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The EU will take a new top-down approach to building its cross-border energy grid, as the bloc’s energy chief warned of billions lost from bottlenecks and a failure to match supply with demand.
Brussels will develop a central plan to identify where investment is needed and will find projects to fill those gaps, in order to push EU countries to better co-ordinate energy infrastructure across borders and sectors.
Dan Jørgensen, the EU commissioner for energy, told the Financial Times that the “biggest danger” to the bloc’s decarbonisation and energy security goals was the slow construction of its power grid.
“In Europe, it’s a huge problem and we lose billions every year in lost value because of curtailment and bottlenecks,” he said.
Costs from grid congestion reached €5.2bn in 2022, and could rise to €26bn by 2030, according to figures from the EU energy regulator ACER.
The European Commission would work with member states and transmission system operators to find where investment was most needed, said Jørgensen, who insisted the new method would not constitute a power grab by Brussels.
“This is not a zero-sum game where the EU gets more power, thereby the member states get less power. Actually, by giving the EU new competences here, we will also empower member states to do more and better,” he said, adding that it marked a “paradigm shift” in infrastructure planning.
The EU, which was originally founded as a steel and coal union, has consistently struggled to improve its internal market for energy. An “energy union” that was first proposed in 2015 has yet to be completed.
“It is a bit of a paradox that we have an internal market that works better for selling tomatoes or toothpaste than it does for energy, since energy clearly is so important right now for our competitiveness, for our security and, of course, everybody wants to fight climate change,” Jørgensen said.
The rapid build-out of renewables such as wind and solar, which are far more volatile and dispersed power sources than gas or coal power plants, means there is an even greater need to upgrade and improve the grid.
The commission will develop “a comprehensive central EU scenario” for energy infrastructure planning, according to a draft document due to be presented next Wednesday.
Brussels would also undertake a “gap-filling” process, it said, that would “propose projects to address unmatched needs” in energy grids.
According to a report last month by the German think-tank Agora Energiewende, the EU could save more than €560bn between 2030 and 2050 if EU countries co-ordinated their energy infrastructure planning across sectors.
“A top-down approach to scenario-building would help identify areas where investment is needed,” the report said.
A major blackout on the Iberian peninsula in April and electricity price spikes in Greece last summer have strengthened the argument for more intervention from Brussels, officials have said.
Brussels will also establish an EU-level effort to simplify and speed up permitting procedures, which can take several years at present and hamper projects with a hefty administrative burden.
But Nicolás González Casares, a Spanish socialist lawmaker who led negotiations on the EU’s electricity market last year, said he was “particularly worried” that the commission’s new approach risked overriding environmental protections and creating legal uncertainty by assuming tacit approval for projects in order to speed up construction timelines. “The energy transition will only succeed if it is fast, but also fair and sustainable,” he said.
The first test of the new approach will be on eight proposed “energy highways”, which include interconnectors across the Pyrenees, cables linking Cyprus to mainland Europe and pipelines for hydrogen in south and south-west Europe.
The commission will also publish guidance for member states on prioritising critical projects for grid connection in an effort to reduce queues that are in some cases years long and have led to power-rationing in some countries.