South West Europe - The New Energy Frontier
Leaders of France, Spain and Portugal accompanied by European Commission President Jean-Claude Juncker met on Wednesday evening in Madrid to sign a series of commitments to strengthen electricity and gas interconnections. This was a first step towards the implementation of the EU Energy Union plan announced by the Commission last week.
"If there was an interconnection between Spain and the rest of Europe, Europe's vulnerability and dependence on Russian gas would decrease," said Spain's Industry and Energy Minister Jose Manuel Soria.
For years if not decades, Spanish authorities have pushed for deeper energy interconnections with France and the rest of the continent. Spain and the entire Iberian Peninsula would ultimately benefit from the EU increasing dependence on Russian gas, reinforced by the rising tensions in Ukraine and all over Eastern Europe and the political will of the new European Commission.
If all parties deliver, Spain and Portugal may no longer be an energy island in Europe. The slow decline of nuclear energy worldwide forces France to diversify its sources of energy as well. “We must secure the diversity of our energy supply,” French President François Hollande said during a press conference following the summit.
Electricity Interconnections
In the joint statement, all participants agree on setting up a High Level Group for South West Europe tasked with identifying and implementing infrastructure projects.
The Commission will conduct a study “on the benefits, costs and the technical options for further electricity interconnections between the Iberian Peninsula and the rest of Europe,” according to the press release, with results expected mid-April. Current and already planned projects will have to be built on time.
A new high-voltage line between Santa llogaia and Baixas was inaugurated on February 20th to double the interconnection capacity with France from 1.4 to 2.8 megawatts. Way too far from the 10% target set by the European Council for 2020 and possibly 15% by 2030. Both countries agreed on three additional lines to reach 8.000 MW at that time.
The subsea Biscay Bay project between the Gascoigne Bay (Spain) and the Aquitaine area (France) should be able to double the interconnection capacity to reach 5.000 MW and balance the electricity flow between the eastern and the western parts of the border and two other projects.
The cost is close to €4 billion including €1.9 billion for the Biscay Bay Project. One of the main issues of the summit is whether Europe has the money that can match with an ambitious but needed energy plan. “Europe's financial support is absolutely necessary,” Hollande said. This project “should benefit from significant financial support at the European level” but the official declaration did not provide further details.
Other projects will be funded by the states with the help of the European Union thanks to the Connecting Europe Facility investment program, Structural Funds and European Fund for Strategic Investments. This was announced in last weeks vast Energy Union plan.
The rebirth of MidCat
France along with Spain and Portugal are committed to strengthening an Eastern gas axis to secure the supply across Europe and take opportunity to reduce the energy bill for consumers in the Iberian Peninsula, which is 40% higher compared to France.
An old gas interconnection project known as MidCat would finally be launched linking the wealthy region of Catalonia with Southern France as well as a third interconnection between Spain and Portugal. "We are going to start the necessary studies to see how we can move on the second phase of this project," said Francois Hollande.
The High Level Group will evaluate its viability and the compatibility over the next six months along with an evaluation of energy needs as part of an overall study of gas infrastructure projects. Then, the group could speed up the procedure and MidCat as a priority to get EU funds.
Green connections?
French President François Hollande also said before reporters that the development of new electricity and gas connections with Spain was actually good news for the environment.
Because Spain and Portugal are still disconnected to European suppliers, they had to develop renewables energy to satisfy their needs. Green energy represents 25%of energy uses in Portugal and 17% in Spain. New connections with France could present a large opportunity for both countries to boost their exportations into the European market.
Kevin Bonnaud