Double investments in power distribution or lose Europe’s race to net-zero

Press Release

Europe’s distribution grids need to be urgently modernised to enable massive electrification of transport, heating and industry, integrate renewables and withstand more frequent extreme weather and cyber threats. Eurelectric’s Grids for Speed study shows that distribution grid investments should increase from an average €33 billion to €67 billion per year from 2025 to 2050, roughly 20% of what the EU spent on fossil fuel imports in 2023. Getting the grid up to speed will create more than 2 million jobs, bring greater energy savings and deliver more reliable power supply while accelerating the decarbonisation of Europe’s economy.

Translations available in French, German, Spanish and Italian.

Societal shifts are changing Europe’s energy system at a disruptive speed. By 2050, electricity will make up 60% of final energy use compared to 23% today, renewable capacity will have increased six-fold from 2020 with 70% of renewable generation and storage connecting at distribution level. Connection requests are increasing faster than grid modernisation and will continue to grow as electrification of end-use sectors progresses. These developments put a strain on the grid.

To relieve the strain and enable the energy transition, annual investments into new and modernised infrastructure, as well as digitalisation should reach €67 billion from 2025 to 2050, around 0.4% of EU GDP. Emerging forward-looking grid strategies such as anticipatory investments, optimal asset management and grid-friendly flexibility could lower this figure to €55 billion per year if properly implemented. Failure to achieve such investments would jeopardise 74% of prospective connections in key decarbonisation technologies such as electric vehicles (EVs), heat pumps and renewables.

“For a successful energy transition the EU needs massive amounts of additional grid capacity. Investment volumes for distribution system operators needs to double. Whilst this will require a significant ramp up, the cost of not investing is even higher. To succeed we need attractive returns for investors to be able to finance it, technology and fast electrification to manage the distribution fees. ”– says Eurelectric’s President and E.ON CEO Leonhard Birnbaum.

Scaling grid investments requires a dual effort. National authorities should implement the agreed legislation – such as anticipatory investments – while adapting the regulatory regime to support the investment surge. This means eliminating investments caps, fast-tracking grid permitting and procurement procedures and de-risking investments to spur private funding while opening up of public financing through EU budget.

Futureproofing the grid also depends on the supply chain’s capability to scale. Even if the necessary investments are met, current shortages of copper, a talent deficit, extended manufacturing lead times and transformers’ costs can hamper infrastructure development.

Such bottlenecks must be rapidly addressed through strategic planning, enhanced collaboration between European policymakers and industries as well as new training initiatives to streamline education certificates and ensure a skilled workforce.

Eurelectric calls on policymakers both at national and regional level to secure grid investments, strengthen supply chains and unleash the societal benefits of Grids for Speed.


Note to Editors:

Eurelectric represents the interests of the European electricity industry. We seek to contribute to the competitiveness of our industry, provide effective representation in public affairs and promote the role of electricity in the advancement of society. 

Press Contact:  

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