The European Union is facing a critical investment gap in developing cross-border electricity interconnection capacity. According to estimates by the think tank Ember, nearly 55 gigawatts (GW) of “optimal” interconnection capacity are still missing from current planning, despite the official target of reaching an interconnection level of 15% of installed capacity by 2030.
European funding deemed insufficient
The current support mechanism, Connecting Europe Facility – Energy (CEF-E), with €17bn allocated for the 2028–2034 period, does not cover the requirements of Ember’s recommended scenario. The funding shortfall stands at €30bn. This comes on top of a wider €250bn underinvestment across European transmission networks expected by 2029.
The delay particularly affects peripheral regions such as the Iberian Peninsula, which currently has an interconnection level of only 3%, well below the 15% target, and Central and Eastern Europe, where structural fragility in energy flows remains. The blackout on 28 April 2025 between Spain and France highlighted the potential consequences of these shortcomings.
A security and grid stability issue
The lack of interconnection corridors increases regional price disparities, hampers the integration of renewable sources and heightens the risk of congestion. Transmission System Operators (TSOs) have warned that interconnection capacity plays a critical role in reducing output curtailments and limiting the cost of Power Purchase Agreements (PPAs).
The synchronisation of the Baltic states with the European continental grid in early 2025 highlighted the geopolitical dimension of interconnections, especially in the context of reducing reliance on Russian infrastructure. Several eastern EU members are now investing in the physical protection of critical assets, treating interconnections as part of their national security strategy.
Persistent political and regulatory obstacles
Cross-border projects continue to be hindered by cost-sharing disputes, complex permitting processes and a lack of regulatory incentives. Existing European instruments, such as the Projects of Common Interest (PCI) lists, only address part of the need. National regulators often maintain an ex-post remuneration model, which is not aligned with the anticipatory investments required for renewable integration.
Network operators are struggling to raise the necessary capital without increased support. Institutional investors consider these regulated assets attractive, but remain constrained by regulatory uncertainty and administrative delays. The absence of final investment decisions slows the rollout of priority interconnection projects.
Widening regional disparities
Nordic countries, with significant hydro and offshore wind resources, depend on high-voltage corridors to Germany, the Netherlands and the United Kingdom to export surplus production. In Central Europe, Poland urgently needs strengthened links with neighbouring countries to secure its coal phase-out. Italy, Greece and Spain seek stronger connections with the Balkans and North Africa to import and export renewable electricity.
In this context, several EU member states are calling for a more ambitious European network plan. They are requesting increased subsidies and a more favourable regulatory framework for anticipatory investments, citing supply security as a strategic priority.
