EU Commission presents guidelines for grid investments

03.06.2025

Source: E & M powernews

The EU Commission wants to support forward-looking investments for future-proof electricity grids with a new guideline.

According to the EU Commission, the investment requirement for the transmission and distribution grids in the Union will amount to around 1.2 trillion euros by 2040 - of which 730 billion euros will be for distribution grids and 477 billion euros for transmission grids. The guidelines now published are aimed at member states, national regulatory authorities and grid operators and aim to create suitable framework conditions for investments that go beyond existing grid connection requests.

According to the Commission, forward-looking investments should be geared towards medium to long-term requirements as identified in national and European network development plans. Such investments could include grid reinforcements, preparatory work for the expansion of transformer stations or the laying of additional empty conduits to enable subsequent capacity expansions. In particular, they are intended to facilitate the implementation of projects in accelerated expansion areas for renewables or offshore development zones.

The guidelines are divided into three central areas: Grid planning, regulatory assessment and costs and incentives. According to the Commission, grid planning should be based on well-founded scenarios of future electricity generation and future demand and also include national energy and climate plans. In addition, the relevant stakeholders should be consulted at an early planning stage in order to realistically assess the need for expansion.

National regulatory authorities should have sufficient specialist staff and expertise to be able to assess grid development plans at distribution grid level. They should also have instruments at their disposal to provide targeted incentives for forward-looking investments. A stable and balanced regulatory framework is essential in order to make investments plannable for project sponsors and at the same time protect consumer interests.

Early and clear allocation of risks

In the context of investments, the Commission recommends an early and clear allocation of risks to subsequent grid use. A two-stage approval process, consisting of a design and approval phase and subsequent construction, is also conceivable. Once approved, investments should not be called into question retrospectively - for example, if the initial utilization of the infrastructure is below expectations.

With regard to grid and connection fees, it is proposed that in future these should not only reflect existing grid capacities, but also planned investments. This could direct new generation and consumption units to locations where the grid is being prepared or will soon be expanded.

In addition, it is suggested that, if necessary, state guarantees or budget funds could be used to absorb additional costs in the course of decarbonization and market integration. However, this must be done in accordance with the applicable state aid and regulatory framework.

With the guidelines, the Commission is implementing a measure from the EU Action Plan for Networks of 2023. The aim is to overcome structural bottlenecks in grid expansion, which currently lead to long grid connection procedures, which in turn undermines the EU's efforts to decarbonize the economy. The 2024 reform of the European electricity market design had already explicitly anchored forward-looking investments in EU regulations.

The guidelines are based on several consultations, including two editions of the Copenhagen Infrastructure Forum, two targeted stakeholder surveys and workshops in Brussels. Comments from the European regulatory organizations Acer and CEER have also been incorporated into the document.

As a next step, the Commission has announced that it will present a comprehensive "European Grids Package" by the end of 2025. The public consultation on this is already underway and ends on August 5. Member states and regulatory authorities are requested to take the recommendations of the guidance into account now when further developing national planning and approval frameworks.

The "Guidance on anticipatory investments for developing forward-looking electricity networks" is available in English on the Commission's website.

Author: Fritz Wilhelm