Planned electricity grid investments fall short of expansion needs – EU Court of Auditors

Planned investments to expand and modernise the EU's electricity grids by 2050 fall short of the necessary amounts of money required to support the bloc's move to climate neutrality, the European Court of Auditors has said. At the current pace, planned investments between 2024 and 2050 total 1,871 billion euros. However, between 1,994 and 2,294 billion euros are needed in grid investments to support the expansion of renewables and ensure the infrastructure is ready for the expected rise in power demand, according to estimates by the European Commission.

Stronger efforts are urgently needed to increase the pace of investment, said the auditors, but it is also important to consider whether investments could be replaced by smarter or cheaper measures, such as strengthening system flexibility. "The pressure on the grid could be reduced by adapting more flexibly to daily, weekly and seasonal fluctuations in energy consumption and production," their review noted. Suggested measures include rolling out smart meters to enable demand-side flexibility, building more cross-border interconnectors and expanding storage solutions.

Where investments in grid modernisation are clearly needed, countries should act fast to reduce future costs and prevent physical or digital damage from extreme weather events or cyber-attacks, the auditors added. Countries should also simplify planning and permitting procedures to prevent delays from causing additional costs, as well as consider the ways in which investments are ultimately funded to ensure that the impact on households and industry remains as small as possible. "There are regulations on how much operators can earn and how they are remunerated," the Court of Auditors wrote. "However, balancing the need for investment with keeping electricity costs down for consumers, especially for households and energy-intensive industries, is a challenge."

The EU's grid covers 11.3 million kilometres and connects to 266 million households and businesses. It forms the backbone of a clean future where industry, heating and transport are all powered by electricity. Successfully modernising and expanding grids will depend on overcoming key challenges such as poor network planning, lengthy approval procedures, limited public acceptance and a lack of material resources and skilled workers, the auditors said.