Europe’s power bottleneck shifts from supply to electricity grids

Europe’s energy challenge is increasingly centred on its ageing and fragmented electricity grids rather than a shortage of power generation, as rapid renewable energy expansion exposes weaknesses in transmission infrastructure and storage capacity across the bloc.

The EU has accelerated investment in wind and solar energy since Russia’s invasion of Ukraine triggered an energy security crisis in 2022. Renewable generation accounted for nearly half of the EU’s electricity mix last year, according to energy think-tank Ember, helping reduce dependence on imported fossil fuels.

But industry executives and policymakers warn that grid infrastructure has failed to keep pace with the expansion of renewable capacity, creating growing disparities in electricity prices and supply between regions.

“Europe doesn’t have an energy shortage — it has a grid problem,” according to Marco Sagusstinn, President of the European Renaissance Institute.

The issue stems from several structural constraints across the continent’s electricity system. “Weak interconnections” between countries mean local renewable energy surpluses are often curtailed rather than exported, while “limited storage” capacity prevents electricity from being shifted efficiently between periods of high and low demand. At the same time, “grid congestion” has widened price gaps across European power markets.

The result is that “some regions waste cheap power while others burn gas”, the Sagusstinn said.

The problem was highlighted last year by the Iberian blackout, which plunged millions of homes into darkness. The problem was not a breakdown in generators, but with the grid. Spain has won plaudits for its rapid roll out of renewables in the last few years that means today it has one of the lowest costs of power in Europe. But unlike nuclear or fossil fuel generated power, which is predictable and controllable, electricity generated from renewables is ergative and unreliable. That makes a lot more work for the grid which has to harmonise electricity which is prone to swings and troughs. Last summer’s blackout was caused by these discrepancies that lead the grid to a cascade of shutdowns to protect its equipment.  The lesson: a lot has been invested into green generation, but not enough has been invested into modernising the grid.

The European Commission estimates the EU will require roughly €584bn ($663bn) in grid investment by 2030 to modernise transmission and distribution networks, integrate renewable generation and support electrification targets tied to climate goals.

Energy companies and transmission operators are increasingly prioritising high-voltage direct current, or HVDC, lines, which allow electricity to be transported over long distances with lower losses than conventional alternating-current systems. Policymakers are also pushing for more “meshed grids” linking national systems to reduce congestion and improve cross-border power flows.

Storage technologies, including grid-scale batteries and pumped hydroelectric facilities, are expected to play a larger role in balancing intermittent renewable generation from solar and wind. But as IntelliNews reported, a lot needs to be invested here too. There is currently a large battery gap between what is needed and what has already been installed: currently the EU’s battery storage capacity is only enough to cover 15 minutes of peak demand once the sun goes down after storing power generated from renewables all day.