Grids fit for net zero – challenges and opportunities ahead

News Article
David Plas 71942(2)

Grids are the hidden heroes of the energy transition. They are the 18 million kilometres of long cables and infrastructure that allow electricity to flow across Europe, powering our houses, electric vehicles (EVs) and industries. They are also the networks that will have to connect and manage a seven-fold increase in distributed energy resources (DERs) in the next 7 years.

With 605 GW of additional renewable capacity, 50 million heat pumps, and an 18-fold increase in EV charging stations targeted for 2030, change is happening faster than we ever thought. To keep up with the change

Which challenges is the electricity grid facing today?

Since electricity was consumed on a societal scale, power systems have traditionally been centralised due to the massive fossil-fired plants needed to match demand. As we transition to a renewable-based energy system where those energy sources no longer come from a single central source, our networks will increasingly have to cope with distributed assets coming online and sometimes interacting with the grid in multiple directions.

Today these assets are not easily visible to system operators charged with keeping the grid . With electricity demand rising by 1.8% every year by 2030 and the number of connection requests accumulating, Europe’s ageing grid risks facing increasing congestion and power outages . In a few countries, this is already the case.

Hungary has recently issued a ban on connecting new distributed sources to the grid. Similarly, the Estonian and Dutch grids are now highly congested to the point that they won’t be able to allow any new connections.

How can Europe boost grid capacity at the needed speed to decarbonise its economy?

“It’s all about speed.” – says Sabine Erlinghagen CEO at Siemens Smart Infrastructure Grid Software at Power Summit 2023 – “we need to squeeze more capacity out of the existing grid with the power of software”.

The same level of speed is also required for the hardware. By 2050 Europe will need to double the capacity of the grid to be able to integrate variable generation and decentral assets.  Waiting until 2030 for expanding Europe’s networks is clearly not an option. This is why faster and simplified procedures to authorise grid build-out are most needed now to get Europe’s infrastructure fit for net zero.

During Eurelectric’s Power Summit session on Connecting the Dots, a panel of experts discussed how to strike the right balance between software and hardware solutions to support the EU decarbonisation.


Today 33% of Europe’s distribution grid is over forty years old. Modernising our networks via digitalisation increases grid capacity out of existing assets. For instance, curbing technical losses throughout the entire European grid via automated monitoring and access to consumers’ real-time consumption profiles could save as much as 10 medium-sized power plants.


Beyond harnessing the power of software, flexibility yields a largely untapped potential in increasing grid capacity. Heat pumps, smart charging infrastructure, EV batteries, storage solutions and other flexible assets can play a significant role in balancing the grid during peak demand and at times of shortages.  

While the technologies are there, the lack of a clear regulatory framework and certainty in the expected return on investments are hampering their full development. The fourth energy market package – aimed at enabling Europe to meet its energy and climate targets provides several instruments to boost flexibility, yet implementation in EU countries is either lacking or differs from country to country.

Optimistically, the electricity market design reform has set out the need for assessing flexibility. The next step should be to incentivise grid operators to do something about it. Local flexibility markets and flexible connection agreements would be a good start in that direction.  


While digitalisation and flexibility add capacity to existing networks in the medium term, reinforcement and expansion of Europe’s infrastructure are inevitable for Europe’s long-term decarbonisation goals.

“For high-voltage infrastructure, it takes seven to ten years from the moment you realise you need an additional line to the moment you will be able to transport electricity on that same line. If we accelerate everything else but that, we are going to be stuck.” – says Oliver Franz Vice President, at E.ON.

This calls for higher investments, especially in distribution grids which will have to manage most decentralised generation. Eurelectric’s Connecting the Dots study estimated that for every euro spent on clean and renewable generation, 50 cents should go to distribution grids’ development. In the latest Decarbonisation Speedways study, this amount now comes closer to 67 cents, whereas right now it’s only about 30 cents. In absolute figures, between 2021 and 2030 grid investments should reach €38 billion per year, which is 22% more investments than today’s levels.

After REPowerEU’s higher renewable rates and with new targets for 2040 on the horizon, anticipating the need for infrastructure build-out becomes crucial. The electricity market design reform should be the ideal platform to answer such needs by including the possibility of anticipatory investments.

To ensure we invest in the most efficient solution, however, good planning is the first step. Yet, making sure we know what’s happening on the ground can only be enabled by automated monitoring, also known as smart meters. Navigating the delicate balance of consumers’ protection and access to clear data to better balance the system will be a key challenge going forward.

We have seen plenty of targets put in place over the past years – it’s high time we start implementing them.