The EU has recognised the need to future-proof its power infrastructure to connect new renewable energy capacity and accommodate the increased electrification, of industry, transport and heating.
Eurelectric says it is time for national authorities to follow suit and allow system operators to make anticipatory investments to upgrade and expand grids.
The electricity industry’s new report shows how to effectively enable such investments across Europe.
In Europe, current regulatory frameworks allow distribution system operators (DSOs) 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.
Grid investments cannot lag at a time when the EU is calling for electrification to reach 50% of final energy consumption by 2040.
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 Action Plan for Grids, but must be urgently translated into national implementation.
Eurelectric’s secretary general Kristian Ruby said: “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.”
For this to happen, national regulators must remove barriers and incentivise DSOs to invest ahead with fair remuneration and a stable investment environment.
Given they are the ones managing delivery of electricity, DSOs should be entrusted to plan grid expansion and digitalisation.
This means stronger cooperation 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, said Eurelectric.