Techno-Economic and Regulatory Analysis of the Apollo-Link HVDC Interconnector

Abstract APOLLO-LINK - The Mediterranean Solar Bridge is a privately financed electricity transmission project establishing a new interconnector between Italy and Spain. It will constitute the first direct bidding zone border between Itay North and Spain with a capacity of 2,000 MW. This interconnector will promote European electricity market integration, boost the exchange of renewable energy and re-enforce the East-West connections of the EU’s power sector by connecting Spain’s substantial renewable generation with Italy North’s high-load zone. The APOLLO-LINK interconnector will make use of a rigid bipole configuration that operates two converter poles per station at a voltage level of ± 525 kV without the need for a neutral return path. The envisioned interconnection offers numerous advantages for the national energy systems in Italy and Spain, including an estimated net annual social welfare gain of up to € 860 million and a long-term reduction in end-consumer electricity prices. This project enhances PV generation efficiency, improves energy security by linking high-demand areas in Italy with renewable sources in Spain and supports symbiotic development with Spain’s and Italy´s planned network improvements. The proposed APOLLO-MODEL is a harmonized regulatory model that enables interconnector investments to be financed based on expected congestion revenues, potentially combined with a cap-and-floor structure that protects both investors and consumers. This provides predictability for investors and socializes excess gains, balancing private initiative with public interest.