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Last Update 11 October 2023

Germany leading race to green Europe’s Grid

The biggest driver of the region’s transmission projects is also among its most efficient

Germany is leading the charge to close Europe’s €40bn-a-year investment gap in preparing the electricity grid for the green transition.

Industry bodies estimate the region must double the amount it invests annually in its transmission and distribution systems, from €40bn to €80bn, to integrate more intermittent renewables and meet electricity demand which is expected to more than double by 2050.

A recent study by market research firm Eninrac has identified which countries have been the most efficient in hitting the delivery targets for new transmission projects included in the European Network of Transmission System Operators for Electricity’s (ENTSO-E) 10-year plans for the region’s grid.

After analysing a decade of transmission infrastructure installation in Europe, Eninrac found that in “Germany, Spain, the UK, Greece and Portugal, the [transmission system operators] have been able to [meet the demands] ENTSO-E has actually listed,” said Ravi Shekhar, head of consulting at Eninrac.

Germany has a bigger role than any other country in advancing cross-border transmission projects in Europe. In its latest 10-year snapshot of European grid works, which was released in May, ENTSO-E identifies 141 cross-border and national transmission projects that are proposed or underway, and are due to complete by 2040.

Analysis by fDi reveals that Germany is party to transmission projects worth a total value of €60.6bn. It is followed by Denmark (€45.1bn) and the Netherlands (€42.8bn). This is in large part due to their collaboration on the continent’s biggest transmission project: the €19.6bn North Sea Wind Power Hub which is a proposed project to transmit offshore wind to shore.

The next three countries undertaking the most transmission works in Europe — which are a combination of national and cross-border projects — are France (€17.1bn), Italy (€16.4bn) and Belgium (€13.5bn)

Regulatory boost

Eninrac’s findings come in the wake of the European Commission’s (EC) doubling down on grid investment. Energy commissioner Kadri Simson has stated the bloc’s 11 million-kilometre grid needs €584bn worth of upgrades and extension by 2030. The EC was also a key figure behind the region’s first High-Level Electricity Grids Forum in September.

Meanwhile, in March, the EC proposed loosening the regulatory restrictions that have held back investment in grid infrastructure across the bloc.

Like in other regions, grid operators in the EU are only permitted to extend or improve transmission and distribution infrastructure after receiving sign-off by the market regulator, who ensures unreasonable costs are not passed on to consumers. In the EU, this has meant upgrades are approved only after a grid operator receives a connection request by a power generator or storage system. “That’s completely unsustainable in a world that needs to change so fast. It needs to adapt to a market reality where everybody wants electricity,” says Kristian Ruby, secretary general of Eurelectric, the European electricity industry’s trade association.

The EC’s proposed Electricity Market Reform would allow grid operators to make so-called ‘anticipatory investments’, which would allow them to take a proactive approach and commence works before receiving new connection requests. Mr Ruby says this is vital to enabling grids to support the EU’s net-zero targets. “If we don’t get that mandate for anticipatory investments, I have very strong doubts that we can serve the needs for additional grid capacity at the speed it is needed,” he explains.

While the changes have been stalled due to member state disagreement on other aspects of the reforms, Ms Simson said in September that she wants the rules in place by year-end.


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