more renewables. Massive electricity grid investments are needed to integrate renewables and growing electrification by 2030.
2024 Monitoring Report
ACER’s first Monitoring Report on electricity infrastructure emphasises that a cost-effective development of distribution, transmission and cross-border capacities is instrumental to achieve a secure, sustainable and competitive EU energy system.
The report focuses on electricity grids developments as multi-sectoral planning is not yet a reality. Power grids play a crucial role in connecting more renewables, rising demand and fostering market integration alongside the power sector’s progressive integration with other energy carriers, such as hydrogen.
What trends did ACER monitoring find?
- As Europe moves towards a decarbonised energy system, links between electricity, gas and hydrogen will grow. Developing infrastructure in a coordinated, cost-effective way is key.
- Massive investment in local, national and cross-border electricity grids is needed to keep pace with the growth in renewables and power consumption.
- High stakes of power grid delays in building grid capacity: Half of cross-border capacity needs in Europe had no matching investment planned in the 2022 pan-European power grid plan showing that substantial cross-border needs remain unaddressed by current grid projects; while building interconnections takes on average 10 years from inception to operation. Without these investments, Europe risks missing out on the benefits of EU power market integration such as security of supply, resilience to price and supply shocks, unlocking and sharing flexibility as well as enabling the clean energy transition.
- Containing electricity system costs is key for EU competitiveness: Annual power grid investment needs to double, reaching up to EUR 100 billion per year. Network costs may increase by 20-40% by 2030, and possibly up to 100% by 2050. For EU competitiveness, power system costs (which include network costs, expenses associated with support schemes such as national capacity mechanisms etc.) need to be contained as they are one of the main drivers of electricity costs.
- Targeted development of distribution, transmission and cross-border capacities is essential for a secure, sustainable and competitive EU energy system. This requires comprehensive monitoring to track whether infrastructure keeps pace with the energy transition. However, this first report identifies that data for national transmission and distribution grid planning and investment is not easily available or comparable. ACER’s current electricity grid monitoring covers merely 10% to 15% of all power grid investments in the EU.
What are ACER’s recommendations?
- Better planning: Transmission and Distribution System Operators (TSOs and DSOs) need to plan better at all grid levels (local, national and cross-border) based on market needs and net benefits.
- Efficiency first: make better use of existing grids: Beyond planning, TSOs and DSOs should optimise the use of current grids before investing in new ones. When more grid capacity is needed, innovative grid technologies should be considered alongside traditional grid investments.
- Carefully monitor investments across all grid levels to track how grid developments keep pace with the energy transition and market evolutions.
Highlights
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2.5 times
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High stakes
of persistent delays in increasing power grid capacity. 50% of cross-border capacity needs identified by network operators are not being addressed. Others take 10 years from inception to operation.
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50% to 100%
potential increase in electricity grid upgrade costs for consumers by 2050.
Report
ACER’s first electricity infrastructure monitoring report:
- Assesses the cost impacts of investing in electricity transmission and distribution networks to keep pace with the energy transition.
- Analyses how cross-border electricity network planning aligns with grid capacity needs.
Infographic
Interested in the main highlights of the report?