Minister Mariano Rajoy argued on Wednesday that the Summit on European Energy Interconnections, at which Spain, Portugal, France, and the European Commission signed the so-called Madrid Declaration, represents «a very important step» toward «overcoming borders» and ensuring that citizens have «energy in their homes at a lower price.».
Rajoy made these remarks during a press conference held at the Moncloa Palace alongside European Commission President Jean-Claude Juncker; French President François Hollande; and Portuguese Prime Minister Pedro Passos Coelho. Also participating in the event were European Investment Bank (EIB) President Werner Hoyer and Commissioner for Climate Action and Energy Miguel Arias Cañete.
«Today, three of Europe’s greatest and oldest nations, together with the European Commission and the EIB, are taking a very important step toward overcoming borders,» Rajoy argued, noting that this is «our shared destiny—to unite and connect«—and emphasizing that there is «political will» to «do away with» national borders.
The Prime Minister highlighted the importance of this agreement «for everyone here today and for Europe,» so that companies can «gain access to a resource that is essential to their competitiveness,» for the environment because it will enable the development of renewable energy, and »above all, for the citizens.» «Energy will reach their homes at a lower price, improving their well-being,» he emphasized.
«We’re launching a plan—we’re calling it the Madrid Declaration—but we’re moving from declarations to action, from inspiration to implementation,» he emphasized, pointing to the goal of having electricity interconnections reach a minimum of 10% of installed capacity by 2020.
Speaking before his European counterparts, the head of the Spanish government noted that «never before has the Iberian Peninsula made such a qualitative leap forward in the field of energy,» although previous governments had worked «hard and well.».
Requests to Juncker
Rajoy told Juncker that the interconnection project «fits perfectly» with the EU investment plan that bears his name and to which, he noted, Spain will contribute 1.5 billion euros through the Official Credit Institute (ICO).
Speaking to the President of the European Commission, Hollande stressed that «it is important for Europe to mobilize funding.» He even joked—in response to Juncker’s serious expression—that «it’s really bad to have a plan named after you» if it goes wrong, although it could also be «a real publicity stunt.».
«It was a message that all of Europe had been waiting for, but it has to be put into practice through the projects we are going to present,» said the French Socialist leader, an advocate of stimulus policies over austerity.
In this regard, the Portuguese prime minister lamented that, so far, «nothing more has been done than announcing goals that have not been put into practice.» «Today, things are different not only because of the commitment of the three parties, but also because of the European Commission’s commitment,» he acknowledged. «The Commission’s role in monitoring the process is essential,» he noted.
Passos Coelho, who highlighted the «commitment of three major countries» on this issue, emphasized—as Rajoy did—that the agreement «will result in lower prices for consumers,» investments in renewable energy, and greater sustainable and green growth.
Juncker replied to the three European leaders that the agreement marks «the end of the Iberian Peninsula’s energy isolation» and urged them to ensure that the agreement «does not remain mere rhetoric,» but rather «is truly achieved.» «I call on others to put an end to the obstacles that arise in the energy sector,» he said.
«The EU is based on four principles: the free movement of workers, capital, and goods—and the free movement of energy should be another,» he said. «If we don’t ensure that it can flow freely, we will have failed,» he warned, identifying energy policy as «one of the top priorities.».
