EU unveils action plan for grids to accelerate green energy transition

01 Dec 2023 CW Team

The urgency is underscored by the fact that 40% of the EU's distribution grids are over 40 years old, and cross-border transmission capacity is anticipated to double by 2030, necessitating a substantial investment of ?584 billion (approximately $637 billion). The key focus areas of the action plan encompass several critical objectives.

Firstly, efforts will be directed towards expediting the permitting process for grid deployment. This involves providing technical support to authorities and offering guidance on effective stakeholder and community engagement to stimulate faster approvals.

Secondly, a concerted effort will be made to enhance the long-term planning of grids. This entails accommodating the growing presence of renewables and electrified demand, including hydrogen, by steering the activities of system operators and national regulators.

Additionally, the action plan seeks to introduce regulatory incentives. This includes providing guidance on proactive, forward-looking investments and encouraging cross-border cost-sharing arrangements for offshore projects.

Optimising the usage of grids is another pivotal aspect, with the plan focusing on enhanced transparency and improved network tariffs. This aims to support smarter grids, efficiency, and innovative technologies by fostering collaboration between system operators and adhering to recommendations from the Agency for the Cooperation of Energy Regulators.

Access to finance for grid projects is identified as a key challenge, and the action plan addresses this by increasing awareness of opportunities within EU funding programs. Special emphasis is placed on funding for smart grids and the modernisation of distribution grids.

Aligned with the REPowerEU Plan's objective to halt imports of Russian fossil fuels, and the recently agreed-upon target of achieving a 42.5% renewable energy share by 2030 (with an ambition for 45%), the EU underscores the imperative for upgraded grids and reinforced energy infrastructure.

This EU Action Plan for Grids, unveiled in the European Wind Power Action Plan presented by the Commission last month, recognises the need for networks to incorporate a substantial amount of diverse renewable energy. By 2030, the capacity for wind and solar energy generation is anticipated to increase from 400 GW in 2022 to a minimum of 1,000 GW. This includes a significant expansion in offshore renewable energy, reaching 317 GW connected to the land. Consequently, the grid must adapt to a more decentralised, digitalised, and flexible electricity system characterised by millions of rooftop solar panels and local energy communities sharing resources.

In parallel developments, the European Commission outlined a six-point action plan in October to enhance the competitiveness of Europe's wind energy industry. This involves ensuring financial support and expediting permitting processes. Additionally, the recently endorsed Net-Zero Industry Act aims to strengthen Europe's manufacturing capabilities in crucial technologies essential for addressing climate change, garnering legislative backing from the Members of the European Parliament.

The European Commission has introduced a comprehensive action plan with the aim of ensuring the efficient operation and accelerated expansion of electricity grids across the European Union (EU). This initiative is an integral part of the broader strategy to realise the European Green Deal, a set of policy measures designed to achieve a nearly 55% reduction in net greenhouse gas emissions by 2030. The urgency is underscored by the fact that 40% of the EU's distribution grids are over 40 years old, and cross-border transmission capacity is anticipated to double by 2030, necessitating a substantial investment of ?584 billion (approximately $637 billion). The key focus areas of the action plan encompass several critical objectives. Firstly, efforts will be directed towards expediting the permitting process for grid deployment. This involves providing technical support to authorities and offering guidance on effective stakeholder and community engagement to stimulate faster approvals. Secondly, a concerted effort will be made to enhance the long-term planning of grids. This entails accommodating the growing presence of renewables and electrified demand, including hydrogen, by steering the activities of system operators and national regulators. Additionally, the action plan seeks to introduce regulatory incentives. This includes providing guidance on proactive, forward-looking investments and encouraging cross-border cost-sharing arrangements for offshore projects. Optimising the usage of grids is another pivotal aspect, with the plan focusing on enhanced transparency and improved network tariffs. This aims to support smarter grids, efficiency, and innovative technologies by fostering collaboration between system operators and adhering to recommendations from the Agency for the Cooperation of Energy Regulators. Access to finance for grid projects is identified as a key challenge, and the action plan addresses this by increasing awareness of opportunities within EU funding programs. Special emphasis is placed on funding for smart grids and the modernisation of distribution grids. Aligned with the REPowerEU Plan's objective to halt imports of Russian fossil fuels, and the recently agreed-upon target of achieving a 42.5% renewable energy share by 2030 (with an ambition for 45%), the EU underscores the imperative for upgraded grids and reinforced energy infrastructure. This EU Action Plan for Grids, unveiled in the European Wind Power Action Plan presented by the Commission last month, recognises the need for networks to incorporate a substantial amount of diverse renewable energy. By 2030, the capacity for wind and solar energy generation is anticipated to increase from 400 GW in 2022 to a minimum of 1,000 GW. This includes a significant expansion in offshore renewable energy, reaching 317 GW connected to the land. Consequently, the grid must adapt to a more decentralised, digitalised, and flexible electricity system characterised by millions of rooftop solar panels and local energy communities sharing resources. In parallel developments, the European Commission outlined a six-point action plan in October to enhance the competitiveness of Europe's wind energy industry. This involves ensuring financial support and expediting permitting processes. Additionally, the recently endorsed Net-Zero Industry Act aims to strengthen Europe's manufacturing capabilities in crucial technologies essential for addressing climate change, garnering legislative backing from the Members of the European Parliament.