Every great energy revolution needs a infrastructure up to par. This is clear to them in Brussels and, therefore, the European Commission has prepared a policy and regulatory package aimed at renewing and strengthening electricity networks throughout the Union: the European Grids Package (“grids package”).
This package is much more than a technical reform: it aims to unlock the energy transition, electrify the economy, integrate present and future renewable generation, and prepare the system for the needs of the 21st century.
Electrical infrastructure is now a strategic assetkey to security, competitiveness and energy sovereignty.
According to a recent study, 11 Member States will fall below the 15% interconnection capacity target in 2030, with Spain and Portugal at the tail end.
But his success is not guaranteed: Now a complex legislative process begins that can last more than a year and that will require consensus, commitment and coordination, in addition to the challenge of an implementation that manages to translate the community guidelines into concrete, agile and well-planned investments.
Networks, to the limit
For years, experts have been warning that current networks – old, fragmented, with capacity limitations, overloading of nodes, permits with excessive processing times, poor cross-border connectivity – constitute the weak link in the energy transition.
Although the Union is committed to renewable generation, clean electricity often cannot flow where it is needed, or the grid is not prepared to absorb increases in demand.
This generates bottlenecks, congestion, cost overruns, low efficiency and, in the long run — as some organizations warn — slows down decarbonization and even puts security of supply at risk.
The Grids Package aims to correct these imbalances: a planned, robust, interconnected, flexible and well-managed network can reduce costs – in the medium and long term -, favor the electrification of industry, lower energy costs, stabilize the system in the face of tensions and promote productive investments in Europe.
More efficient and flexible networks create a more attractive environment for companies, R&D, storage, smart networks, digitalization…
In short: the Grids Package aims to provide Europe with a modern, agile, integrated and prepared “electric backbone” for an energy mix dominated by renewables, more electrification and greater interconnection.
To do this, we must first leave behind the “reactive” logic of building only when there is a specific demand, and move on to prospectively plan the development of the electrical system for the next 10–20 years.
They must reinforce the distribution and transportation networks and the flexibility and resilience of the system, integrating smart energies and promoting the storage.
It is also absolutely essential to improve connectivity between Member States, making long-demanded interconnections a reality to end the isolation of certain areas. According to a recent study, 11 Member States will fall below the 15% interconnection capacity target in 2030, with Spain and Portugal at the bottom.
And, finally, speed up the processing and provide regulatory certainty to attract capital – public and private – on a scale that allows massive electrification to be faced without problems.
Opportunities in Spain
For Spain, the European package represents a window of opportunity, but it also highlights the urgency of correcting structural deficits that currently weigh on our electricity system.
Spain already plans important investments in transportation and distribution networks until 2030: the PNIEC estimates that they will be necessary 53,000 million euroswhich means multiplying the investment rate in networks by three for the period 2021-2025.
Electrical infrastructure is now a strategic asset, key to security, competitiveness and energy sovereignty.
The Grids Package can facilitate this process to be accelerated, reduce deadlines and attract additional investment.
With the right network, our renewable resource will be able to better reach the market. Furthermore, industries intensive in energy, data centers, electric mobility or green hydrogen could grow with less risk of saturation. More efficient and flexible networks create a more attractive environment for companies, R&D, storage, smart networks, digitalization… In short, electrification and decarbonization.
But the process is not without challenges. Updating the network is not cheap, and requires a clear, robust plan, with national—and regional—regulation that takes advantage of funds and accelerates deadlines, and respects the territorial balance of the energy transition.
If the return on investments is not well remunerated and there is no clear profitability model for those who could finance the improvements, modernization can get stuck. Spain must guarantee an attractive regulatory framework for investors with adequate returns, stability, legal certainty and transparency.
The approval of the Grids Package of the European Commission can be a great opportunity. If we act with determination, vision and cohesion – political, business and territorial – we can turn this community impulse into a real lever to modernize our energy, strengthen the economy and accelerate decarbonization.
But if we miss this opportunity, we risk being left behind as Europe moves forward. Electricity—and those who manage it—must stop being invisible.
In an increasingly competitive global context, in which clean, cheap and stable energy is a strategic asset, modernizing the network is not an option: it is a necessity. May Spain respond with ambition.
*** Lola Sánchez is Head of Business Development Alpiq Energía Spain