Red Electrica has operated the Spanish transmission grid since its establishment in 1985. As such it is the only authority in Spain with the right to operate a sub-Mediterranean transmission cable.

In October, Italy's CESIwas awarded a $505,000 contract to prepare a feasibility study into the link, in conjunction with the local Algerian Energy Company (AEC) - a newly created joint venture between Sonelgaz and state energy company Sonatrach. The study is expected to take four months to complete and the results should be available by the end of January (MEED 12:10:01).

The cable will be used to transport power generated as part of Algeria's landmark 2,000-MW private power project. This calls for the construction of a 1,200-MW plant at Arzew, generating power for export, and an 800-MW plant in Skikda for domestic use. Five international developers - Endesaof Spain, Enelpowerof Italy, SNC Lavalinof Canada, Electricite de Franceand the US' AES Corporation - have submitted technical bids for the build-own-operate (BOO) project. Commercial bids will be submitted once the feasibility study on the cable has been completed. The client is AEC.

Algeria is also examining the possibility of establishing a subsea electricity link with Italy via Sardinia. As part of a protocol agreement signed between the local Energy & Mines Ministry and Italy's Productive Activities Ministry, Sonelgaz and the Italian network operator, Gestore della Rete di Trasmissione Nazionale (GRTN), will lead a feasibility study on an interconnection with a capacity of around 1,000 MW. The terms of reference for this study will be finalised by the end of the year, and it will be conducted in the first half of 2002.