* Pressure on France to boost links to Spain
* Britain, Italy, Spain virtual energy islands
* European Commission has named 15 percent power link goal
* All links, including South Stream, have to be EU legal
By Barbara Lewis and Geert De Clercq
BRUSSELS/PARIS, June 26 Russia's cut in gas
supplies to Ukraine has driven European Union leaders to debate
how to bridge the gaps in Europe's grid urgently, replacing
decades of fragmentation with a single, united energy market.
EU policymakers have long dreamed of matching economic union
with energy union, in which power and gas flow freely from
Amsterdam to Athens.
So far, the European Union's 28 countries have been slow to
connect their wires, looking instead to protect national
interests as each member state still has right to decide its own
In particular, France, home to nuclear electricity giant EDF
and one of Europe's biggest exporters of power, has
stood in the way of letting Spain's abundant surplus of power
and natural gas head over its border for the benefit of other
nations, rivals say.
Spain's surplus has the potential to make a big contribution
to Europe's energy security. The maximum amount of power used in
the country on the coldest day of 2013 was less than half of its
installed capacity. It also imports gas from a variety of
non-Russian suppliers, which could be distributed widely.
Portugal and Ireland also have energy to spare.
A draft prepared ahead of EU leaders' debate on energy as
part of a two-day summit on Thursday and Friday, presents a more
joined-up network of cables and gas links as part of the answer
to EU energy vulnerability.
The document underlines the case for "fostering missing
infrastructure to put an end to any isolation of member states
from European gas and electricity networks by 2015."
In what EU diplomats said was a reference to Russia's South
Stream pipeline, the document, seen by Reuters, also said all
power and gas links, including those involving non-EU nations,
must respect EU single market rules on competition when
operating on EU territory. This aims to prevent a single company
controlling both the pipeline and the gas flowing though it.
Gazprom's South Stream provides security of gas
transit because it would pipe gas directly from Russia to the
EU, bypassing Ukraine, but it fails to meet EU concerns about
diversifying supplies. The Commission also says in its current
form, it breaks EU competition law.
The bloc relies on Russia for about 30 percent of its gas
needs. Roughly half of that is shipped via Ukraine, whose own
gas supplies Russia has cut off because of a row over pricing
and unpaid bills.
More joined-up grids and pipelines - provided they respect
EU law - are the answer, the Commission, analysts and many
member states say. They have other benefits, such as evening out
price differences, cutting costs for those who pay the most.
Poland, which neighbours Ukraine and is a route for Russian
gas, has led the calls for EU energy unity, while identifying
France as a problem.
"If Portugal and Spain would be connected to the rest of
Europe, just doing that would increase energy security," Polish
Prime Minister Donald Tusk said in a Brussels speech in May.
EU diplomats say Poland's plan, which includes coordinating
gas purchasing to prevent Gazprom agreeing sharply different
prices with different nations, has critics, but there is wide
support for better connections.
In its energy security strategy published earlier this year,
the Commission mooted a target for cross-border links to equate
to 15 percent of a nation's power generation capacity by 2030.
There is no gas pipelines goal, but the Commission has drawn
up a list of energy projects relevant to more than one country,
which qualify for EU funding and accelerated planning. They do
not include South Stream.
Spain and Portugal are pushing for an interconnection target
of 30 percent, EU diplomats said.
That would be challenging, given that the EU is far off an
existing non-binding target of 10 percent and Britain, Ireland
and Italy, as well as Spain and Portugal are virtual energy
islands with connection capacities of just 3-5 percent,
according to Commission figures.
France's lack of links to Spain is a particularly sore point
for the Spanish - and its utilities such as Acciona Energia
and Iberdrola - who would like to offload the
abundant surpluses they have following investment in renewables.
"France has no interest in letting in power from Spain, but
connections from Spain into the rest of Europe could help
mitigate the Ukraine problem," a high-ranking official at a
Spanish energy company said, speaking on condition of anonymity.
France denies that it is an obstacle and says the main
problems are the high costs and environmental constraints on
building infrastructure through the Pyrenees.
(Additional reporting by Tracy Rucinski in Madrid. Editing by