The European Commission is expected to launch a nearly $1.4 trillion (1.2 trillion euros) package to upgrade cross-border electric grids and accelerate planning and permitting as the EU looks to strengthen power links and accommodate a growing share of renewable electricity generation.
The European Commission is set to unveil the trillion-dollar package to fast-track grid upgrades and renewable projects permits, and boost cross-border cooperation, a leaked document seen by Euronews showed this week.
The Commission has identified eight key grid projects that will boost cross-border cooperation and strengthen links in the outdated European grid, which is not fit for absorbing the rising share of renewable electricity—not without solar and wind curtailments and losses for the EU taxpayer.
The EC is expected to unveil this week a comprehensive EU plan for cross-border electricity infrastructure, according to a draft proposal seen by Reuters.
The Commission will also work with grid operators to help the projects up and running, the proposal says.
“Huge Problem” with Bottlenecks
“In Europe, it’s a huge problem and we lose billions every year in lost value because of curtailment and bottlenecks,” European Commissioner for Energy, Dan Jørgensen, told the Financial Times last week.
That’s why the Commission will present an EU-wide plan to identify and help fund the most critical grid projects. The slow buildout and upgrade of the electric grids are the “biggest danger” to the EU’s net-zero and energy security goals, Jørgensen told FT.
“It is a bit of a paradox that we have an internal market that works better for selling tomatoes or toothpaste than it does for energy,” the EU official said.
In September, European Commission President Ursula von der Leyen said the EC would address critical grid bottlenecks in European electricity infrastructure in a bid to avoid spiking power and energy costs.
“Let us be clear – our energy prices remain still too high, too volatile, and too disparate across Europe. In some Member States, electricity costs three times more than in others. And many price spikes could be avoided, if energy could flow more freely to where it is needed,” von der Leyen said at a conference to take stock of one year of work since the landmark report on Europe’s competitiveness published by former European Central Bank (ECB) president Mario Draghi.
The national grids are not well integrated as Europe lacks the necessary interconnectors and is not using the ones it has efficiently, von der Leyen said.
“We will liberate these bottlenecks one by one. And we will step in with funding where necessary,” the top EU official said in September.
Trillions of Investment Needed
In late April, the worst blackout Europe has ever seen in modern times, when Spain and Portugal were left without electricity for hours, was a wake-up call for the EU that, regardless of booming renewable energy capacity installations, power supply will not be secure unless grids are capable and flexible enough to accommodate clean energy and meet rising demand.
For example, estimates have shown that some of Europe’s top economies where wind power plays a key role in electricity supply had to curtail a record amount of generation capacity between January and September as grids were unable to dispatch the surge in renewable energy output.
The curtailment rates in Spain, Germany, France, and southern Sweden rose in the nine months of the year compared to the same period of 2024, according to estimates by data provider LSEG cited by Bloomberg.
The European Commission has estimated that $2.3 trillion (2 trillion euros) to $2.7 trillion (2.3 trillion euros) is required to meet grid needs until 2050, a review of the EU’s electricity grids by the European Court of Auditors showed earlier this year.
The current pipeline of cross-border transmission projects in the EU falls short of its 2030 interconnection targets, clean energy think tank Ember said in a report last week.
Countries representing nearly 80% of EU power generation are behind on their 2030 interconnection targets, according to Ember’s analysis. A total of 11 member states – including the biggest economies Germany, France, and Italy, as well as Spain, Portugal, Poland, and Greece – are projected to have import capacity equal to less than 15% of their domestic electricity generation by 2030.
Moreover, optimizing the European power system will require nearly doubling cross-border transfer capacity over the next decade, Ember says.
Eurelectric, the association of the European electricity industry, last month urged the European Commission to take bold action in the Grids Package.
“Without immediate grid upgrades and regulatory reform, Europe risks derailing its electrification and climate ambitions,” Eurelectric said, adding that Europe’s ageing grids could slow down the energy transition.
“The message is clear: Europe needs grids that grow as fast as its ambitions — or risk watching the energy transition stall at the connection point,” the association noted.
By Tsvetana Paraskova for Oilprice.com
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