The EU invests heavily in building a modern power grid.

First, aging transmission and distribution networks can no longer meet the growing demand for electricity. It is projected that by 2030, electricity consumption in the EU will increase by approximately 60% compared to current levels. Currently, about 40% of Europe’s distribution network is over 40 years old—less than 10 years away from the end of its original design life. Aging grids not only suffer declining efficiency in power transmission but also pose potential safety hazards. Second, rapid growth on both the supply and demand sides of renewable energy is straining the existing grid infrastructure. Millions of newly installed rooftop solar panels, heat pumps, and locally shared energy resources urgently require grid connection, while surging demand for electric vehicle (EV) charging and hydrogen production calls for more flexible and advanced grid systems. Additionally, cumbersome regulatory procedures have frustrated many power producers. The Plan notes that, in numerous countries, renewable energy generation projects face long delays before obtaining grid connection rights. Leonhard Birnbaum, CEO of German utility E.ON and head of the European Electricity Industry Association, once complained: “Even as Germany’s largest utility, E.ON’s grid connection applications have gone unanswered.” Moreover, rising intra-EU electricity trading places higher demands on cross-border grid interconnections among member states. A report by the prominent European think tank the Council on Foreign Relations points out that when domestic power generation in one member state falls short, it can import energy from others—thereby enhancing overall European energy resilience. For example, during the extreme summer heatwave of 2022, reduced nuclear output in France prompted increased electricity imports from the UK, Spain, Germany, and Belgium to meet domestic demand. The European Network of Transmission System Operators for Electricity (ENTSO-E), representing 39 European power companies, estimates that cross-border transmission infrastructure in the EU should double over the next seven years—adding 23 GW of capacity by 2025 and an additional 64 GW by 2030. To tackle these urgent challenges, the Plan identifies seven key priority areas: accelerating implementation of existing projects and development of new ones; strengthening long-term network planning; introducing forward-looking regulatory frameworks; enhancing grid intelligence; broadening financing channels; streamlining permitting and approval processes; and improving and reinforcing supply chains. The Plan proposes concrete action plans for each of these areas.

After 15 years of declining electricity demand, Europe has reached an inflection point—heralding a 'super-cycle' of grid investment.

The report forecasts that, under the base-case scenario, leading companies benefiting from the electrification trend could achieve a compound annual growth rate (CAGR) of 9% in earnings per share (EPS) between 2025 and 2030—and up to 11% under the 'scarcity scenario'—potentially driving valuation expansion across the entire sector. A historic inflection point in electricity demand European electricity consumption is emerging from a 15-year period of contraction. Citing Eurostat data, the report states that between 1990 and 2008, EU electricity demand grew steadily by around 30%, driven by robust economic growth and advancing electrification. Thereafter, however, a series of shocks—including the global financial crisis, the sovereign debt crisis, the COVID-19 pandemic, and the energy crisis—accelerated deindustrialization and energy-efficiency improvements across Europe, causing electricity demand to decline. Today, this trend is reversing. Goldman Sachs’ top-down analysis forecasts that European electricity demand will resume annual growth of 1.5%–2.0% by 2026. This shift is being driven by four main pillars: GDP growth coupled with slowing gains in energy efficiency; electrification; data center construction; and air-conditioning adoption. The report expects real GDP growth in the EU-27 to average 1.2–1.5% through 2028, then settle at around 1% thereafter. Regarding data centers, it forecasts 200 GW of pipeline transmission projects across the EU-27, with a 10-year conversion rate of 20%. On electrification, the report projects that by 2030, EVs will account for 30% of new car sales in the EU (below the EU’s 55% target); heat pump installations will reach half the EU’s 2030 target of 60 million units; and hydrogen development will achieve only 15% of the EU’s stated goals. Regarding air-conditioning penetration, Goldman Sachs notes that current penetration stands at roughly 20%, expected to rise to about 25% by 2030. A trillion-euro investment launches the 'super-cycle' Europe’s grid infrastructure is severely aged: according to Nexans, the average age of Europe’s grid is 45–50 years—the oldest in the world. After roughly two decades of underinvestment, transmission and distribution (T&D) investment began accelerating in 2020–2021, with particularly sharp growth observed in 2024—especially in the transmission segment, where investment has more than quadrupled over the past decade. Goldman Sachs estimates that grid investment must accelerate sharply due to equipment aging, the transition toward distributed generation, and the integration of new customers—including EVs, heating systems, industrial boilers, and data centers. T&D capital expenditures could double, reaching total investments of approximately €1.2–1.4 trillion over the next decade. This will propel grid-related businesses toward annual growth of 15% by the end of this century. Between 2024 and 2029, the regulatory asset base (RAB) is expected to grow at an annual rate of 15%, with transmission growth outpacing distribution. Regionally, countries such as Germany or the UK may see annual RAB growth rates of 15–20%. The report further highlights the nationwide blackout in Spain on April 28 as a stark reminder of the risks posed by underinvestment. Although multiple factors contributed to the outage, the government emphasized voltage fluctuations as one primary trigger: when grid frequency deviates from the nominal 50 Hz by more than ±0.15 Hz, system dispatch capability may collapse—leading to blackouts. Renewables’ rising share—but a more 'fragile' system

EU Grid Investment to Keep Rising Toward 2030, ACER Says

17 hours ago

ACER reports electricity grid investment across 15 EU countries will exceed 2025 levels by 2030, potentially raising consumer costs by 50-100% by 2050 due to delays and rising manufacturing prices.

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EU Grid Investment to Keep Rising Toward 2030, ACER Says

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