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France, Spain & Portugal Receive Largest EU Award Ever for Joint-Energy Infrastructure Project

Last month leaders from France, Spain and Portugal met in Lisbon in an effort to link up the Iberian Peninsula to the European electricity grid. Along with substantial help from the EU, the three agreed to finance a 370km underwater power line that will double the capacity exchange between these neighbours by 2025.

In late July, French President Emmanuel Macron and Spanish Prime Minister Pedro Sánchez were hosted by Portuguese Prime Minister Antonio Costa in Lisbon for the group’s second Energy Interconnections Summit, where they agreed to build an undersea power line in the Bay of Biscay. The trio teamed up to integrate the Iberian Peninsula more fully into Europe’s energy mix, and increase the ease at which all three countries segue into a clean energy future.

Also present at the meeting was Vice-President of the European Investment Bank (EIB), Emma Navarro, who ensured the European Commission’s commitment to finance 30 percent of the project, which equals out to circa 578 million euros. This is an unprecedented amount of funding from the EU for an energy infrastructure project, and highlights the bloc’s support of a more fully energy-integrated Union.

The project, which is scheduled to start operations in 2025, is projected to double the capacity for electricity exchange between France and Spain — a gap that seriously needs filling. Spain and Portugal’s geographic positioning, coupled with a lack of interconnection capacity within Europe, has left them out the EU’s electricity market for years. According to the European Commission, only six percent of Spain’s electricity is currently interconnected with the EU, putting the country far behind the 15 percent interconnection target set by the EU’s Governance of the Energy Union.


The Iberian Peninsula is the second largest peninsula in Europe, after the Scandinavian Peninsula. It is comprised of Spain and Portugal, as well as Andorra, a small portion of France’s southern tip, and Gibraltar. Copyright: Seven Maps7/Shutterstock.com

EC President Jean-Claude Juncker lauded the decision, which he deemed a symbol of regional unity. “By agreeing on steps forward to complete the energy interconnections between France, Portugal and Spain…we are strengthening the security of energy supply across Europe, and delivering on our promise to make Europe number one on clean energy and renewables. The world looks to us for leadership in these turbulent times. Let’s show just how much unity can achieve”.

The integration of the Iberian Peninsula into Europe’s internal energy market has become a larger priority since Juncker took office. He believes resolving this isolation issue will improve overall European energy security and spur energy market growth, thus, creating jobs and more stable economies.

The creation of the power line will also open up the possibility for Portugal, which has a surplus of electricity production (thanks in large part to its robust renewables market), to export its supply to Europe via Spain and France. The country become the first in history to have its renewable energy production surpass 100 percent of its electricity demand, running entirely on clean energy for more than 24-hours back in March.

As both Portugal and Spain continue to develop their clean energy markets, they see natural gas as a stopgap resource to a fully renewable future, as does their partner France. The trio is confident that the new power line will allow them to be more intertwined in Europe’s gas network. As of now, Portugal and Spain import a substantial portion of their gas from Algeria via a pipeline that became operational in 2011. They also have several ports where they import gas from countries as diverse as Qatar to the United States. Adding these energy channels to Europe’s gas market will lower the heavy proportion of gas it purchases from Russia (currently 69 percent of all EU gas consumption), giving the bloc more energy security and thus, political bargaining power.

The underwater power line in the Bay of Biscay is just one of many projects that the Southwest corner of Europe has set its eyes on. In addition to the completed pipeline along the west of the Pyrenees Mountain range between Spain and France, Spain is also hoping to build an another pipeline to France through its northeast Catalonia region. However, projected high costs and a lack of certainty around cost effectiveness are holding the French back, for now. Macron cautioned that the group “will only build more pipelines if gas consumption in Europe remains significant”. Hesitation remains given that other European countries have fully built liquefied natural gas ports that are not operating at full capacity. The French president said the idea could take more hold in a scenario where coal use was increasingly diminished and gas demand increasing, a goal his country is closing in on as they continue to phase out all coal production by 2022.

For now, all three leaders seemed content to settle on what will be a breakthrough connection for the Iberian Peninsula, and for the betterment of European energy security at large. It’s “a very important step”, said Portuguese Prime Minister Antonio Costa, towards what will certainly be a more independent energy future for Europe.

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Mary Reed Davis

Mary is a writer focused on economics, energy resources, and international politics and serves as the managing editor of online content for the South EU Summit Magazine. She holds an MA in International Economics from Johns Hopkins University School of Advanced International Studies (SAIS) and worked in China for five years as a journalist before relocating to Europe. She currently lives in Italy with her husband.

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