"There is No Transition Without Transmission: Unlocking Europe's Green Energy Potential"

Here is a deep dive into the recently published Ember report 'Putting the mission in transmission: Grids for Europe’s energy transition'.

Ember is an independent energy think tank that uses data and policy to accelerate the clean energy transition. The report emphasises that there is no transition without transmission!

The report aims to contribute to the current debate on power grids by analysing the present state and future developments of national transmission grids in Europe, framed within the context of energy transition. The report analyses data related to national electricity transmission networks across 35 European countries, assessing their readiness to deliver on power sector needs for the energy transition.

Unpacking the Essentials: The Core Insights

The Investment Imperative

At the core of this transition is the undeniable need for substantial investment in our grid infrastructure. The Ember report paints a clear picture of the financial chasm we must bridge - to the tune of an average of €85 billion per year. This is a leap from our current expenditure €63 billion per year, highlighting a gap that we must close to fuel our journey towards sustainability.

Several TSOs already foresee this need for increasing investment. For instance, the grid plan by France’s TSO RTE notes that its current average spending of €400 million per year will need to rise to an average of €650 million per year between 2020 and 2035, doubling after 2035 to reach approximately €1.3 billion per year.

Please refer to the image below.

These investment figures allow us to create a more complete picture of current grid spending by EU member states. Approximately €28 billion is earmarked for annual investment in the transmission grid, and spending on the distribution grid in 2022 reached €35 billion. This amounts to a yearly total investment of approximately €63 billion, surpassing the figure put forward by the European Commission of €58.4 billion annually.

The Planning Paradox

Our ambitions for a cleaner future are only as robust as the frameworks that support them. The disconnect between the renewable energy goals set by nations and the grid planning processes that should underpin these goals is a stark reminder of the need for alignment. Without this synchronization, our aspirations risk being grounded before they can take flight.

⦁ Eleven out of 26 grid plans are based on lower wind and solar deployment than national targets - This appears to be primarily a consequence of the grid planning process lagging behind energy policy updates.

⦁ Nineteen out of 23 national grid plans examined undershoot the deployment of solar expected under Solar Power Europe’s business-as-usual scenario by 205 GW by 2030.

Please refer the images below for insights on grid plans versus renewable targets.

Realising the Scale of Expansions And - Accounting Hydrogen Strategies

Today, our collective investment in grid infrastructure, while exceeding past estimates, still falls short of meeting the future demands of a renewable-powered Europe. This discrepancy calls for a reimagined approach to funding and prioritizing our energy highways, ensuring they are robust enough to carry the weight of our green ambitions.

Please refer the images below

Hydrogen production and consumption, which is receiving increasing attention following the publication of REPowerEU, has significant implications for the power grid. Electricity TSOs are thus progressively incorporating these considerations into their grid plans, although some only consider one side of this equation.

Integrating the structural effects of hydrogen demand and supply in electricity grid planning is also necessary for both electricity and gas TSOs to analyse the optimal sizing of grid infrastructure. For instance, strategic deployment of electrolyser plants could reduce bottlenecks in the electricity transmission grid and lower the need for grid expansion.

Strategic Imperatives for a Future-Ready Grid

1. Elevating Grids in Political Discourse: The criticality of transmission grids in realizing our energy and climate objectives cannot be overstated. Like the bold initiatives seen in the US and the Netherlands, embedding the importance of grid infrastructure in political agendas can catalyse the support and funding needed to accelerate development projects .
2. Revamping Regulatory Frameworks: The agility of our planning and investment strategies hinges on regulatory environments that encourage forward-thinking and adaptability. By allowing Transmission System Operators (TSOs) to plan with an eye on the future, we can ensure our grid infrastructure is not just adequate for today but primed for tomorrow.
3. Intensifying Oversight and Scrutiny: The planning and development of our grids, given their central role in energy security and the transition, warrant enhanced oversight. This scrutiny ensures that our infrastructural ambitions align with the urgent need for decarbonization, positioning our grids not just as passive conduits but as active enablers of change.

A Collective Call to Action

The path to a renewable future is paved with collaboration. It beckons us -investors, TSOs, utilities, suppliers, regulators, policymakers, and government entities - to come together in a united effort to transform our grid infrastructure. This is not merely a technical challenge; it is a profound opportunity to lead the charge towards a sustainable and resilient energy landscape.

As we stand on the brink of this transformative era, let us harness the power of unity and innovation. Let our collective action be the driving force that propels Europe into a green and prosperous future. Together, we can bridge the gap and turn the vision of a renewable-powered continent into reality.