Europe needs to boost distribution grid investments from an average of €33bn ($35.79bn) to €67bn annually between 2025 and 2050, according to Eurelectric’s latest report entitled Grids for Speed.
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The study, conducted in collaboration with EY, concluded that the significant investment is essential to accommodate the projected societal shifts towards electrification and renewables.
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The European energy landscape foresees electricity accounting for 60% of final energy consumption by 2050, a significant increase from the current 23%, the report found. Meanwhile, the report envisioned a sixfold rise in renewable capacity in Europe by 2050, with 70% of renewable generation and storage expected to connect at the distribution level.
The ambitious investment will not only enhance grid reliability and energy savings but also help generate more than two million jobs, the study claimed.
Failure to meet the investment target, on the other hand, could put at risk up to 74% of potential connections for crucial decarbonisation technologies such as electric vehicles, heat pumps and renewables.
The report stressed that although €67bn may seem like a daunting number, it is only 20% of what the EU spent on fossil fuel imports in 2023.
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By GlobalDataE.ON CEO and Eurelectric’s president, Leonhard Birnbaum, said in a press release announcing the report: “For a successful energy transition the EU needs massive amounts of additional grid capacity. Investment volumes for distribution system operators need to double. Whilst this will require a significant ramp up, the cost of not investing is even higher.”
Speaking at Power Summit 2024 in Athens on Wednesday, Eurelectric Secretary General Kristian Ruby said that the required €67bn investment can be lowered by 18% to €55bn if proper measures are put in place, including anticipatory investment, asset performance excellence and grid-friendly flexibility. New technologies such as smart transformers, dynamic line rating and digital twins can reduce the costs even more, he said.
Ruby added that the expansion of grids won’t have a major impact on distribution prices, although this will only be the case if Europe electrifies.
Power Technology is in attendance at Power Summit 2024, with reporter Jackie Park available for interviews on the ground. Contact her at jackie.park@globaldata.com to arrange timings and discuss topics.
