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EU needs to align power grids with climate goals

Scenario calls for a 131% increase in European power grid transmission capacity by 2035 to accomodate full phase-out of coal and fossil gas.

Power grid congestion, connection queues, and curtailment are currently all on the rise, highlighting the need for more efficient electricity infrastructure. The European Commission anticipates a 15% increase in electricity consumption in the EU by 2030 compared to 2020. The European Ten-Year Network Development Plan (TYNDP) scenarios forecast a 20–44% rise by 2040. ENTSO-E reports that today’s cross-border transmission capacity, at 93 GW, must double by 2030.

Despite the gradual decentralisation of the energy system, 40% of our distribution grids are already over 40 years old. Ageing grids will need to be replaced, existing ones maintained, and significant investment will be required for new grid infrastructure, totalling up to €584 billion by 2030. It is important that the updates enhance transmission capacities that
accelerate the deployment and integration of renewable energy systems (RES), and address storage needs.

Climate Action Network (CAN) Europe and the European Environmental Bureau (EEB) recently published a report1 titled Wired for Climate Neutrality: A Paris Agreement Compatible (PAC) roadmap for power grids.
The goal of the report is to outline the necessary infrastructure and grid capacities required for a 100% renewable energy system. It charts a course that aligns with achieving climate neutrality across the EU27 by 2040, while ensuring energy security and staying within the +1.5°C threshold.

The updated Paris Agreement Compatible (PAC) 2.0 scenario aims for EU27 climate neutrality by 2040, with coal phased out by 2030, fossil gas by 2035, and oil-based products by 2040, along with nuclear power by 2040. The EU Action Plan for Grids (2023) focuses too little on crucial design aspects such as repurposing and decommissioning existing infrastructures and devising strategies for phasing out the remaining fossil fuels.

To align with the Paris Agreement and ensure compatibility, CAN Europe’s recommendations primarily focus on enhancing the power grid infrastructure. The report emphasises the need for infrastructural changes and selective regulatory or policy adjustments crucial for designing a 100% renewable energy system, thereby elevating the role of RES in the energy landscape. According to the PAC 2.0 results, as compared to 2021, the European power grid’s transmission capacity (EU25 & 12 TYNDP countries) would need to grow by at least +47% by 2030, reaching 404 GW. Furthermore, reaching a 634 GW grid capacity by 2035 means an increase of +131%.

Cross-border interconnection is an important aspect and should prioritise cooperation over competition. Increasing grid interconnection between European countries enables them to exchange electricity more efficiently, reducing unnecessary system losses and constraints. For example, a reinforced grid from Western Europe to Central Europe can facilitate renewable energy transmission and create a stronger backbone in Eastern Europe. The significance of cross-border transmission is evident in the following trade-off: isolating a country necessitates greater storage (and renewable) capacity, while connecting countries with more transmission links reduces the need for storage. Moreover, insufficient transmission levels would lead to higher hydrogen storage requirements and, more critically, a bottleneck in the renewable energy deployment rate due to limited electrical capacity and potentially costly curtailments.

A key strategy outlined by CAN Europe is the coupling of demand reduction with higher RES shares in infrastructure planning. Prioritising energy demand reductions not only leads to lower energy production and transmission capacities but also reduces material and spatial requirements. The report recognises demand reduction as a practical and environmentally friendly strategy that accelerates the energy transition.
Another important recommendation is a substantial increase in renewable energy capacities, aiming for an annual deployment rate ranging from 102 GW to 117.5 GW across the EU by 2040. Another crucial aspect identified is acknowledging RES-based electrification and flexibility as cost optimisation strategies. By promoting a more flexible power system and advancing flexible sectors such as buildings, transport, and industry, it is possible to alleviate pressures on the power grid. Additionally, incorporating energy storage technologies into grid planning ensures resilience and efficiency across various planning horizons.

Buildings could play a crucial role in enhancing flexibility. Renovating buildings has the most significant impact, enabling 44–51% savings in space heating demand and reducing total costs by 14%. Heat pumps, domestic hot water demand, and storage can increase local PV self-consumption by 21–26%, serving as effective flexibility options in buildings. Utilising demand response for electricity, heating, and cooling will lessen the need to operate expensive power plants, particularly during peak demand hours. Demand response allows for temporary reductions or shifts in consumption to periods when more power is available, improving resource efficiency without compromising service quality. Overall, harnessing system flexibility options in buildings means demand-side response by consumers would have a diminished impact on effectiveness, thereby minimising costs and emissions.

A small EV fleet can offer essential flexibility by repurposing batteries for grid use. Electric vehicle batteries have a high potential to replace large utility-scale batteries. This is particularly significant because EV batteries could be repurposed for the grid instead of being recycled, reducing the pressure on mineral resources at the end of their lifecycle, as the IEA recently suggested, making it economically viable. With just 25% participation in demand-side management, system costs can drop by 10%. Fully engaging all EVs could slash costs by 14%, with half the fleet replacing the need for utility-scale batteries. Controlled charging is vital, allowing real-time adjustments to optimise usage. The PAC scenario emphasises car-sharing and electrified transport, reducing the passenger car fleet by 65% by 2040. Even with 35% of the fleet, costs could drop by 14%. EVs acting as batteries provide new storage capacity, supporting a two-way energy system with vehicle-to-grid adoption.

Another important aspect is to foster political vision and strategic planning. CAN Europe emphasises the importance of aligning network development plans and strategies with climate neutrality targets. This entails integrating flexibility and RES-based electrification into planned network developments and related scenarios, ensuring forward-looking grid planning in National Energy and Climate Plans (NECPs) and Long-Term Strategies (LTSs).

The report highlights the importance of recognising substitutes and trade-offs. More efficient infrastructure and increased interconnections can minimise expansion needs, while technologies like home batteries, electric vehicles (EVs), and heat pumps can reduce the demand for large-scale infrastructure.

Improving transparency and data accessibility is essential for informed decision-making and innovation. CAN Europe advocates for public access to national transmission and distribution plans, along with addressing data gaps, to enhance coordination and planning efficiency.

Cross-sectoral dialogue and integrated planning are crucial as RES-based electrification and flexibility measures advance. It is important to have early consultation with communities and stakeholders to ensure inclusivity and transparency in decision-making processes. In contrast to local renewable energy projects like wind farms and solar PV systems, power grid projects often traverse multiple jurisdictions, necessitating thorough review and approval from various authorities along their entire route. This entails preparing route plans, feasibility studies, soil reports, and evaluating conditions and specifications. Stakeholder engagement is crucial throughout the planning process.

For example, the construction of the 340 km Ultranet direct current line in Germany necessitates approximately 13,500 permits. Delays in project execution can stem from complexities in the permitting process, including overburdened permitting agencies, flawed government review procedures, subjective interpretation of regulations, inadequate consideration of relevant regulations by officials, demanding land use change requirements, and inaccuracies in estimations. In Europe, more than a quarter of electricity Projects of Common Interest (PCIs) encounter delays, primarily attributed to challenges in permit acquisition.
Efficient resource utilisation and employment potential can be realised through circular economy requirements and funding for worker training and re-skilling. Additionally, the report emphasises exploring synergies with nature protection and restoration, promoting nature-inclusive designs and strategic spatial planning to minimise environmental impacts.

Poorly planned electricity infrastructure can have negative impacts on wildlife, particularly in rural areas where grid expansions are increasingly necessary. To avoid hindering infrastructure development, it is crucial to address these risks throughout the entire lifecycle of electricity projects, from planning and permitting to construction, operation, and decommissioning.

Mitigation strategies, such as the mitigation hierarchy (avoid, reduce, mitigate, compensate), offer solutions. For instance, using up-to-date bird presence data can help identify alternative sites for power lines, avoiding sensitive habitats and reducing the risk of electrocution by implementing bird-friendly features.

These recommendations by CAN Europe outline a comprehensive approach to aligning power grid infrastructure with climate goals while ensuring sustainability, inclusivity, and efficiency in the energy transition.

1Read the full report here: https://caneurope.org/eu-grids-pac-scenario/

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