Private Capital for HVDC Interconnectors in Europe: Techno-Economic and Policy Insights

Europe, partly due to fragmentation between European and national planning processes and structural constraints in traditional TSO-led financing models.

This paper analyses the role of private capital and alternative development models in accelerating interconnector development, using the Apollo-Link HVDC interconnector between

Spain and Italy as a case study. A conceptual framework distinguishes interconnector development models by actor type and financing structure and provides a comparative assessment of risk allocation characteristics across financing approaches, highlighting the growing relevance of privately initiated, off-balance-sheet projects.

Using ENTSO-E TYNDP 2024 scenarios and an open-source modelling framework based on

Open TYNDP and PyPSA, the socio-economic performance of Apollo-Link is assessed under 1 different European and national scenario variants. Results show significant socio-economic welfare benefits and demonstrate that cross-border power flows remain robust despite substantial deviations between national development plans and TYNDP assumptions.

The findings suggest that diversified actor participation, combined with transparent analytical tools, can help bridge the gap between European system planning and project implementation, thereby supporting the timely delivery of critical interconnector infrastructure for Europe’s energy transition.