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Europe needs to double its annual investments in grids to keep net zero in sight by enabling electrification of transport, heating, and industry, and integrating rising renewable energy sources, Eurelectric, the federation of the European electricity industry, said in a report on Wednesday.
Europe's investments in distribution grids should jump to as much as $72.5 billion (67 billion euros) per year from 2025 to 2050, up from a current annual average investment of $36 billion (33 billion euros), Eurelectric's Grids for Speed study showed.
"Getting the grid up to speed will create more than 2 million jobs, bring greater energy savings and deliver more reliable power supply while accelerating the decarbonisation of Europe's economy," the European electricity industry group said.
The rise of renewables and EVs has led to grid connection requests rising faster than the speed of grid modernization, Eurelectric says, estimating that electricity will make up 60% of final energy use in Europe by 2050, compared to 23% today. Renewable capacity will have increased six-fold from 2020 with 70% of renewable generation and storage connecting at distribution level, the federation noted.
"For a successful energy transition the EU needs massive amounts of additional grid capacity. Investment volumes for distribution system operators needs to double," said Eurelectric's President and E.ON chief executive Leonhard Birnbaum.
"Whilst this will require a significant ramp up, the cost of not investing is even higher. To succeed we need attractive returns for investors to be able to finance it, technology and fast electrification to manage the distribution fees."
Grid investments are lagging behind renewable additions and a lack of transmission capacity could hold back the energy transition, energy think tank Ember said in a report earlier this year.
"Making sure solar and wind can actually connect to the system is as critical as the panels and turbines themselves," says Elisabeth Cremona, Energy & Climate Data Analyst at Ember.
"There is no transition without transmission."
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More
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