European power grids may need up to €425bn investment until 2030

14 Jan 2021175 Views

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A major study predicts that making European electricity grids fit for purpose in the future could create thousands of jobs.

A year ago, the EU Parliament approved the European Green Deal, which aims to spend at least €1trn overhauling Europe’s infrastructure and energy usage in order to become carbon neutral by 2050.

Now, a major new study has found that European distribution grids will need investments of between €375bn and €425bn until 2030 to make them fit for purpose on this journey.

The study was conducted by the industry bodies Eurelectric and E.DSO and was carried out by Monitor Deloitte on the basis of detailed data from 10 European countries: Denmark, France, Germany, Hungary, Ireland, Italy, Spain, Poland, Portugal and Sweden.

The study created a scenario that aligns with EU decarbonisation in 2050, stating that power grids are “a key enabler of the main decarbonisation drivers during the energy transition”.

According to the report, a significant part of the investment need is driven by the ongoing energy transition. This includes expansions and replacements related to integration of variable renewables such as solar and wind power.

However, the biggest investment driver is modernisation of the ageing infrastructure currently in place. The study found that around one-third of the EU’s grids are currently more than 40 years old. This is likely to be more than half of the EU’s grids by 2030.

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Based on Eurelectric data, the study also created a ‘power scenario’ for each of the 10 countries by 2030 with proposed investments in different areas.

In Ireland, for example, this scenario included the installation of 600,000 heat pumps in a mix of new and existing residential buildings, installation of 25,000 heat pumps in commercial buildings, and the electrification of transport with 0.9m EVs, 0.8m residential charging points and 60,000 non-residential charging points in place by 2030.

Thousands of quality jobs

Aside from the societal benefits of sustainability and bringing the EU closer to becoming carbon neutral, the report said that the large investment in upgrading power grids would stimulate local economies.

The study predicts that around 90pc of the investments could be captured by EU manufacturers and service providers and sustain between 440,000 and 620,000 quality jobs per year.

Kristian Ruby, secretary general of Eurelectric, said: “Grid investments are urgently needed for the energy transition and they hold a huge potential for job creation.

“With the right framework conditions, we can make the 2020s the decade of distribution grids. We call on policymakers to improve investment frameworks and tariff design, facilitate access to EU funds and accelerate authorisation and permit granting processes.”

Jenny is the Deputy Editor of Siliconrepublic.com

editorial@siliconrepublic.com