Interconnectors: Geography as Storage

Why Distance Helps

Wind output at two sites fifty kilometres apart is almost the same. At five hundred kilometres the correlation is weak, and at fifteen hundred it is close to zero, because separate weather systems govern each. Aggregating output across that distance produces a combined profile that is far steadier than any of its parts.

The same holds for demand, for different reasons. Peak demand occurs at different local times across a continent, so an evening peak in Spain does not coincide exactly with one in Poland. A cable allows the same generating capacity to serve both peaks in sequence rather than requiring each system to own enough for its own.

Different generation mixes add a third benefit. Norway's hydropower can hold back water when imports are cheap and release it when they are expensive, which makes a reservoir behave as a battery for a neighbouring country without building one. The NorNed and NordLink cables exist essentially for this exchange.

The combined effect is that interconnection delivers several of the services otherwise bought separately - storage, firm capacity, reserve - through a single asset, provided the weather and demand patterns on either side genuinely differ.

Why the Long Ones Use Direct Current

Alternating current works well across a national grid and poorly across a very long link. Its voltage alternates, which causes the line's own capacitance to charge and discharge continuously, and over long distances - especially in a submarine cable, where conductors sit close together in seawater - that charging current can consume the cable's entire capacity before any useful power is delivered.

Direct current has no such problem. Once converted, power flows without charging losses, so the practical length limit disappears. The trade-off is that converter stations at each end are expensive, which makes high-voltage direct current uneconomic for short distances and increasingly attractive beyond roughly six hundred kilometres overhead, or a few tens of kilometres under water.

Direct current has a second advantage that matters between countries. Two alternating-current grids can only be joined directly if they are synchronised - locked to the same frequency and phase. A direct-current link does not require this, so it can join systems that are not synchronised at all, and it does not propagate a disturbance from one side to the other. That isolation is a reliability benefit as well as a practical one.

Modern converters use voltage-source technology, which can control reactive power and support the voltage on each side independently, and can black-start. These are the links now being built at scale: multi-gigawatt cables of several hundred kilometres connecting offshore wind, or crossing seas between national markets.

What They Do to Prices

Power flows from the cheaper market to the more expensive one, which raises prices slightly in the exporting market and lowers them in the importing one. Over time connected markets converge, and the frequency of extreme prices in either falls.

This is a clear gain overall and creates identifiable losers, which is the source of most political friction. Consumers in a low-price country see prices rise, and their governments hear about it. Generators in a high-price country see their margins compressed. Both effects are real, and both tend to be argued as though the interconnector had caused a shortage rather than shared one.

The revenue from the price difference - congestion rent - accrues to whoever owns the cable, and how it is allocated determines whether the link gets built. Regulated links socialise the cost across network charges and return the rent to consumers. Merchant links are financed against expected congestion rent, which means the investor profits most when the price gap stays wide, an incentive regulators watch carefully.

The measurable benefit shows up in curtailment statistics. A region whose surplus previously had nowhere to go exports it instead, and the energy that would have been discarded is used. For systems with large wind resources at their geographic edges, interconnection is often the cheapest single intervention available.

Why There Are Not More of Them

The engineering is mature. What is hard is everything else.

Cost allocation comes first. A cable between two countries benefits both unequally, and the split of construction cost has to be negotiated between regulators with different mandates and different consumers to answer to. These negotiations routinely take longer than construction would.

Consent is second. The cable itself is invisible under water, but the converter stations and the onshore lines connecting them to the grid are not, and they meet the same local opposition as any large infrastructure. Several European projects have been delayed for a decade or more at the onshore stage alone.

Third is the security argument. A country importing a substantial share of its electricity depends on a neighbour's goodwill and on a single asset that could fail or be damaged. The Baltic states disconnecting from the Russian-controlled synchronous grid in 2025, and the damage to cables in the Baltic Sea, moved this from theory to operational planning. The counter-argument is that isolation has its own failure mode: a weakly connected system has nothing to draw on when it is short, which is part of what made the Iberian blackout of 2025 so complete.

The resolution most system operators reach is that interconnection should be substantial but not total - enough to share surpluses and reserves, not so much that a system cannot stand alone if it has to. Where that line sits is a political judgement informed by engineering, and it is drawn differently in each country.