Europe’s energy transition faces a critical challenge: the need to accelerate the development of electrical infrastructure to integrate renewable energy, increase electrification, and ensure economic competitiveness. According to the 2024 report from the Agency for the Cooperation of Energy Regulators (ACER), current investments in local, national, and cross-border electricity grids must be doubled to meet the 2050 climate goals.

Insufficient and Misaligned Investments

The report highlights an alarming gap in the investments needed to meet future demands. According to the European Union’s Ten-Year Network Development Plan (TYNDP), 50% of the identified cross-border capacity needs for 2030 have no planned projects. This equates to 32 GW of missing capacity in 2030 and 37 GW in 2040. “Without these investments, Europe could lose the benefits of an interconnected electricity market, including supply security and price stability,” warns ACER.

Moreover, some proposed projects are not aligned with identified needs, leading to inefficient use of resources. “Planning based on robust analysis is key to avoid unnecessary investments that increase costs for consumers,” the report stresses.

Delays in Permits and Construction

One of the biggest challenges for the development of electrical infrastructure in Europe is the long duration of projects, averaging more than 10 years from planning to construction. More than half of this time is spent on permitting processes, often hindered by public opposition and misalignment between local, national, and European regulators.

ACER’s report reveals that 66% of projects of common interest (PCIs) reported delays in their implementation dates, mainly due to delays in obtaining permits. These delays directly affect Europe’s ability to integrate new renewable energy sources, such as the more than 500 GW of pending wind projects in countries like Germany, Spain, and Italy.

“It is essential to streamline permitting processes to ensure that the necessary capacities are available on time,” the report emphasizes. Additionally, the lack of qualified personnel and global competition for critical materials exacerbates implementation challenges.

Integrated Planning as a Key Solution

ACER calls for adopting a multisectoral approach to electricity grid planning, integrating gas, electricity, and hydrogen to optimize investments and leverage synergies between sectors. “The future of the European energy system will depend on the ability to plan in an integrated manner and coordinate actions at the local, national, and regional levels,” says the agency.

The use of innovative technologies, such as digitalization and grid-enhancing technologies (GETs), could be a game-changer in this area. These solutions not only improve network efficiency but also reduce the need for costly new infrastructure.

Impact on Competitiveness and Affordability

The report warns that the costs of electricity grids could rise by up to 60% by 2050, affecting the EU’s global competitiveness. Companies and consumers connected to distribution grids will bear the majority of these costs, which will account for two-thirds of future investments.

“It is crucial to keep costs under control while accelerating the development of infrastructure,” highlights ACER. Proposals such as revising grid tariffs and establishing coordinated funding mechanisms at the European level are essential to balance the economic impact on different user groups.

The Path to a Successful Energy Transition

Despite the challenges, the report concludes that Europe has the potential to overcome these barriers through closer collaboration between transmission system operators (TSOs), distribution system operators (DSOs), and regulators. “Cooperation is key to ensuring that investments in electricity infrastructure support the energy transition and are sustainable in the long term,” ACER states.

Additionally, the agency urges member states to strengthen their supply chains and invest in training to overcome the shortage of skilled labor, which has become a critical bottleneck for the development of electrical projects.

With proper planning, the development of innovative technologies, and the commitment of key stakeholders, Europe can establish itself as a global leader in energy transition, ensuring a competitive, sustainable, and accessible electricity system for all.