In a stark warning, the European electricity industry has highlighted the imperative need for substantial investments in upgrading aging electricity grids across the continent. Failure to do so, they caution, could jeopardize the European Union's ambitious clean energy targets.
The European Union's strategy to combat climate change envisions a surge in the number of electric vehicles on European roads by 2030, coupled with a vast expansion of renewable energy sources and the adoption of electric heat pumps to replace traditional fossil fuel boilers in households.
Eurelectric, the association representing the electricity industry, asserted that to support these transformative goals, annual investments in Europe's electricity grids must increase by a staggering 84% on average from 2021 levels until 2050.
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Secretary General of Eurelectric, Kristian Ruby, emphasised the urgency of this investment, stating, “We want to transform the entire energy system at record speed, replace fossil fuels – oil and gas – with electricity. So we add loads of new generation capacity to the grid, we add electric cars, heat pumps… Therefore, you cannot say today what we used to do 10 years ago will be just fine for the next 10 years. It's just not the case.”
The European Commission estimates that an annual investment of €584 billion ($626.3 billion) in power grid infrastructure will be necessary until 2030 to meet the EU's environmental objectives. A substantial portion of these funds is expected to come from private sources or through grid tariffs. Eurelectric advocates for public funding to be directed towards the rapid enhancement of grids, prioritising them over longer-term infrastructure projects like hydrogen initiatives scheduled for the 2030s.
EU Energy Commissioner Kadri Simson echoed these concerns, asserting that grid infrastructure upgrades are indispensable for achieving the EU's 2030 targets. She also revealed plans to include grid projects in an upcoming list of cross-border infrastructure initiatives, enabling them to access EU funding and expedited permitting processes.
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Currently, 40% of Europe's power distribution grids are more than 40 years old, primarily designed around centralised power plants. These grids urgently require modernisation to efficiently distribute electricity generated by the growing number of local solar panels and wind farms expected to come online in the coming decade.
European Union member states are currently engaged in negotiations on power market reforms aimed at streamlining and expediting grid infrastructure investments. However, progress on these reforms has been hindered by disputes, particularly concerning state aid for power plant projects, delaying crucial legislation since June. The clock is ticking as Europe strives to meet its ambitious clean energy goals, making swift action on grid upgrades imperative for a sustainable future.
