The European Union faces a race against time to adapt its electricity grid to the ambitious goal of net-zero emissions by 2050. The European Court of Auditors warned in its report “Making the EU electricity grid fit for net-zero emissions” that current investments are below what is needed and that delays in grid projects threaten to slow the deployment of renewables.

It is estimated that between €1.994 billion and €2.294 billion in electricity grid investments will be needed between now and 2050. However, current figures are far from that goal. According to the data analyzed, the investment rate projected by operators is €72 billion annually until 2030, then declining to €68 billion by 2050. In total, it would barely reach €1.871 billion, falling below the minimum required.

“Simply maintaining the current level of investment will not be sufficient,” the Court’s document concludes. This financial gap could compromise both security of supply and the integration of renewable sources.

An aging grid facing growing demand

The EU electricity system is the largest in the world, with more than 11.3 million kilometers of lines operated by 2,500 distribution operators (DSOs) and 30 transmission operators (TSOs), connecting 266 million customers. However, around 40% of the distribution infrastructure is over 40 years old.

Added to this is a context of growing demand for the electrification of sectors such as transport, heating, and industry. The International Energy Agency (IEA) estimates that electricity demand will double between 2022 and 2050, and that renewables—which are more variable and intermittent—will reach 80% of the distribution grid’s share by 2040.

Renewables Ready, But Offline

The report also reveals a disconnect between the pace of renewable energy deployment and the progress of electricity infrastructure. In 12 countries analyzed, the renewable capacity pending grid connection in 2023 was comparable to the total installed capacity in 2022.

“Renewable projects are being completed faster than grid projects, creating bottlenecks and congestion,” the report states. In 2023, the cost of congestion management grew by 14.5%, with losses of €4.3 billion and 12 terawatt-hours of wasted renewable generation, equivalent to 11% of annual production.

Structural Barriers: Permitting, Equipment, and Personnel

Grid project preparation consumes more than half of the total time required for their execution. The permitting process alone accounts for 25% of the timeframe, with an average duration of 4 years for transmission and 2.5 years for distribution. The delays are due to multiple factors: complex regulations, social opposition, environmental impacts, and poor coordination between administrative levels.

Furthermore, global competition for electrical materials—such as cables and transformers—is intensifying, driving up delivery times and costs. Added to this is the need for skilled labor. According to the report, the operator workforce grew by just 13% between 2014 and 2022, far below the pace required by the energy transition.

Flexibility: A Key to Reducing Investments

One of the main opportunities identified is the use of flexibility measures to avoid unnecessary investments. Strategies such as storage, demand response, and smart grid management can reduce consumption peaks and increase system efficiency.

A notable case is that of Areti, the Rome-based grid operator, which managed to reduce its infrastructure investment needs from €1.075 billion to €406 billion by incorporating flexible solutions, such as load management programs and distributed storage.
“Promoting flexibility can reduce the need for massive grid expansion and improve renewable integration,” the Court states, also highlighting the importance of cross-border interconnections. ENTSO-E estimates that doubling these could save between €5 billion and €9 billion annually in the European electricity system.

Governance: A Shared Responsibility

While the report does not make recommendations, it does highlight the need for better governance at the European level. The European Commission must create stronger regulatory frameworks, coordinate national plans, and promote technical standardization, while Member States are responsible for implementing investments, ensuring strategic planning, and strengthening local capacities.

“The success of the energy transition depends both on the expansion of renewables and on a grid capable of supporting them,” concludes the European Court of Auditors.