The European Commission is preparing to present a €1.2 trillion ($1.3tn) investment plan to accelerate the modernisation of electricity grids across the 27 member states. The project, known as the “Grids Package”, aims to fast-track permits for grid infrastructure, renewable energy projects, and storage capacity.
The current system for planning and permitting has been criticised for being fragmented and too slow to meet the sector’s demands. According to internal documents, renewable energy projects can take up to nine years to secure permits, leading to delays and increased costs.
Eight strategic projects to connect Europe
The Commission has identified eight priority projects to strengthen electrical interconnections. These include cross-Pyrenean connections, a link between Cyprus and mainland Europe, and an axis connecting Lithuania and Poland to integrate the Baltic states into the continental grid.
Other initiatives include support for an offshore interconnector hub in Denmark, with potential extensions in the Baltic Sea. The EU executive also plans to reinforce infrastructure in the south-east of the continent and establish a hydrogen corridor linking Tunisia to Germany via Italy and Austria.
Storage capacity and delayed interconnection targets
Another corridor between Portugal and Germany will receive political backing and enhanced coordination. The programme aims to address the EU’s delay in meeting its 15% interconnection target by 2030, which 14 member states have yet to reach.
The outdated infrastructure is currently obstructing the integration of renewable energy and delaying new project deployment. A notable incident was the April blackout that affected over 60 million people on the Iberian Peninsula, according to officials from the EU’s Agency for the Cooperation of Energy Regulators (ACER).
Unclear financing structure
The total estimated cost of the modernisation plan stands at €1.2 trillion, divided between €730bn for distribution networks and €477bn for transmission grids. The financing structure has not yet been detailed, but could involve EU funds, national budgets, private investment, and cost-sharing mechanisms.
Eurelectric, the electricity industry association, has called for the creation of a decentralised budget mechanism in the next multiannual financial framework for 2028–2034. It also advocates for a portion of all electrification funds to be allocated to the modernisation and expansion of distribution networks.
Building a reliable network for future demand
The Commission also intends to integrate digitalisation technologies to ensure networks can meet future electricity needs, including electric vehicles, heat pumps, and heavy industry. The initiative aims to improve efficiency in cross-border exchanges and better integrate local solar and wind production.
The infrastructure reform could also impact electricity prices. Currently, power prices in the European Union remain two to three times higher than those in the United States, according to reports submitted to the Commission.
