Eurelectric Action Plan on Grids

KEY MESSAGES

• Eurelectric strongly supports the initiative announced by the European Commission to release a European Plan for Grids. To achieve a successful energy transition, regulatory obstacles to the grid’s expansion and digitalisation must be removed.

• Scarcity of grid capacity is already leading to delays in renewable project connections in several EU Member States and slowing down the decarbonisation of key sectors (e.g., heating, transport). Power grids risk becoming a possible bottleneck for integrating RES, flexible loads, and additional base load, rather than an enabler. This underscores the imperative to prioritise distribution grids on the EU’s political agenda to ensure security of supply.

• The power sector sees the following objectives and concrete actions (see the full list in annex) as essential elements for a comprehensive and effective European Action Plan on Grids:

1.    Reset the mandate for national regulatory authorities (NRAs) to develop a forward-looking regulatory framework for anticipatory grid planning and investment.

o   Regulation and regulators should shift from an outdated incremental approach to a forward-looking one to keep pace with the EU’s dynamic energy system. Currently, most regulatory frameworks in Europe are more focused on preventing excessive investment than ensuring the grid meets society’s evolving needs.

o   Further regulatory clarification is needed to prevent system operators (SOs) from facing financial penalties due to underutilised grid capacity built in an anticipatory way, which may be wrongly perceived as inefficient.

o   Investment in distribution grids should be increased to at least €36 billion per year until 2030 and up to €65 billion per year until 2050 on average. These cover:

• Costs related to hardware infrastructure (lines, substations), implying a greater deployment of CapEx (Capital Expenditure) that would only be possible within a modern regulatory framework and with competitive returns.
• Costs related to the digitalisation of the grid. It is essential to enable more flexibility in adjusting CapEx and Operating Expenditure (OpEx) as timely as possible.

• Costs related to human expertise and resources must be included. The power industry is dedicated to supporting skill initiatives, including Pact for Skills partnerships, training programs, reskilling and the promotion of technical careers.
• Promoting anticipatory grid planning implies to successfully implement network development plans at national level and align them with national energy and climat plans (NECPs) over 5-10 years, extending to 2050. NECPs should also include a binding network plan for national energy and climate targets.

2.   Secure and mobilise the necessary financial capabilities

• While private capital remains the main route for investment in grids, EU funding is a complementary tool to trigger further investments in projects and alleviate the risk of increased tariffs which could result from increased Presently, the many EU funds do not consider distribution system operator (DSO) needs enough. This can be observed in the very limited allocation of grants to projects led by DSOs. To improve the situation, we notably suggest to:
  • Create a dedicated programme in the next Multiannual Financial Framework (MFF) to support decentralised grid facility related projects.
  • Provide clearer information and directives for Member States to include the grid when the Commission launches new funding opportunities.
  • Guarantee that regulated business can genuinely benefit from grants by issuing Commission guideline and revising the Common Provisions Regulation for Grant-Funded Assets.

3.   Ensure the best level of stakeholder engagement to accelerate project authorisation and deployment

This implies:

• Simplifying the permitting process for grid upgrades, whether physical or digital. Following the example set by the Renewable Energy Directive (RED), it is essential for the Commission to establish clear policy guidelines emphasising that the grid is critical infrastructure of public interest. This should prompt administrati to process grid enhancement requests within defined and strict, defined timeframes. Commission guidelines on the implementation of the RED and its reform in the long run are required.
• Providing transparency regarding the grid’s role and connection procedures to gain public acceptance, whether from generators or consumers. Existing tools like capacity maps offer information on grid status and must be generalised. In turn, the involvement of stakeholders in network development plans is useful for all stakeholders and would provide the most complete information on the grid’s needs. Empowering consumers can also be done via flexible connection agreements to expedite their connections in areas where the grid is awaiting development.

4.   Build a sustainable, digitalised and resilient grid

• . Any sustainability initiative should assess its raw material supply, supply chain risks and life cycle perspective.
• Ensuring a resilient grid to extreme weather events can be achieved by increasing coordination and communication between network operators (transmission system operators or TSOs, and DSOs), increasing climate adaption measures and by safeguarding grid stability on islands.
• Finally, grids need to be digitalised to cope with increased grid complexity and renewables integration. Consequently, we call for speeding-up the smart meter roll-out, ensuring data interoperability, securing fair competition for data sharing and promoting innovation in the AI Act. Furthermore, it is key to harmonise cybersecurity legislation and to incentivise innovation projects with flexible frameworks.