Q&A: EU Grid Package – How Europe plans to bolster the energy transition’s backbone
Contents
- What is the European Grids Package?
- Why is the EU Grids Package important?
- Why is a European effort needed?
- What reforms did stakeholders call for?
- What happens next?
What is the European Grids Package?
The European Grids Package is an initiative by the European Commission to speed up the modernisation and expansion of the bloc’s energy grids. While it is set to focus heavily on electricity, it could also cover hydrogen and carbon networks. Given the EU's emphasis on securing industry competitiveness, the package is set to focus on lowering energy costs.
It has no legal weight, but is set to propose dedicated legislation, which heads of state and the European Parliament would have to discuss and agree on before adoption. The initiative is intended to speed up permitting and support the electrification of sectors currently relying on fossil fuels.
According to drafts leaked to the press, the European Commission will develop a centralised EU plan for cross-border electricity infrastructure and work with grid operators and companies to get projects off the ground. A legal draft proposal seen by Reuters showed the Commission will propose changing EU law to let governments exempt grid projects from requiring environmental impact assessments, citing long delays that can stall projects for years.
According to a Euractiv report, the Package will centre on eight energy projects that could be the key to unlocking lower power prices in Europe. "The projects in line for special treatment lie on the EU’s periphery: five electricity infrastructure developments, two proposed hydrogen pipelines, and one gas project have been identified as potential fixes for structural weaknesses in Europe’s power system that continue to drive up costs."
The Package is also another push to spur EU countries that are stalling on cross-border cable projects, such as France, the article said. "The second major priority is securing offshore wind development in the bloc’s territorial waters, alongside new cross-border interconnectors."
Background: Why does Europe need to strengthen its grids?
Europe aims to be climate neutral by 2050. To achieve this, it is progressively phasing out fossil fuels, and plans to power its economy largely with electricity. To deliver this electricity to an increasing number of electric vehicles, heat pumps, and industrial players, the bloc needs to expand and modernise its grids.
Power grids are for electricity what highways and country lanes are for vehicles – they are essential to transport power from where it is generated to where it is needed. The better the grids are, the more efficiently this can happen. Grids need significant upgrades as the number of electricity users increases, and as generation spreads to balconies, rooftops, fields and windy coasts, replacing large, central power plants.
Without upgrades and expansion, Europe risks worsening grid bottlenecks, while delays in grid development result in longer wait times for new connections, for example for new battery storage projects, offshore wind turbines, EV charging infrastructure and large heat pumps. All this slows down efforts to decarbonise the economy.
Moreover, electricity transmission and distribution face heightening threats, ranging from cyber-attacks as grids digitalise to extreme weather driven by climate change.
Why is the EU Grids Package important?
Thanks to Europe’s interconnected electricity market, electricity can flow across the continent: from Italy to Sweden and from Poland to Croatia. The system is designed so that – as long as there is enough transmission capacity – the electricity is produced where it is cheapest and shared across the continent.
However, Europe’s ageing grid infrastructure is increasingly plagued by bottlenecks, long connection queues for new renewables, batteries and end consumers, as well as increasing renewable curtailments (when there is an oversupply of wind or solar power and grids cannot cope, so their input is deliberately cut), which are expensive.
“Without massive upgrades, Europe will not be able to offer green and affordable electricity to enough homes and businesses, leaving the green industrial revolution stuck waiting for grid connections,” the European Investment Bank (EIB) wrote. “If Europe wants to maintain climate leadership and economic competitiveness, grid investment must be a top policy priority.”
Across Europe, the cost of cutting renewable electricity supply to keep the grids stable, and associated compensation, reached 8.9 billion euros in 2024, according to a report by analytics firm Aurora Energy Research. Moreover, 72 terawatt hours (TWh) of mainly renewable electricity was curtailed due to bottlenecks the same year – roughly equivalent to Austria’s annual electricity consumption.
Furthermore, a report commissioned by climate NGO Beyond Fossil Fuels estimated that across 16 European countries, renewable power projects with a total capacity of 1,700 gigawatts (GW) were stuck in connection queues – more than six times Germany’s entire net installed electricity generation capacity as of December 2025.
“These delays not only undermine climate progress, but also pose a broader economic threat,” wrote Carla Hobbs, policy fellow at the European Council on Foreign Relations (ECFR), a think tank. “Europe cannot claim leadership in clean technology if its electricity system cannot supply the power that new industries require.”
More than half of the transmission projects needed by 2030 are still awaiting permits, according to European transmission grid operator association ENTSO-E. Moreover, the European Court of Auditors found that planned investments to expand and modernise the EU's electricity grids by 2050 fall short of the necessary amounts of money required to support the bloc's move to climate neutrality.
Why is a European effort needed?
Europe could significantly reduce the costs of the infrastructure needed for the energy transition by joint and improved planning, according to a joint report by European think tanks including Germany’s Agora Energiewende, Poland’s Forum Energii, and Italy’s ECCO.
Their analysis found that a joint scenario for energy infrastructure needed by 2050 would require 505 GW less back-up capacity, 15 percent less onshore wind capacity, and 9 percent less hydrogen electrolyser capacity than a more nationally focused, sectoral approach. Independent top-down planning was crucial to realise the savings, which could amount to 750 billion euros, the researchers said.
Grid planning happens largely at the national level currently. “That does not always add up to the optimal solution at European level,” said a senior European Commission official. “We see a need for cross-European planning of the grid – that does not mean we want to replace the work done by TSOs at national level – but we want to add to that a European dimension.”
Climate NGO Clean Air Task Force (CATF) said that Europe’s grid challenges are caused by a lack of coordination, rather than ambition. Countries need to align deadlines, timelines, scenarios, and methodologies used to plan their grids, the NGO said.
In the EU’s key infrastructure plan for the future, the Ten-Year Network Development Plan (TYNDP), ENTSO-E concluded that additional cross-border power lines could reduce the cost of running electricity systems, and decrease renewable curtailment by 30 TWh per year by 2030. That is more than Slovakia’s entire electricity demand in 2023.
In 2024, Europe’s fragmented approach to electricity supply security cost the bloc almost 11 billion euros, according to the Agency for the Cooperation of Energy Regulators (ACER). The regulator similarly concluded that stronger cross-border coordination could cut these costs.
However, cost allocation for cross-border infrastructure remains politically sensitive. The EU could create better frameworks to address this, as interconnection projects – for example to better connect the Iberian Peninsula to the rest of Europe – have been plagued by delays.
“This is a typical problem with the interconnections,” the senior Commission official added. “It is rather obvious who will gain from it, but it is not always obvious that those who invest in it will benefit equally.”
Grids are essential for securing European competitiveness, energy security, and future climate neutrality. However, implementation will determine the package’s success, CATF warned. “While much attention focuses on Brussels, powerful levers for progress lie at national, regional, and local levels,” the NGO wrote. “The Grid Package is a test of Europe’s ability to coordinate on critical infrastructure for a shared energy future.”
What reforms did stakeholders call for?
A wide number of stakeholders came forward as the European Commission announced the package, calling for reforms aimed at:
- Streamlining planning: Including harmonising the time horizon and publication dates of national energy plans, which are used to build the EU grid development plan. Stakeholders also called for an EU scenario for 100 percent renewable electricity by 2040, including the necessary infrastructure.
- Faster permitting: Reduce grid connection queues by requiring national courts to prioritise grid-related litigation, or publishing guidelines that add criteria to connection requests currently handled on a “first-come, first-serve” basis, for example by automatically removing speculative projects that have not reached certain milestones after a set period of time. Civil society group CAN Europe called for a prioritisation system for grid connections, where renewable projects are given priority ahead of requests to connect data centres or inflexible industrial demand.
- Boosting cross-border energy flows: Provide direction of EU projects of strategic interest, define priority areas for energy highways, and create new cost allocation mechanisms that align investment needs with expected benefits, accounting for trickle-down effects. German utility association BDEW said the EU should place a stronger focus on hydrogen networks, especially the development of a core European H2 grid.
- Maximising existing capacity and smart grids: The Clean Air Task Force urged the EU to make better use of existing grids, saying that installing technologies such as dynamic line ratings and power flow controls – which enable operators to transmit more electricity if the weather conditions are favourable, for example – could significantly increase capacity and reduce the need for new construction.
- Increasing transparency: Creating a database across member states with standardised data such as grid connection requests and approval times, and enabling better coordination between the electricity and gas sectors. Give operators a clearer view of future demand – for example from new data centres or industrial clusters – while offering investors clarity on when capacity will be available.
- Enabling investments: Including recognising grids as strategic assets and including them in growing defence budgets. Guidance on anticipatory investments (where operators strategically oversize plans to meet potential higher future demand) is a first step.
- Secure supply chains: The EU is increasingly reliant on a small number of suppliers for key technologies such as transformers, and raw materials such as copper needed for cables, and electronics. It could improve supply chain security by expanding production capacity and boosting circular economy approaches.
- Boosting resilience: CAN Europe said European institutions should play a greater role in assessing the impact of the energy system on nature and biodiversity, and evaluating how infrastructure is affected by climate change.
You can find all feedback submitted during the Commission’s grid package public consultation here.
What happens next?
The European Commission plans to publish the European Grids Package on 10 December 2025.
Any legislative proposals would then be discussed in the European Parliament and by member state governments in the EU Council. Passing law reforms in the EU often takes months.
