By 2030, Europe will see around 50–60mn heat pumps, 65–70mn electric vehicles (EVs) and over 600 GW of additional renewable capacity. Around 70% of that capacity will be directly connected to distribution grids. While becoming ever more critical to the continent’s decarbonisation, Europe’s distribution grids face scarce capacity, cumbersome permitting, and insufficient investments, the report has found.

Kristian Ruby, Secretary General, Eurelectric, comments: ‘Getting our electricity networks fit for net zero should be a top priority in the coming years, both at European Union (EU) and national level. This requires a new mindset among regulators and legislators. One that anticipates Europe’s capacity needs to integrate more renewable projects, and one that accommodates unprecedented electrification of transport, buildings and industry to match the speed and scale needed for Europe’s energy transition.’

Scarce capacity translates into longer waits for grid connections, more congested areas and higher costs for network users, the report notes. To avoid this, Europe must reinforce and expand its grid infrastructure to add capacity while trying to make the most of the capacity that already exists. Anticipatory planning of grid extension is now key to meeting EU electrification needs by 2030 and ensuring reliable electricity across thousands of kilometres of power lines throughout Europe. The surest way to enable such an urgent build-out is to plan and invest ahead, the report says.

Eurelectric notes that anticipatory investments should be structurally incorporated in the electricity market design reform to bridge the EU’s €7bn annual investment gap in electricity infrastructure. The EU currently invests €23bn/y in grid infrastructure. According to the report, this is way too low: ‘Investment in distribution grids should reach no less than €38bn/y until 2030 and up to €100bn/y until 2050, considering the anticipated additional demand to deliver on the EU decarbonisation’s agenda.’

Catalysing the necessary levels of investment also requires accelerated permitting. Today, lengthy grid permitting often delays renewable project deployment. This structural time lag increases the risk of congestion due to growing connection and capacity requests. The report calls for a simplified permitting process to be urgently agreed upon by policymakers. Factoring grid updates into a generator’s project under a unique permit can also ease this administrative burden.

Concurrently, while developing new infrastructure, existing grids should be optimised to the fullest. Eurelectric calls for digitalisation and flexible connection agreements as a way to optimise the use of existing capacity in congested areas. By allowing faster grid connections for part of the needed capacity, these agreements can partially alleviate the urgency of additional capacity buildout. As these instruments enable the existing grid to be used more efficiently, they should be promoted to all network users under a clear legal framework.

The report notes that electricity consumers can further help grid management and enhance the overall system stability by shifting or lowering their consumption to less congested hours through demand-side response schemes and local flexibility markets. Unleashing higher flexibility, however, requires a smarter grid, the report says. Regulators should incentivise system operators’ investments in digitalisation as a critical component to delivering a more resilient power system and efficient service to network users.

No transition without more transmission
A new report from WindEurope also argues that without critical investments Europe cannot deliver its energy security and climate targets.

According to the wind association, Europe needs to expand its manufacturing capacities for grid equipment. Europe’s grid equipment supply chain – substations, transformers, cables, transformers, switchgear – is not big enough. It can produce up to 1,900 km of offshore cables a year today – but up to 3,200 km will be needed by 2030. Europe also needs to expand its transformer and substation manufacturing.

Governments should support this with dedicated funding and financing – and expedite the permitting of new factories. The EU has proposed the Net Zero Industry Act to strengthen and expand its clean tech manufacturing capacities. This explicitly includes grid technologies. But as it stands, the Act falls short – the EU must put money on the table to help make investments happen, WindEurope says.

Visibility will be essential for investments in new factories. Long-term framework agreements between grid operators and suppliers will be key. There should also be incentives to standardise equipment design and reduce its environmental and material footprint, the report says.