BRUSSELS, May 22, 2024
/PRNewswire/ -- Europe's
distribution grids need to be urgently modernised to enable
massive electrification of transport, heating and industry,
integrate renewables and withstand more frequent extreme weather
and cyber threats. Eurelectric's Grids for
Speed study shows that distribution grid investments
should increase from an average €33 billion to €67 billion per year
from 2025 to 2050, roughly 20% of what the EU spent on fossil fuel
imports in 2023. Getting the grid up to speed will significantly
reduce fossil fuel imports, create more than 2 million jobs, bring
energy savings and deliver more reliable power supply while
accelerating the decarbonisation of Europe's economy.
Societal shifts are changing Europe's energy system at a disruptive speed.
By 2050, electricity will make up 60% of final energy use compared
to 23% today, renewable capacity will have increased six-fold from
2020 with 70% of renewable generation and storage connecting at
distribution level. Connection requests are increasing faster than
grid modernisation and will continue to grow as electrification of
end-use sectors progresses. These developments put a strain on the
grid.
To relieve the strain, annual investments into new and
modernised infrastructure, including digitalisation, should reach
€67 billion from 2025 to 2050, around 0.4% of EU GDP.
Forward-looking grid strategies such as anticipatory investments,
optimal asset management and grid-friendly flexibility could lower
this to €55 billion per year if properly implemented. Failure to
invest would jeopardise 74% of prospective connections in key
decarbonisation technologies such as electric vehicles (EVs), heat
pumps and renewables. Investing, on the contrary, will accelerate
electrification and help the EU save €309 billion every year on
fossil fuel imports from 2040 to 2050.
"For a successful energy transition the EU needs massive amounts
of additional grid capacity. Investment volumes for distribution
system operators needs to double. Whilst this will require a
significant ramp up, the cost of not investing is even higher. To
succeed we need attractive returns for investors to be able to
finance it, technology and fast electrification to manage the
distribution fees." says Eurelectric's President and E.ON CEO
Leonhard Birnbaum.
Scaling grid investments requires a dual effort. National
authorities should implement the agreed legislation – such as
anticipatory investments – while adapting the regulatory regime to
support the investment surge. This means eliminating investments
caps, fast-tracking grid permitting and procurement procedures and
de-risking investments to spur private funding while opening up of
public financing through EU budget.
Futureproofing the grid also depends on the supply chain. Even
if necessary investments are met, current shortages of copper, a
talent deficit, extended manufacturing lead times and transformers'
costs can hamper infrastructure development. Such bottlenecks must
be addressed through strategic planning, enhanced collaboration
between policymakers and industries and new training initiatives to
ensure a skilled workforce.
Eurelectric calls on policymakers both at national and regional
level to secure grid investments, strengthen supply chains and
unleash the societal benefits of Grids for Speed.
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SOURCE Eurelectric