The French and Spanish energy regulators Commission de Régulation de l’Energie (CRE) and Comisión Nacional de los Mercados y la Competencia (CNMC) have agreed on the distribution of the financing of the Biscay power interconnection project between France and Spain, whose costs have been reevaluated upward.
The Bay of Biscay project, agreed in 2012, would consist of two independent submarine electricity links of 1,000 MW each, laid in the Bay of Biscay, between Gatica (near Bilbao, Spain) and Cubnezais (near Bordeaux, France). The project was declared a project of common interest (PCI) by the European Union in 2013. The project should be commissioned in 2028, nearly doubling the interconnection capacity between the two countries from 2.8 GW to over 5 GW.
The project was estimated at €1,750m in 2017, half of which would be financed by each partner, with potential cost increases financed by the Spanish transmission system operator (TSO) REE (62.5%) and its French counterpart RTE (37.5%). However, due to unfavourable market context and surging component prices (cables and conversion substations), the estimated total cost has soared to €2,850m, with a risk envelope of €250m. Partners have decided to invest €1,195m each in the project; additional costs between €2,390m and €2,700m will be supported by REE (62.5%) and RTE (37.5%) and extra costs above €2,700m will be financed on a 50:50 basis. Despite rising costs, the project is still considered as beneficial for the two countries and for Europe and it should receive a €578m support from the Connecting Europe Facility (CEF), of which €350m will be granted to RTE.