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The writer is EU commissioner for energy
In 2022, the EU witnessed a record surge in wind and solar power. Three million heat pumps were sold. Almost one in four new cars is now electric. This is thanks to the European Green Deal and our work to end imports of Russian fossil fuels. These trends are predicted to accelerate this year.
But Europe will only ensure its energy security and deliver on its climate ambitions if we sustain a fast pace in the rolling out of renewables and the electrification of our economy. With supply and demand booming across Europe, we now need to ensure that clean electricity can be delivered across the continent. For this to happen, our power infrastructure must be ready.
Our 11mn kilometres of grids need to grow and change to serve increasing demand. Electricity consumption is expected to increase by about 60 per cent between now and 2030.
Grids will need to integrate a large share of intermittent renewable power and adapt to a more decentralised electricity system: with millions of rooftop solar panels and electric vehicles, electrolysers producing green hydrogen, and local energy communities sharing resources, we will need flexibility, speed and digitalisation.
Today, completed renewable projects can face long waits to be connected to the grid. Securing permits for grid reinforcements can take up to 10 years.
When there is no certainty about connection timelines or costs, planned generation projects are simply abandoned. Even existing renewables plants are often penalised. Solar panels are frequently the first technology to be switched off when grids are overloaded, because they are flexible and easy to manage. This is wasteful and costly.
Across Europe, grid interconnection projects are delayed due to cost overruns, inflation and rising interest rates. But by placing a stronger focus on its transmission and distribution grids, the EU can turn a potential barrier into a powerful enabler.
The EU’s regulatory framework has reduced the length of the permitting procedure for electricity transmission priority projects to under three and a half years on average. And emergency legislation introduced last year accelerated authorisation of new renewable projects. If extended into the broader grid connections, it could help fast-track progress without cutting corners on environmental safeguards. More technical assistance and sharing of best practices could also help national administrations to move faster.
We must invest more and better. Europe needs to invest €584bn in its grids by 2030. There are avenues to explore. In July, the European Investment Bank increased financing by 50 per cent to help mobilise more than €150bn in new green investments. Furthermore, the EU taxonomy on sustainable activities can offer opportunities to increase the financial attractiveness of transmission and distribution operators.
A rapid agreement on the proposed electricity market reform would also help change the remuneration mechanisms for grids projects, boosting anticipatory investments.
We also need to make progress on cross-border interconnections where they still lag behind, despite the commission’s 15 per cent interconnection target. This would increase security of supply and bring down prices.
Finally, we must not underestimate the industrial and commercial opportunities for Europe. The world’s three largest cable manufacturers are European. A better alignment of investment in grids and in manufacturing capabilities is needed.
If we boost our industrial capacity, expand the pool of skilled labour and improve supply chains, this would have a positive effect in terms of jobs and growth. As a start, the EU Net Zero Industry Act will support cable manufacturing along with other clean technologies, for our domestic and export markets. In this way, European industry could also tap into the global surge in grid investment — 80mn km of new grids are needed worldwide by 2050.
The answer to the grid challenge does not necessarily mean “more cables and lines”. There are ways to reinforce the networks without building more physical infrastructure. The European Commission’s “digitalisation of energy action plan” points to various solutions. Flexible storage, and demand response solutions can be crucial.
Europe faces a fundamental challenge in ensuring its energy independence and deliver on its climate goals. It is time to shift our attention from targets and rules to what is needed to make things happen. This means placing the issue of grids at the heart of the debate. Upgrading the power grid will plug Europe into a sustainable future.