From plan to action: the EU's Action Plan for Grids

This week we were pleased to finally see the European Commission unveil its action plan on grids. Launched at the Fourth PCI Energy Days on Tuesday, the Commission’s EU Action Plan for Grids . This plan comes after months of pushing from Eurelectric when grids were overlooked by Commission President, Ursula von der Leyen ’s, State of the Union address back in September.

Since then, we have published a barrage of information on grids’ needs for the future of energy in Europe. Our grid capacity report details the needs for expansion and digitalisation to cope with more electrification. Our joint analysis with SolarPower Europe looks at the needs for connecting unprecedented levels of distributed solar capacity to the system. Then, pre-empting the launch of the Commission’s action plan, we published our own grid action plan , highlighting the most important points for policymakers to take on.

Now, with the Commission’s plan unveiled, we can compare and contrast. What does the Commission get right? What can be improved? Is there anything missing? These are the questions we are asking today.

Grids at the centre of the EU agenda

Europe’s grids are in dire need of modernisation. With an average age of 40 years for Europe’s distribution grids and 70% of new renewable energy capacity by 2030 expected to connect at this level, expansion, alongside digitalisation, will be crucial to managing new loads and flows of electricity. That is because Europe is targeting colossal additions of variable and distributed renewable energy for 2030, never mind the increased rate of electrification to decarbonise the Continent.

Grids are the backbone of the energy transition, and they are now getting the place they deserve at the centre of the EU agenda. With the Commission’s action plan spelling out seven priorities and 14 concrete actions to take, we are finally moving in the right direction. Eurelectric ’s President and E.ON CEO, Leo Birnbaum said as much:

“It’s good to see that grids are now centre of the EU agenda. This plan is an excellent first step in future-proofing Europe’s power infrastructure with concrete actions to implement in two years from now. Higher transparency in grid data exchange and a more inclusive engagement between national authorities, system operators and civil society are valuable elements of this deal. We also appreciate that the Commission’s plan calls for a rapid agreement on the electricity market design reform with its provisions on enabling anticipatory grid investments. To this end, predictable regulatory principles are crucial to de-risk such investments by ensuring system operators are not penalised in cases of underutilised grid capacity built based on electrification forecasts…”

Priorities and actions

Priority 1: accelerating implementation of existing PCIs and developing new projects

• Action 1: Commission, Member States and Transmission System Operators (TSOs) to strengthen support to PCI and PMI preparation, faster implementation and funding

Priority 2: enhancing long-term network planning

• Action 2: ENTSO-E to enhance top-down planning towards 2050 by integrating the identification of offshore and onshore system needs and further considering hydrogen
• Action 3: EU DSO Entity to support DSO grid planning by mapping the existence and characteristics of distribution development plans

Priority 3: introducing a supportive, future-proof regulatory framework

• Action 4: Commission to propose guiding principles identifying conditions under which anticipatory investments in grid projects should be granted
• Action 5: Commission to issue guidance on cross-border cost sharing for offshore projects

Priority 4: making better use of existing grids and smartening them

• Action 6: ENTSO-E and EU DSO Entity to agree on harmonised definitions for available grid hosting capacity for system operators and to establish a pan-EU overview
• Action 7: ENTSO-E and EU DSO Entity to promote uptake of smart grid, network efficiency and innovative technologies
• Action 8: EU Agency for the Cooperation of Energy Regulators (ACER) , in its next tariff report, to recommend best practices in relation to the promotion of smart grids and network efficiency technologies through tariff design, focusing on the consideration of OpEx in addition to CapEx and benefit sharing

Priority 5: improving access to financing

• Action 9: Commission to identify tailored financing models and strengthen dialogue to address obstacles to private financing
• Action 10: Commission to increase visibility on opportunities from EU funding programmes for smart grids and modernisation of distribution grids

Priority 6: ensuring faster and leaner permitting processes

• Action 11: Commission to support permitting acceleration providing guidance and technical support on how to implement existing legislative tools and Member States to implement acceleration measures
• Action 12: Commission to launch a Pact for Engagement for early, regular and meaningful stakeholder engagement and regulatory support

Priority 7: strengthening supply chains

• Action 13: ENTSO-E and EU DSO Entity to collaborate with technology providers to develop common technology specifications and improve visibility of grid project pipelines, to facilitate investments in manufacturing capacity and secure supply chains
• Action 14: Commission to promote common technical requirements for generation and demand connection

Still room for improvement

While we are enthused with the Commission’s plan and applaud the step in the right direction, there is still more to do. Unlocking the needed €584 billion in investment by 2030 for upgrading our grids is no small feat. Unfortunately, too, the nature of the Commission’s plan (i.e., a Communication) is just that. There is nothing binding about the priorities and actions laid out, meaning the EU’s Executive is merely gesturing in the direction it wants Member States to take.

Preparing our grids for the future power system will take much more. Our President continued on this topic to say:

“…there is still room for improvement. Europe’s grids face an escalating number of threats from more frequent extreme weather events. This Action Plan should therefore acknowledge the need for more climate adaptation measure to make our infrastructure more resilient to climate change. Furthermore, while the Commission recognises that EU funds are currently under-utilised for local grids projects and suggests a new approach, concrete guidelines are needed to clarify how the new approach can ease funding access for distribution system operators’ projects. More robust measures may also be required to overcome supply chains bottlenecks. We call on the upcoming Belgian Presidency to ensure a proper endorsement of the EU Action Plan for Grids and ask EU countries to swiftly implement its actions to bring our electricity grids up to speed with the energy transition.”

From plan to action

Many targets for 2030 have been set over the past five years. More are coming now for 2040. But to reach the targets, we need to start implementing. It is time to turn plan into action. Mr Birnbaum’s final point in the quote above, calling on the incoming Belgian Presidency of the Council of the European Union to endorse the EU Action Plan on Grids, was reiterated in a meeting a Eurelectric delegation had with Belgian Energy Minister, Tinne Van der Straeten , earlier this week.

The need to metamorphise the plan into action was also brought to the Commission’s Clean Transition Dialogues on energy intensive industries alongside other industry leaders. Doubling down on grids, Mr Birnbaum emphasised to his hosts, President von der Leyen and Executive Vice-President in charge of the Green Deal, Maro? ?ef?ovi? , the scale of investment needed to prepare Europe’s grids to make a more electric future possible.

Implementation, in short, was top of mind here, and it will need to be for the coming months, and years. As the Belgian Presidency rolls over into the Hungarian, and a new Commission takes up the last’s torch, grids will need to remain at the centre of the EU agenda to keep the energy transition on track and reach our 2030, and eventually 2040 targets.

This week's edition written by:

Nicholas A. Steinwand , Strategic Communications Officer - Eurelectric

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