France and Spain announced a breakthrough on Thursday (2 March) in a long-running impasse over what would be their first undersea electricity link, a move that will nearly double the power exchange capacity between the two countries – from 2,800 to 5,000 megawatts (MW).

Spanish competition watchdog CNMC and French energy regulator CRE gave the go-ahead to a new cost-sharing deal between the two countries for a project first broached in 2017 after a sharp increase in its estimated cost.

The 400-km-long cable spanning from Spain’s northern coast to France’s western coast through the Bay of Biscay is now estimated at a total cost of around €2.85 billion, above the initial estimate of €1.75 billion, CNMC said.

The European Union will contribute at least €578 million towards the cost, it said.

After discounting EU aid, the distribution of costs will be 54% for Spain and 46% for France. The burden for Spain is slightly lower than what was agreed in 2017, according to a source at the Spanish regulator.

“Despite the increase in project costs, due to an unfavorable context of tension on the raw materials markets, the regulatory authorities have recognised that this project still brings benefits for both countries and more broadly for Europe,” CRE said in a statement.

“This agreement activates, with immediate effect, the continuation of the project,” the statement said.