‘Invest ahead to get ready for net zero’ – Eurelectric

26 March 2024

The EU has recognised the need to future-proof its power infrastructure to connect new renewables on a large scale and accommodate the increased electrification, of industry, transports and heating.

It is time, says Eurelectic, the association that represents the common interests of the European electricity industry, for national authorities to follow suit and allow system operators to make anticipatory investments to get the grid up to speed. Its latest report ‘Invest ahead to get Europe’s power infrastructure ready for net zero’ is intended to show how to effectively enable such investments across Europe.

Today around 3000 GW of renewable projects are queueing up for grid connection worldwide. In Europe, current regulatory frameworks allow distribution system operators to invest in building out the power grid only after a connection request is made. With faster decarbonisation and long lead times for grid build-out, addressing future electricity needs at the required speed and scale will be extremely challenging, and grid investments cannot lag at a time when the EU is calling for electrification to reach 50% of final energy consumption by 2040.

Changing course is possible however. Anticipatory investments can address the expected future infrastructure needs by looking beyond immediate requirements of generation and demand. This was recognised in the EU electricity market reform, and in its Action Plan for Grids, but it must, says Eurelectric, be urgently translated into national implementation.

The organisation’s secretary general Kristian Ruby commented: "National regulators must transition to a forward-looking mindset and allow DSOs to proactively invest in the infrastructure needed for net-zero. The cost of inaction for society will be much higher than temporarily investing at a higher level to ensure our grid can deliver all necessary services to society in a decarbonised economy."

Steps needed

For this to happen, national regulators must remove barriers and incentivise DSOs to invest ahead with fair remuneration and a stable investment environment. Given that they are the ones managing delivery of electricity, DSOs should be entrusted to plan grid expansion and digitalisation. This implies stronger co-operation with transmission operators and local authorities in infrastructure planning in line with decarbonisation objectives.

To avoid complexity, anticipatory investments should be included within the existing tariff framework and incorporated into EU countries network development plans to ensure coordination and clarity.

It's time to ensure society can benefit from decarbonisation in the long term, rather than solely focusing on short-term cost reductions. Eurelectric calls on policymakers and national regulators to swiftly enable anticipatory investments.

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