Europe: Urgent modernization of networks or the risk of missing carbon neutrality.
At a time when Europe is moving towards a carbon-free economy, the urgency of modernizing electricity distribution networks is becoming glaring. According to the “Grids for Speed” study published by Eurelectric, it is imperative to increase investments in electricity distribution networks from 33 billion euros currently to 67 billion euros per year from 2025 to 2050. This strengthening is vital to support the massive electrification of transport, heating and industry, integrate renewable energies and resist extreme climate and cyber threats.
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The crying need for modernization
Europe faces a pressing need to modernize its networks to cope with triple pressure: the rapid increase in connection demands, the necessary integration of renewable energies and resilience in the face of new environmental and technological threats. Demand for connection is growing faster than network modernization, exacerbating strain on existing infrastructure.
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A doubled investment for a strong economy
Investments should therefore increase to 67 billion euros annually, which represents around 0.4% of EU GDP. This substantial increase in investment is essential not only to improve network capacity, but also to accelerate electrification and enable the EU to save €309 billion annually on fossil fuel imports from 2040 to 2050.
Proactive strategies to reduce costs
Forward-looking network strategies, such as anticipatory investments and optimal asset management, could reduce the need for investment to €55 billion per year. This requires effective implementation and adaptation of regulatory frameworks to facilitate and de-risk these investments.
The double challenge of national authorities
National authorities play a crucial role in implementing agreed legislation and adapting the regulatory regime to support this surge in investment. This involves eliminating investment caps, speeding up permitting and procurement procedures, and deregulating investments to encourage private financing and opening up public financing via the EU budget.
Anticipate bottlenecks
The future of networks also depends on the supply chain. Current copper shortages, talent gaps, extended production lead times and transformer costs can hamper infrastructure development. These bottlenecks must be addressed through strategic planning and increased collaboration between policymakers and industries, as well as new training initiatives.
Eurelectric’s call to action
Eurelectric urges policymakers, both nationally and regionally, to secure network investments, strengthen supply chains and unlock the societal benefits of distribution network investments. It is essential to seize this opportunity to ensure a successful energy transition in Europe.
Exceptional discovery for humanity and the earth which will make it possible to make this unwanted gas a fuel for our cars
This article explores the challenges and investment needs for electricity distribution networks in Europe in the context of the energy transition. The need to double investments to effectively integrate renewable energy and electrify end-use sectors is crucial to achieving the EU’s carbon neutrality targets while strengthening energy security and creating economic opportunities.
