ARKANSAS, January 27 (Future Headlines)- As the European Union (EU) charts an ambitious course toward achieving 1,000 GW of solar and wind capacity by 2030, the critical bottleneck of grid infrastructure has come into sharp focus. Recognizing the urgency of enhancing grid capacity to accommodate this unprecedented surge in renewable energy, the European Commission (EC) has identified 68 priority onshore grid projects. These projects, set to receive preferential treatment in terms of permits and funding through the EU’s Connecting Europe Facility, aim to alleviate the most pressing bottlenecks in the EU’s transmission networks. This strategic move is crucial to meeting the €584 billion ($637 billion) investment required for the power grid’s expansion.
The EU’s vision for a sustainable future hinges on a substantial increase in solar and wind capacity. With a target of installing 1,000 GW by 2030, compared to 400 GW in 2022, the EU acknowledges the need for a massive grid overhaul to support this transformative journey. Solar capacity, in particular, is expected to triple to 750 GW. To facilitate this monumental growth, the EU has outlined key grid projects, focusing on addressing grid bottlenecks and enhancing cross-border transmission capacities.
The 68 priority grid projects span multiple regions and address crucial transmission challenges. Noteworthy projects include north-south transmission lines in Western Europe, connecting regions like Beariz in northwest Spain to Fonte Fria in northern Portugal. Additionally, cross-border links across the Pyrenees mountain range between France and Spain and several transmission lines in Germany are part of the prioritized projects. These developments are poised to have a profound impact on regional grid stability, allowing for the efficient balancing of power flows between high solar and wind regions and the energy-demanding hubs of Europe.
Transmission upgrades in Spain and Portugal emerge as immediate catalysts for change, given the soaring solar growth in these regions. Spain, with a burgeoning pipeline of solar projects, has seen its grid connection requirements multiply. The approval of priority projects connecting Spain with France and Portugal is anticipated to streamline surplus solar and wind power evacuation, minimizing curtailment within Spain. Spain’s commitment to increasing its 2030 solar target from 39 GW to 76 GW further underscores the significance of these grid enhancements.
Beyond regional considerations, the EU’s grid projects extend to fostering international collaboration. Projects such as the planned Sicily-Tunisia and Greece-Israel connections open avenues for importing solar power produced outside Europe. These cross-border initiatives align with the EU’s commitment to facilitating global energy trade and collaboration in renewable energy ventures.
The EC outlines a substantial increase in cross-border transmission capacity, set to grow from the current 93 GW to 116 GW by 2025. Looking ahead to 2030, the EU aims for an additional 64 GW, marking a significant step towards robust cross-border connections. The EC estimates that these cross-border projects could lead to a reduction of EU generation costs by €9 billion annually, underscoring the economic benefits of enhanced transmission capacities.
A persistent challenge in the renewable energy landscape has been the prolonged approval processes for new solar and wind projects, leading to significant delays. To address this, the EU introduced faster permitting laws, requiring governments to allocate land for expedited approval of solar and wind projects. Germany, in particular, is swiftly integrating these rules into national laws to accelerate renewable energy development. The grid funding challenge looms large as the transition to solar and wind demands a more extensive and interconnected power network.
Recognizing the financial hurdles associated with grid infrastructure development, the EC aims to work closely with investors to devise tailored financing models. This collaborative approach seeks to identify innovative financial instruments, including bank lending, debt and equity market instruments, debt guarantees, and blended finance. Drawing parallels with the U.S. federal government’s commitment to investing in new power lines, the EU’s focus on de-risking construction costs aligns with global efforts to attract private investment into critical infrastructure.
A paradigm shift in grid planning is crucial for expediting solar and wind deployment. The EC is set to propose guiding principles that identify conditions under which anticipatory investments in grid projects should be granted. This forward-thinking approach aligns with California’s commitment to spend $7.3 billion on 45 new power transmission projects by 2030, supporting the construction of 17 GW of solar capacity, 8 GW of wind, and numerous battery storage projects.
While cross-border transmission corridors take center stage, the importance of local distribution grids cannot be overstated. The rise in solar and wind installations is placing increased pressure on distribution grid operators to expand and modernize their networks. Recognizing this, industry participants emphasize the need for substantial investment in local distribution grids. For instance, Enel plans to invest €18.6 billion in distribution grids between 2024 and 2026, constituting 53% of its total investment. Investors are identified as pivotal in overcoming obstacles to private financing for new grid infrastructure.
Distribution grids must not only expand but also undergo modernization to seamlessly adapt to the fluctuations in solar and wind generation. This includes reducing reliance on long transmission lines, which could be achieved by connecting solar farms to the distribution grid. Terna, the Italian grid operator, has already taken steps in this direction, introducing measures to incentivize solar farms to connect to the distribution grid. These initiatives aim to decrease connection costs and improve the overall cost-effectiveness of renewable energy projects.
Reporting by Kevin Wood; Editing by Sarah White