The Öresund Bridge is a TEN-T flagship. What about the TEN-E lines that move electricity and gas around the continent?
Crawl through a tunnel 8.5 kilometres long under the Pyrenees and you will be following the trail of energy integration’s future. The tunnel is part of a 63-kilometre interconnector that carries electricity between Santa Llogaia, near Figueres in Spain, and Baixas, close to Perpignan in France. Completed in 2015, this collaboration between RTE and REE, the French and Spanish electricity transmission system operators, doubled the electricity exchange capacity between the Iberian Peninsula and the rest of Europe to 2 800MW. The benefits flow in both directions through the exchange of surplus renewable generation from wind and hydro, and more efficient use of gas and nuclear plants, creating greater security of supply. The project was the first line to cross a European border using innovative high-voltage direct current technologies that offer big advantages over traditional techniques. The cables are lighter and easier to install and the converters make for more flexible operation of the interconnector. Almost half of its EUR 721 million cost was funded by the EIB.
Energy infrastructure is capital intensive. But its development is key for the EU, so that energy markets can be integrated and energy and climate goals met. It’s also a crucial prerequisite for EU economic strategy, which aims to enable consumers to benefit from new technologies and smart, efficient energy use. The benefits of full market integration by 2030 have been put at EUR 30 billion per year for gas markets and as much as EUR 40 billion a year for electricity markets, according to a study carried out for the European Commission. The EIB has extended loans of EUR 19 billion to EU Projects of Common Interest contributing to the integration of energy markets since 2000, of which EUR 7.4 billion enhance cross-border electricity transmission capacities and EUR 11.6 billion are for gas transmission. Support for the construction of infrastructure is the Bank’s main role in this vital sector. The EIB invests in projects that support growth, energy security, and the sustainability of energy production and use in European markets. “These are all efforts to guarantee everyone access to affordable, clean, resilient and sustainable energy systems,” says Nicola Pochettino, head of the EIB’s electricity networks division.
While the EU works to harmonise different national energy regulations, the EIB’s work allows countries to put them into effect. You can give consumers and businesses the right to do something, but if you don’t build the pipes and cables to enable them actually to do it, the benefits will obviously never accrue. This is a vital consideration in areas of Europe which have been less integrated. After the Santa Llogaia-Baixas connection, commercial exchange capacity between Spain and France doubled, though further interconnectors need to be developed to meet EU targets.
Interconnections that drive down prices
The impact of such projects is tremendous in southern Europe. For the Baltic States it is even more significant, because they remain part of the old power systems of the Russian Federation and are highly dependent on Russian gas supplies. In the current political situation, that is a risk to their energy security. The EIB is funding a number of projects to integrate the Baltics fully into the EU’s internal market. In Klaipėda, the EIB financed a liquefied natural gas import terminal and the gas pipeline that connects it to Lithuania’s gas network. The terminal and the pipeline make Lithuania less dependent on Russian gas, in this case because it can be supplied by sea. Further investment in the gas network pipelines, including the EIB-financed 110-kilometre pipeline between Klaipėda and Kursenai in Lithuania, moves towards ensuring that Latvia and Estonia can also benefit from an alternative to Russian gas. The competition from the new supply option has been key in driving a 20% reduction of Russian gas prices to Lithuania.