The EU strategy for green electricity grids of the future

The action plan sets out 584 billion euros of investment by 2030 to accelerate development and modernisation of electricity grids across the European Union. The aim is to improve efficiency, flexibility and sustainability, and to increasingly integrate renewables, facilitating a secure, reliable and green transition for the entire continent. The Action Plan for Grids recently published by the European Commission identifies a series of key elements contributing to achievement of Green Deal targets, including simplified authorisation procedures and the option of targeted funding for construction of key infrastructure.

The document states that energy networks are the backbone of the EU’s internal energy market and an interconnected system is key to enable the green transition and decarbonisation. In this regard, the Commission has already put in place a supportive legal framework for the rollout of electricity grids across Europe. With the EU markets fully integrated and modernised, hi-tech, digital infrastructure, citizens and business will benefit from ever cheaper and, above all, cleaner energy.

«Our Action Plan will ensure better support to infrastructure planning, development and operation, central steps to connect Europe’s growing renewable energy sources to the end-users that need them, from households to hydrogen producers. Through concerted efforts, we can develop more efficient, smarter and more integrated energy infrastructure, thereby making sure that we deliver the clean energy that we need to succeed in the green transition». explained Maroš Šefčovič, Executive Vice-President for European Green Deal.

By the end of the decade, according to forecasts in the Action Plan, EU electricity consumption will increase by around 60%. Considering that 40% of distribution grids date back more than 40 years and that the transmission capacity is set to double, grids must evolve in order to receive and transmit the increased quantities of electricity, including from renewable sources. It is therefore essential to employ digitalisation as a tool to manage a system that will become increasingly decentralised and will increasingly need to draw on resources enabling flexibility. Heat pumps will play a central role in this new scenario, along with solar panels on roofs, energy communities, offshore wind farms and electric vehicles.

«Grids need to be an enabler, not a bottleneck in the clean energy transition. That way we can integrate the vast amounts of renewables, electric vehicles, heat pumps and electrolysers that are needed to decarbonise our economy» highlighted Kadri Simson, EU Commissioner for Energy. Investment in electricity grids will also contribute to reduced greenhouse gas emissions and reduced costs for consumers. Cross-border energy infrastructure projects alone could reduce generation costs by 9 billion euros per year by 2040. Current European cross-border transmission capacity is 93 GW and this will need to increase by 64 GW by 2030.

The EU has the most extensive and resilient network in the world, delivering electricity to hundreds of millions of citizens. This has proved to be an essential asset in ensuring secure and stable supplies during the energy crisis. But to achieve the targets set in the REPowerEU Plan to end imports of fossil fuels, particularly from Russia, Europe needs to develop, strengthen and upgrade energy infrastructure. And this must be done quickly. To achieve a 42.5% renewable-energy share by 2030 - with the goal to reach 45% - generation capacity from wind and solar power must increase from the 400 GW in 2022 to at least 1,000 GW. These figures highlight the importance of transport grids.

In fact, as presented in the Renewables 2023 report from the International Energy Agency (IEA), global renewable generation capacity is growing quicker than at any point in the last thirty years. This means that there is a real possibility of hitting the target to triple global capacity by 2030, which governments set at the most recent COP28 climate-change conference at the end of 2023. Globally, green energy increased by 50% in 2023, reaching capacity of almost 510 GW, primarily attributable to growth in photovoltaics, accounting for three quarters of the global increase. In particular, in the US, Brazil and Europe the increase in renewable generation capacity has arrived at historic levels and, again according to the findings of the IEA report, in these same regions it is expected that by 2028 photovoltaics and onshore wind power will have more than doubled compared to the last five years.

The European plan identifies various concrete actions to accelerate investments and infrastructure projects. These are the key points set out in the Action Plan for Grids:
i) accelerating the implementation of Projects of Common Interest (PCI) and developing new projects;
ii) improving the long-term planning of transmission and distribution grids to accommodate increased demand, integration of renewables and electrified demand by coordinating with system operators as well as national regulators;
iii) improving access to funding for projects;
iv) introducing quicker authorisation processes for the development of grids, providing technical support to authorities and indications on stakeholder engagement and dialogue with local communities;
v) introducing regulatory incentives for offshore projects;
vi) incentivising a better usage of the grids with enhanced transparency and improved network tariffs for smarter grids and efficiency, supporting cooperation between system operators and recommendations by the Agency for the Cooperation of Energy Regulators (ACER).