Out-Law News 3 min. read
01 Dec 2023, 10:36 am
The EU has unveiled an action plan to overhaul its ageing electricity infrastructure in a bid to meet growing renewable energy demands.
The European Commission said that electricity consumption is set to increase by around 60% by 2030 and that more renewable energy will have to be generated and transported in a “more decentralised and digitised and flexible” system.
According to the plan, cross-border infrastructure between member states needs to double by 2030 – providing an increase of 64 gigawatts (GW) of cross-border transmission on top of the 93 GW of cross-border power connectors that currently exists. In total, the Commission estimates that the upgrades will cost €584 billion.
Richard Murphy, energy infrastructure expert at Pinsent Masons, said: “The EU’s legal architecture is highly dependent on decisions taken at a national level. This was evident with the revenue caps on inframarginal generators. Whilst EU rules at one level have become much more detailed, prescriptive and technical in nature in recent years, they now also increasingly reflect large elements of co-regulation. This shift to a more decentralised approach of lawmaking has resulted in the ‘lumpy’ implementation of rules across member states.”
“For the action plan to deliver in relation to important areas of anticipatory investments needed to move at pace and scale across the single market, consistency of implementation across member states will be crucial. It will also be important to consider how the plan interfaces with underlying existing domestic processes and systems in areas of planning and permitting to ensure there is no conflict,” he said.
For the action plan to deliver, consistency of implementation across member states will be crucial
As part of the plan, the Commission announced 166 new ‘projects of common interest’ (PCI) - the majority of which relate to electricity and hydrogen production. Half of the PCIs will modernise the EU’s power networks and increase its energy storage capacity. They will also support 12 offshore projects in the North Sea, Baltic Sea and the Atlantic.
Paris-based energy projects expert Eran Chvika of Pinsent Masons said: “The EU grid connection plan falls within a perfect timing in France, showing complementarity between national and regional scales. In France, with the Act on Accelerating Renewable Energy Production, enforced in March 2023, and subsequent Ordinance focusing on grid connection acceleration, regulations now require that grid connection of renewable energy plants is completed within 12 months, as from the date at which the DSO receives the grid connection agreement executed by the producer – against 18 months until recently.”
“In practice, this timeframe is often exposed to mandatory grid reinforcement works which are completed on an empirical basis where the queue for grid connection exceeds the capacities. This often causes developers to try and secure their grid connection earlier in their development. With the EU’s grid action plan, we can now hope that grid infrastructures will be reinforced by anticipation, allowing easier and quicker grid connection, thus paving the way to a higher share of renewable energy in the electric mix,” he said.
Chvika described the plan as “a remarkable signal send to renewable energy producers, showing that institutions tackle the issue”.
“We can only hope that this will help lift national constraints, such as the 17 MW per delivery substation threshold, or grant derogations that last more than 4 to 8 years,” he said. “We can also hope that new regulation will open the gate to new opportunities in terms of storage and hybrid grid connection – ie connecting a wind farm and a PV plant to a single injection point.”
Madrid-based public policy expert Amaia Rivas Kortazar of Pinsent Masons said that the targets set out in the plan aligned with those in Spain’s draft National Integrated Energy and Climate Plan 2021-30 (PNIEC), which envisages a 74% share of Spain’s national electricity consumption will be delivered by renewable sources by 2030.
“With the target to minimise renewable energy discharges, match electricity generation and demand, maximise the use of renewable energy and maximise the demand, maximise the use of grid capacity and reduce the need for fossil-fired thermal power plants, fossil-fired thermal power plants as a back-up system, it is necessary to reinforce and grow the transmission and distribution lines in national territory, including peninsular connections, non-peninsular systems peninsular, non-peninsular systems and interconnections between island systems,” she said. “To that purpose, it is also considered necessary to develop the appropriate regulatory framework and to promote certain actions that allow progress to be made towards a more flexible electricity system, which minimises spillages and makes better use of the existing infrastructure, through the use of storage and demand-side management and current connection criteria.”
“Specifically, PNIEC foresees as action measures, among others: the adaptation of the planning of transmission and distribution electricity grids; an important and major process of digitalisation of the grids that will allow them to improve their monitoring, control and automation systems; and the redefinition of the criteria for defining access and connection capacity at each grid node. For that purpose, PNIEC introduces the target of allocating a cumulative investment in grids and electrification of more than €58bn until 2030,” she said.