Gearing up for Grids for Speed

This week was one for the ages(ing grids). In Rotterdam for the 26th World Energy Congress, hosted by the 世界能源理事会 , we convened a roundtable on Europe’s grid infrastructure, discussing some preliminary findings from our soon-to-be published #Grids4Speed study, done in conjunction with 安永 . At the same time, we also published our 1-page explainer of grids as an election priority for Eurelectric, calling for a ‘power infrastructure deal’ for Europe to take the needed action to strategically upsize our grids to deliver the energy transition. As we gear up for #Grids4Speed and a new legislative mandate that must take the grids challenge on board, we are taking a look at Europe’s grids, walking through where we are today and what is needed to tackle the grids challenge for a seamless energy transition.

Europe’s distribution grids are so 1980s

In Europe a good chunk of electricity grids are already 40 years or older – meaning they were built in a time when the first PCs were being bought for home use. Compare that with today where we have computers in our hands running 24/7 (also known as a smartphone) and nearly all business takes place online. With the entirety of human knowledge at our fingertips, we are now on the fifth generation (also known as 5G) of telecommunications infrastructure to ensure reliable, uninterrupted access to said knowledge (also known as the internet), and already talking about 6G.

Meanwhile, a revolution is taking place in the way we use electricity akin to the telecommunications revolution of the past 40 years. The days of unidirectional energy flowing solely from large generation plants towards final customers are numbered. As clean and renewable energy comes online at breakneck pace and people adopt new electric and increasingly flexible technologies for their heating, transportation and even industrial needs, the system is complexifying.

Keeping up with the electric revolution calls for a modernisation of electricity infrastructure on the continent. We could not expect to have unfettered access to any report, video, or piece of breaking news without the infrastructure modernisation that embody 3-, then 4- and now 5G, and neither should we expect an energy transition without a new G of grid infrastructure.

Modernisation: electrification’s sidekick

When we look to the future of the power system, we see a lot more electrification. In our Decarbonisation Speedways study with 埃森哲 , we project that electricity demand is set to double by 2050 – a four times faster rate of growth than the prior three decades. This is backed by the European Commission who has put electrification at the heart of the Green Deal, as a way to combat climate change and deliver energy security by weaning us off of imported fossil fuels.

So far, we have done well with what we have. As Power Barometer 2023 showed, as connection request increased by 19% from 2020 to 2021, we have increased connections by 19% in 2022 compared to 2019. In terms of infrastructure installations, we have increased the number of primary and secondary substations by 1.5% and 1.2%, respectively, and increased the length of the grid by 0.8%. In terms of digitalisation, the penetration of smart meters in Europe is at more than half - around 56%. This all with a modest 8% annual growth in investment.

But things are already ramping up. Last year at Power Summit 2023, our President and CEO of E.ON , Leo Birnbaum , said his company would need to be making a connection every seven seconds from now to 2030. In the face of this, modernisation in the form of expansion, as well as the digitalisation, will need to keep up to provide enough capacity and stave off bottlenecks in the process of electrification.

Grids for Speed

Much of the Green Deal has been about setting the ambition, with bold targets for 2030 and to decarbonise Europe by speeding up our energy transition. But to go fast, we need grids on our side. Power Barometer 2023 showed to keep pace, we would need to increase investment by about 84% to €65 billion a year to keep up with electrification’s trajectory.

Failing to put the money we need into grid modernisation comes with its own price tag. A significant amount of heat pumps, solar panels and EV chargers would face delayed connection and a similar volume of EVs would never hit the road Given the potential upsides of electrification such as reducing carbon emissions, energy efficiency and energy bill savings, the opportunity cost we face as a society is huge.

This is why Eurelectric has set out to devise a path forward to deliver Grids for Speed. Next month, we will launch of report of the same name that will dive into these challenges and unveil how we can ensure that our grids are fit to deliver a more electrified society.

Give grids the attention they need

Ahead of the changeover slated to happen in the EU institutions this June, we are doing everything we can to champion grids as a priority for the next Commission. This was highlighted in our election manifesto and reiterated in a 1-pager earlier this week. We have also been here, there and everywhere pushing the importance of giving grids their overdue attention.

Serge Colle , 安永 ’s Global Energy & Resources Industry Leader gave a preview of Grids for Speed to a private roundtable including the Eurpoean Commission’s Energy Commissioner, Kadri Simson, at the World Energy Congress in Rotterdam this week. On the presentation, Commissioner Simson said that the study was a "timely" piece and "aligned" with the Commission's scenarios. Our President, said "I can share already that our investments figures matched expectations."

And it doesn’t stop there. We have talked up Grids for Speed a lot in this article, and now we want you to act. Join us for the launch on 22 May at Power Summit 2024, where we will unveil a lot more detail about everything discussed here today. You didn’t think we would give it all away, did you?

This week's edition written by:

Nicholas A. Steinwand Policy Communications Advisor - Eurelectric

With technical input by:

Savannah Altvater Head of Distribution and Market Facilitation - Eurelectric

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