The European Commission has outlined plans to significantly increase investment in Europe's power grids, with a draft document obtained by Reuters revealing a comprehensive strategy. Estimates from the European Union indicate that a substantial investment of 584 billion euros ($637 billion) is required to modernize the continent's power grids over the next decade. Many existing grids, built on the traditional model of large, fossil fuel power plants, need adaptation to accommodate the shift towards wind and solar power generation.
To catalyze investments in grid upgrades, the Commission is set to propose a plan next week, as detailed in the draft document. The initiative includes designating “projects of common interest” status to 68 electricity projects, offering them expedited permit access and access to specific EU funds. Notably, a dozen of these projects focus on energy storage.
The draft emphasizes the necessity for grids to evolve in response to a more decentralized, digitalized, and flexible electricity system, characterized by rooftop solar panels and local energy communities sharing resources.
While a Commission spokesperson declined to comment on the draft document, indicating potential amendments before publication, the proposed plan aims to collaborate with investors, regulators, and credit agencies. The objective is to facilitate easier access to loans, equity, and guarantees for grid projects. Additionally, the European Commission plans to explore new financing instruments in partnership with the European Investment Bank.
The urgency for grid upgrades has been underscored by the European electricity industry, warning that the current pace of grid enhancement is insufficient to accommodate the growing number of renewable energy projects seeking connection to the network. The proposed measures also include collaboration with power network regulators to develop recommendations and guidelines for the comprehensive overhaul, addressing key aspects such as the types of grid investments to be approved on a Europe-wide scale.
