Europe’s ambitious climate goals have set the stage for a massive transformation of its energy landscape. With renewable energy capacity expected to more than double from 400 GW in 2022 to at least 1,000 GW by 2030, and electricity consumption projected to grow by 60% in the same period, Europe faces an unprecedented challenge: its aging grid infrastructure simply isn’t ready for the clean energy revolution.
The growing urgency of grid modernization
At WElink Energy, WE see firsthand the critical importance of robust electricity networks. Our Solara4 project—with 219MW of operational solar, 264MW of wind energy from 40 turbines, and 100MW of battery storage—will deliver over 600MW of clean energy capacity, generating approximately 1.1TWh annually. Yet the success of such projects across Europe depends entirely on having modern, flexible grid infrastructure to distribute this power.
The challenge is stark: 40% of Europe’s distribution grids are more than 40 years old. These aging networks were designed for a centralized system dominated by large fossil fuel plants—not the distributed, variable renewable energy sources transforming today’s energy landscape. The European Commission estimates that €584 billion in grid investments are needed by 2030 to meet growing electricity demand and achieve renewable energy targets.
Alt text for image: European transmission and distribution network investments, 2015-2024, € billions
The EU action plan for grids: A framework for progress
Recognizing this urgent need, the European Commission launched the EU Action Plan for Grids in November 2023. This comprehensive initiative tackles the key challenges in expanding, digitalizing, and optimizing electricity networks across the continent. The plan outlines seven strategic objectives:
- Accelerating cross-border infrastructure projects by strengthening support for Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs)
- Improving long-term planning by enhancing visibility of network needs, especially at the distribution level
- Introducing regulatory incentives for forward-looking grid development that anticipates future needs
- Optimizing existing grid usage by increasing transparency about available capacity and promoting smart grid technologies
- Improving access to financing through tailored models and enhanced dialogue with private investors
- Streamlining permitting processes with guidance and technical assistance on implementing existing legislative tools
- Strengthening supply chains by establishing common specifications and facilitating investments in manufacturing capacity
The pact for engagement: bringing stakeholders together
A crucial component of the EU’s grid strategy is the Pact for Engagement, which promotes early, regular, and meaningful stakeholder engagement in grid development projects. This initiative recognizes that public acceptance is often a significant barrier to infrastructure development.
The European Commission, together with the EU Agency for the Cooperation of Energy Regulators (ACER) and the Renewables Grid Initiative (RGI), is currently surveying grid operators and regulators to better understand practices, opportunities, and challenges related to stakeholder engagement frameworks. This collaborative approach aims to enhance regulatory environments and develop dedicated stakeholder engagement chapters that accompany grid investment plans.
Policy framework for the 2024-2029 legislative cycle
The EU’s grid policy framework is comprehensive, with over 80 action points identified for implementation at both European and Member State levels. Recent policy documents—including the EU Action Plan for Grids, the revised Electricity Market legislation, the revised Renewable Energy Directive, and the EU Action Plan for Digitizing the Energy System—all contribute to this framework.
With the Council’s Strategic Agenda and Political Guidelines for the next European Commission clearly prioritizing grid investment, WE can expect continued focus on this critical infrastructure during the 2024-2029 legislative cycle.
Challenges and opportunities
Despite these positive developments, significant challenges remain:
Financing gap: While the need for investment is estimated at €584 billion, dedicated funding linked to the Action Plan amounts to just €6 billion for Projects of Common and Mutual Interest.
Non-binding priorities: Many of the actions outlined in the framework lack sufficient legislative teeth, representing guidelines rather than requirements.
Connection queues: Renewable projects face lengthy delays for grid connections, hampering the speed of the energy transition.
Supply chain bottlenecks: Grid project promoters face long lead times for critical components due to tight supply and rising raw material prices.
Yet these challenges also present opportunities. The push for grid modernization will drive innovation in smart grid technologies, create jobs in infrastructure development, and ultimately enable a more resilient, efficient, and sustainable energy system.
The path forward
For Europe to achieve its climate and energy goals, grid infrastructure must receive the same level of attention and investment as renewable energy generation. This requires:
- Increased funding: Beyond the €6 billion allocated to PCIs and PMIs, significant additional financing must be mobilized from both public and private sources.
- Regulatory reform: Streamlined permitting processes and forward-looking investment frameworks are essential to accelerate grid development.
- Technology adoption: Smart grid technologies can optimize the use of existing infrastructure while new capacity is being built.
- Stakeholder engagement: Early and meaningful involvement of local communities and other stakeholders is crucial for social acceptance.
- Supply chain strengthening: Common technical specifications and investments in manufacturing capacity will help address component shortages.
At WElink Energy, WE believe that the transition to a clean energy future depends on a modern, robust grid infrastructure. Our 4GW portfolio across Europe and Africa is contributing to this future, but its full potential can only be realized with continued investment in the networks that connect clean power to consumers.
The EU has laid a solid foundation with its grid policy framework. Now it’s time to build on this foundation with concrete actions, sufficient funding, and collaborative efforts from all stakeholders. Only then can Europe’s grid infrastructure become the enabler—rather than the bottleneck—of the clean energy revolution.
