Grids risk hindering Europe’s energy transition

Europe needs to revise its outdated grid plans to prepare for a surge in wind and solar power installations.

In Europe, the transition to turbocharged electricity is in full swing. Wind and solar capacity additions continue to break records. The outlook for solar power remains positive, with Wind Europe recently predicting that increased annual installations will bring the European Union closer to his REPowerEU targets for wind power.

This is good news for Europe, especially amid geopolitical tensions and high inflation. A cleaner power mix reduces power prices, benefiting both consumers and industry. Indeed, there is a clear link between the success of the energy transition and Europe’s industrial competitiveness and financial stability. Clean electricity is also important for reducing Europe’s dependence on unstable fossil fuel imports and ensuring energy security across the region.

But as investment in clean technology reaches record levels, we are facing a previously overlooked wall in grid capacity. Signs of stress in the system are becoming increasingly visible, drawing attention to the central role of the electricity grid in the decarbonization of Europe’s economy and pushing this onto the political agenda. More than 600 GW of wind and solar is in the pipeline in just four European countries, with already long queues for grid connection, while renewables are increasingly subject to curtailment. ing.

Therefore, the problem is not with renewable energy, but with the power grid to which renewable energy needs to be connected. There is a direct relationship between the reduction of renewable energy due to grid congestion and the lack of progress in grid development.

Not fit for purpose

The grid planning method is no longer fit for purpose. A recent report by energy think tank Ember suggests that network planning frameworks are not in line with the realities of a full-scale energy transition.

Enver’s analysis compared the grid plans of 26 European transmission system operators (TSOs) with each country’s energy policy targets for wind and solar. Of these, 11 grid plans were found to be based on energy scenarios that were significantly below existing policy targets. As policy ambitions increase and market trends soar, networks risk becoming ill-prepared to integrate anticipated wind and solar PV deployments.

Electricity grids must play an enabling role in the energy transition, transporting wind and solar power from source to end users. However, outdated plans can slow grid investment and development below required levels and create physical barriers to transition in return.

time lag

This misalignment between grid planning and policy objectives can be attributed to the time lag between national policy setting and plan development. Regulations in many countries require TSOs to comply with energy targets set out in national legislation. However, the process of translating political goals into law often takes about two years, and developing grid plans based on such goals takes another two years.

This means that the grid plan published in 2023 will be based on national policy objectives that will be legislated in 2021, which will likely be discussed at the political level in 2019 or 2020. It is thought that it was done. Network planning has therefore systematically lagged behind the growing ambitions of the EU and national countries. Moreover, the goals themselves often lag external conditions such as market outlook. As a result, grid planning is struggling to keep up with the rapidly evolving energy landscape.

Comparing TSO’s grid plans with market forecasts for solar deployment highlights these delays. Solar PV is consistently undervalued in grid planning, with 19 out of 23 countries potentially able to assess it using significantly lower 2030 capacity figures for grid planning. Across these plans, solar PV is undervalued by a total of 205GW, a staggering figure that is close to the total solar PV currently installed in the EU (263GW). This divergence from on-the-ground trends means grid congestion could worsen in the short term and more solar capacity could become stuck in grid connection queues unless corrective action is taken. means.

The gap widens across rapidly developing clean technologies, including wind power (though the gap is much smaller) and batteries. Although grid plans are not specifically designed with market trends in mind, they must be forward-looking enough to adapt to the evolving investment environment. This is especially important because clean energy technologies can be deployed much more quickly than building or upgrading power lines.

more positive

Europe needs to follow two courses of action to ensure that the grid does not become a barrier to the energy transition. First, deploying a variety of off-the-wire solutions can quickly and cost-effectively relieve system stress and increase grid capacity. One option is to increase load flexibility. That means reducing peak withdrawals and injections through storage, demand-side response, and financial products. For example, the Dutch TSO TenneT offers large companies and large consumers initiatives to reduce peak electricity usage in order to reduce pressure on the grid in conjunction with financial incentives.

Second, national regulatory frameworks need to be revised to allow grid operators to be more proactive. Electricity networks must be prepared to facilitate the adoption of renewable and clean technologies, but if grid planning remains rooted solely in the goals established by national legislation at the beginning of the planning cycle. This will not be achieved. Regulations should encourage grid operators to use energy scenarios that better reflect evolving policy discussions and market outlooks to plan their networks.

Some transmission operators, such as German and Finnish TSOs, have already adopted such an approach, implementing “targeted transmission” strategies looking beyond 2040. This is also the key to enabling the proactive grid investments that are attracting attention at EU level. It is clearly impossible to identify such investments if grid planning is confined within the confines of current or, worse, outdated policies.

We need to use the political momentum around grids to introduce solutions that address the critical and concrete problem of grid capacity that risks slowing down the energy transition.