The report “Electricity infrastructure development to support a competitive and sustainable energy system” by ACER concludes that focused development of distribution, transmission and cross-border capacities is essential for a secure, sustainable and competitive EU energy system.
Infrastructure is key to enabling the integration of renewable generation and electrification of energy demand, and to unlocking the benefits of market integration, including a more optimal operation of the EU power system (reducing congestion management costs, redispatching costs and other such costs) and sharing flexibility. These benefits should in principle outweigh the costs of making the required infrastructure investments. ACER finds that grid capacity development shows a 50% gap with identified cross-border grid capacity needs, not addressing needs at some locations. While project implementation timelines are already exceeding 10 years (for cross-border projects), the necessary grid investment for RES integration, electrification and handling the associated higher volatility of the electricity system risks being late.
Secondly, while the rate of investment in transmission and distribution grids doubles to achieve decarbonisation and unlock the benefits of market integration, grid costs for consumers are estimated to increase significantly compared to today (based on available information and complemented by ACER in case of missing data and information). Rising grid costs will become a main determinant of total costs of delivering decarbonised energy to EU consumers; keeping them under control is essential for affordability of energy for consumers and global competitiveness of the EU. Not investing also has costs (such as rising costs of congestion management, redispatching and flexibility schemes) that could even be higher than the rise of grid costs.
Access the report here
