Europe’s ambitious energy transition and the EU’s goal of achieving ‘net-zero’ emissions are at risk without significant investment in electricity distribution systems, warns the power sector. Industry leaders emphasize the necessity of channeling 0.4% of GDP into upgrading local power grids. As energy ministers finalize their stance on future grid development, the electricity industry insists that annual investment in distribution networks must double to around €67 billion to support the energy transition.
Urgency for Investment Highlighted by Eurelectric
At its annual conference in Greece, Eurelectric released a report stressing that Europe’s shift from fossil fuels to renewable energy requires substantial upgrades to distribution grids. Without this investment, integrating new renewable generation capacities, such as solar and wind power, will be impossible. Leonhard Birnbaum, Eurelectric’s president, explained that most funding should come from capital markets, provided investors see favorable regulatory conditions and sufficient returns from grid fees.
The Role of Public and Private Funding
Birnbaum noted the need for a regulatory environment that supports long-term investments. He acknowledged that public funding might also play a role, especially with the upcoming negotiations for the EU’s seven-year budget. Targeted support or subsidies might be necessary to ensure the successful integration of renewable energy into the grid, which is primarily managed at the national level but influenced by EU policies.
Strategic Political Signals and Regulatory Framework
The upcoming EU Council conclusions on advancing sustainable electricity grid infrastructure are expected to send a strong political signal. Although the details of the position paper are still being finalized, earlier drafts indicate a consensus on the need for a robust EU-level framework for local grid development. This framework aims for greater transparency and independent oversight, building on the momentum of the European Commission’s action plan for grids published in November.
Integrating Renewables and Enhancing Grid Stability
Birnbaum warns that without grid expansion, deploying additional renewable energy infrastructure could overload existing networks, leading to costly curtailment fees. He highlights existing bottlenecks in regions like the UK and the Netherlands, causing delays in connecting wind farms. On a positive note, Birnbaum believes that increasing electricity consumption, particularly from electric vehicles, could help stabilize the grid. Bidirectional charging could allow car batteries to store and supply electricity, mitigating the intermittency of renewable energy sources. Eurelectric supports this transition, viewing higher electricity consumption as a means to lower costs and stabilize the energy transition.
SOURCE: Ref Image from Power Technology
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