The turn to the right in Portugal leaves the fruitful collaboration between Sánchez and Costa up in the air |

On the left, the Prime Minister of Portugal, António Costa, and the President of the Government, Pedro Sánchez, at a Spanish-Portuguese summit.Álvaro Ballesteros (Europa Press)

“Sánchez and Costa have very successfully represented the interests of their countries,” admitted the German Chancellor, Olaf Scholz, at the end of the European Council in which the two socialist leaders of the Iberian Peninsula had overcome the resistance of their German colleague and They achieved the Iberian exception in the European energy market. That moment, in March 2022, was when it was most clearly seen that the alliance between Madrid and Lisbon had worked and could achieve results. Whether the coalition will continue with the Government that is elected after the Portuguese elections last Sunday is still unknown. But what does seem clear is that there will be asynchrony in the political color and that it will be difficult to achieve the harmony of the two social democratic leaders of southern Europe who already in 2019 had tried a coordinated action in the distribution of positions after the European elections .

The Spanish-Portuguese entente that leaders António Costa and Pedro Sánchez have exhibited has not been a constant since both countries entered the EU in 1986, which was then called the European Economic Community. In those initial years, when Madrid tried to renegotiate some of the harsh entry conditions that they had had to assume, it found that Lisbon did not support it or distanced itself, according to Javier Elorza, head of the Spanish delegation to the EU between 1994. and 2000 and even before number two of that representation, in his book A pike in Flanders. The situation was redirected, although the Iberian action in Brussels has not been comparable to the coordination that the Benelux countries have had (Belgium, the Netherlands and Luxembourg) or that of the so-called Visegrad group (Hungary, Czech Republic, Slovakia and Poland).

That has indeed been seen with Sánchez and Costa in recent years. There has been some discrepancy, as happened in some moments of the negotiation of the reform of the Stability and Growth Pact. But overall, there has been more coordination than usual. For example, when the then first vice president of the Spanish Government and Minister of Economy, Nadia Calviño, presented her candidacy to preside over the European Investment Bank (EIB) last summer she only received public support from Portugal from the beginning.

But if the Madrid-Lisbon alliance has shone in any field in recent years, it has been energy, nothing similar in transportation, with the AVE between the two capitals eternally waiting its turn. The combination of price crises and isolation from the rest of Europe has led the two countries to strengthen ties even more. The Iberian exception made it possible to completely decouple the price path of the peninsula from that of the rest of the EU. Known in its early stages as a gas cap, by setting a maximum ceiling on the remuneration of combined cycle plants – in which this fuel is burned to generate electricity – and, therefore, especially the electricity market, it was a tool essential to reduce the pressure of electricity prices on Spanish and Portuguese companies and households. In Spain alone – of the two countries, by far the one that pushed the most for the measure – the savings were around 5,000 million euros in just half a year.

Beyond the economic, the Iberian exception was, above all, a political success of the collaboration between Sánchez and Costa. Without this cooperation it would have been impossible to carry it forward in the arduous summits of heads of State and Government in that Brussels in the spring of 2022, in which the prices of gas and electricity reached unaffordable levels. The joint press appearance, after the Spaniard managed to get up from the table in the face of the German and Dutch resistance – for whom any path that deviated even slightly from orthodoxy was little less than anathema – was the best proof that the alliance Ibérica was more solid than ever.

That is now history: both the Sánchez-Costa unity, which after last Sunday’s elections explodes into the air; such as the Iberian exception, deactivated by the drastic drop in the price of gas and whose extension as insurance against future increases has been denied by the Community Executive.

Against electrical insulation

There are, however, other energy sections in which the agreement between Madrid and Lisbon is still alive. While waiting for the steps taken by the new Portuguese Government – ​​which will almost certainly be led by the conservative Luís Montenegro – the alliance between both capitals has also been extended to another key area: interconnections. Both capitals have struggled, with much less success than with the Iberian exception, to leave behind the everlasting isolation of their electrical sector with new cables through the Pyrenees. The French resistance, on the other hand, continues to block an initiative that would allow the increasingly unaffordable renewable generation to be released during the central hours of the day.

In 2027, when the only new agreed line, that of the Bay of Biscay, will come into force, the level of interconnection between the Spanish and French electrical systems – the only possible link with the rest of Europe – will be only slightly above 5%. , far from the current 2.8%, but also light years away from the community objective: 10% in 2020 and 15% in 2030. This battle has a similarity with that of the Iberian exception: Spain is the party most interested in it moving forward. , but both countries have—and will continue to have—the double common objective of avoiding the waste of clean energy in the increasingly longer time slots in which photovoltaic production is off the map and increasing their export volume in an area in which the balance had always been the other way around.

The other major pending interconnection is that of hydrogen, an energy vector called to play a key role in the decarbonization of the most complicated sectors to electrify and in which both the wind and – above all – the Iberian sun have a lot to say: their The cost of production depends, to a large extent, on the price of electricity, and there the peninsula has the best figures in the entire European Union. In light of the avalanche of new renewable projects on the way, this gap can only grow in the remainder of the decade.

In the case of hydrogen, the Spanish-Portuguese alliance has also been key to the inclusion of the future H2Med hydroduct in the list of projects of common interest in Brussels, a key step so that they can receive European financing. In this section, the collaboration has been twofold. On the one hand, to make the section between both countries a reality—between Celorico da Beira and Zamora, with a planned investment of 350 million: 193 million from Portugal, 157 from Spain. And secondly, so that the most critical part goes ahead: the section between Barcelona and Marseille, key so that Spanish and Portuguese hydrogen can reach Germany and the rest of the large consumers in central Europe.

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