Why is Spain considered an energy island?

Spain has been an energy island on the European electricity map for decades. This is not due to a lack of energy, but to insufficient connections: according to Red Eléctrica, the exchange capacity with France is around 3 GW, which places the interconnection ratio of the Iberian Peninsula with the rest of Europe at just 2%, a figure that the EU considers insufficient.

We explain everything you need to know about electricity interconnections in Spain and why it is considered an energy island.

What does it mean to be an energy island?

An energy island is a territory that has few electricity interconnections with other countries or neighbouring electricity systems. The term does not refer to a geographical island, but rather to functional isolation.

And what are electricity interconnections? They are the network of high-voltage lines and substations that enable the exchange of electricity between neighbouring countries, making it possible to strengthen the grid and provide greater security of supply. 

With these connections, an electricity system gains strength: it can rely on neighbouring countries in the event of unforeseen circumstances, export its surpluses when it produces more than needed, and import electricity when required. Without them, it operates more independently, which can limit efficiency and the ability to integrate into a broader market.

Why is Spain an energy island and what interconnections does it have?

Spain is electrically interconnected with Portugal, Morocco, and the European grid through France. However, it is considered an energy island due to its limited interconnection with Europe.

The connection between Spain and Portugal forms the Iberian Electricity Market (MIBEL). The link with Morocco provides a connection with North Africa. However, the gateway to the continental electricity system is through France, and this is where exchange capacity is considered insufficient in relation to the size of the Spanish system.

Meanwhile, the Central European system is connected to the Nordic countries, Eastern Europe, and the British Isles, forming the largest interconnected electricity system in the world.

Interconnections between electricity systems help guarantee security of supply, as they improve the efficiency and competitiveness of electricity markets and facilitate the integration of renewable energies. However, Spain does not reach the minimum recommended by the European Union. We explain why.

Why are we below the minimum recommended by the EU?

The European Council, in its conclusions of 23 and 24 October 2014, agreed that the Commission should take urgent measures to ensure a minimum electricity interconnection ratio of 10% by 2020 at the latest. 

Subsequently, the Commission Communication of 23 November 2017, "Strengthening Europe's energy networks", proposed increasing this target to 15% by 2030, meaning that each Member State's interconnection capacity should equal at least that percentage of its installed generation capacity. Spain, due to its geographical position at the edge of the continent and the Pyrenees acting as a natural barrier, has not reached these thresholds.

The data does show, however, that Spain already exports more electricity than it imports. According to the 2025 Electricity System Report by REE, the country ended 2025 as a net electricity exporter for the fourth consecutive year, accumulating 50 consecutive months in this position. During 2025, 26,206 GWh were exported and 13,202 GWh were imported, leaving a net export balance of 13,004 GWh.

By border, the exchange with Portugal was export-oriented for the seventh consecutive year, with 9,184 GWh. With France, however, the balance was neutral, with only 138 GWh imported. With Morocco, Spain was once again a net exporter for the fourth consecutive year, with 3,743 GWh.

Measures for Spain to stop being an energy island

In Spain, the development and maintenance of the electricity transmission grid, including international interconnections, is the responsibility of Red Eléctrica, a company belonging to the Redeia group. 

To strengthen international connections, a new interconnection with France through the Bay of Biscay is being built, with commissioning expected in 2028. 

With a length of 400 kilometres (300 of them submarine), it will be the first submarine interconnection between Spain and France and will almost double the current exchange capacity, from 2,800 to 5,000 MW. The project is classified as a Project of Common Interest by the EU.

European regulatory framework. On 10 December 2025, the European Commission presented the "Grid Package", a set of legislative proposals aimed at promoting the development of the infrastructure needed to achieve the EU's climate and energy objectives. 

The measures include the revision of the TEN-E Regulation and the "Energy Highways" initiative, which aims to create genuine electricity highways on a continental scale.

These reinforcements in international interconnections must go hand in hand with investments in Spain's transmission grid to meet the demand emerging downstream in distribution networks.

Currently, there is congestion in the electricity grid that prevents all demand from being covered and affects all sectors of the economy. Electrifying demand would help reduce dependence on fossil fuels.

What consequences does being an energy island have on electricity prices?

Greater interconnection capacity between an exporting region and an importing region increases cross-border electricity trading: more supply for the importing market and more demand for the exporting one. In both cases, the system becomes more efficient and prices tend to converge between countries, reducing differences between markets.

In Spain's case, the expansion of renewable energy has had a clear impact on prices. According to the 2025 Electricity System Report by REE, Spanish wholesale electricity market prices were the third lowest in Europe in 2025, behind only the Nordic countries (Norway, Sweden, Denmark, Finland, and the Baltic countries) grouped within Nord Pool (€39.70/MWh) and France (€61.07/MWh). Spain also recorded the lowest electricity prices on the continent in April, May, and November.

The limitation caused by being an energy island is not reflected in the prices paid by Spanish consumers, but rather in the ability to transfer this low-cost energy to the rest of Europe.

With more interconnections, Spain could export its renewable energy surpluses, strengthening its position as a net exporter of clean energy on the continent.