Electricity grids, European plan for affordable energy

Underlying this is the globally recognised need to strengthen and modernise networks. It is no coincidence that, from the United States to China, governments are all moving in this direction. In the States, it is estimated that electricity transmission systems will need to be expanded by 60 per cent by 2030, while the State Grid Corporation of China is aiming to put some USD 574 billion on the track over the next five years to upgrade transmission and distribution. A substantial commitment that also sees Europe at the forefront, aware of the crucial role of electricity grids in facilitating a series of new solutions required by the system. And, to make them possible, the grids will have to transform themselves into intelligent, digitised infrastructures, monitored in real time, but also remotely controllable and cybersecure.

This is an epoch-making transformation that is all the more necessary given the age of Europe's electricity grids, 40% of which are over 40 years old and in need of modernisation. In this decade alone, according to Commission estimates, some EUR 584 billion of investment in electricity grids will be needed, i.e. a very significant share of the effort needed to achieve the transition to clean electricity. This is why the EU, which, it should be remembered, has one of the most extensive and resilient networks in the world, covering over 11 million kilometres across its internal market, presented a new package of measures last December that complements the Affordable Energy Action Plan based on four pillars: 1) reducing energy costs for all; 2) completing the Energy Union; 3) attracting investment; and 4) responding to potential energy crises.

The plan includes eight different measures ranging from financing energy efficiency to limiting the cost of electricity supply. And it is within this last chapter that Europe indicates a very clear direction to the Member States, starting from an unequivocal datum on the development of renewable sources. In fact, the time required to implement new projects varies from 7-10 years for wind power to 17 years for transmission networks. Hence the push from Brussels for authorities at all levels to work hard to speed up authorisation procedures for grid, storage and clean energy projects, as also indicated in the report prepared by former Prime Minister Mario Draghi. Therefore, targeted updates to the legislative framework are needed to significantly simplify and shorten authorisation processes. A change of pace that is already visible in some Member States, starting with Italy, as reported in the other service on the page.

Alongside this, according to the Commission, action must also be taken on the grid in order to interconnect areas with great potential for clean energy production with European regions with high energy demand in order to get affordable electricity to where it is most needed. In this regard, Brussels also quantifies the necessary effort: over the current decade, EUR 584 billion of investment in electricity networks is needed, as mentioned. But another front must not be overlooked either because, as the Agency for the Cooperation of Energy Regulators (Acer) has certified, a need for 32 gigawatts of cross-border capacity by 2030 remains unmet. Likewise, existing infrastructure must be used efficiently.

The course indicated by Europe, therefore, is very clear. And it is also emphasised in the grid package launched as part of the EU Competitiveness Compass and the Clean Industry Pact, which will have to take into account the increase in electricity consumption, estimated to rise by around 60% by 2030. On this front, several measures have been put in place and, among them, not only the increased push on authorisations, already included in the other plan, but also the introduction of regulatory incentives for the construction of forward-looking grids as well as improved access to financing in a context where public resources are limited and inflation and rising interest rates are hitting projects.