COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Grids, the missing link - An EU Action Plan for Grids
Date: 2023-11-28
Institutions: Directorate-General for Energy, European Commission
Subjects: EU action, EU energy policy, electrical energy, electricity supply, energy distribution, energy grid, energy transition, investment, renewable energy, trans-European network

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 28.11.2023  COM(2023) 757 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Grids, the missing link - An EU Action Plan for Grids  
 
 
1.  INTRODUCTION  

Interconnected  and  stable  electricity  grids  are  the  backbone  of  a  well-functioning  energy 
market. The European Union has one of the most extensive and resilient electricity networks 
in the world1, spanning over 11 million kilometres across its internal market and ensuring that 
high-quality electricity is delivered to its consumers every day.  

Thanks to the EU Regulation on trans-European energy infrastructure (‘TEN-E’), the EU has 
selected  more  than  100  electricity  Projects  of  Common  Interest  (‘PCIs’)  and  facilitated 
their permitting and construction, including by funding – notably through Connecting Europe 
Facility  (CEF)  funds.  This  helped  develop  a  physical  power  infrastructure  fit  for  a  genuine 
Single  Market  and  to  make  progress  towards  the  15%  electricity  interconnection  target  by 
20302.  During  the  energy  crisis,  well  interconnected  electricity  markets  brought  valuable 
benefits  in  terms  of  increased  security  of  supply,  access  to  competitively  priced  electricity 
from neighbouring countries and faster integration of renewable energies. With EU markets 
now fully coupled, completing the infrastructure network is the next step in maximising the 
benefits of affordable and clean power for consumers. 

Despite  these  advances,  Europe’s  power  networks  are  confronted  with  new  and  significant 
challenges.  They  will  need  to  serve  growing  demand  linked  to  clean  mobility,  heating  and 
cooling,  electrification  of  industry  and  the  kickstart  of  low-carbon  hydrogen  production. 
Electricity  consumption  is  expected  to  increase  by  around  60%  between  now  and  2030. 
Networks  will  also  need  to  integrate  a  large  share  of  variable  renewable  power.  Wind  and 
solar generation capacity must increase from 400 GW in 2022 to at least 1,000 GW by 2030, 
including a large build-up of offshore renewables up to 317 GW3, to be connected to shore. 
Therefore,  grids  need  to  adapt  to  a  more  decentralised,  digitalised  and  flexible  electricity 
system with millions of rooftop solar panels and local energy communities sharing resources. 

Planning  and  operation  of  Europe’s  electricity  transmission  and  distribution  networks  must 
also  correlate  with  the  planning  and  operation  of  the  new  hydrogen  infrastructure,  energy 
storage, charging infrastructure for e-mobility and CO2 infrastructure. 

As a result of these trends, Europe’s network must rapidly upgrade and expand. ENTSO-E’s 
Ten-Year Network Development Plan (TYNDP) shows that in the next seven years the cross-
border  transmission  infrastructure  should  double,  with  an  additional  23  GW  capacity  being 
incorporated by 2025 and further 64 GW by 20304.  

Beyond  cross-border  needs,  the  bulk  of  the  investment  will  be  within  borders,  both  at 
transmission  and  distribution  levels.  In  particular,  distribution  grids  are  bound  to  grow  and 
change  to  connect  large  amounts  of  decentralised  renewable  generation,  and  new  flexible 
demand (“loads”) such as heat pumps and charging stations for electric vehicles5. They gain 

1 https://ec.europa.eu/commission/presscorner/detail/en/speech_23_4377  
2 Governance Regulation (EU) 2018/1999 Article 2(11) 
3 In January 2023, Member States agreed regionally on combined ambitions leading to cumulative offshore goals of around 111 GW by 
2030 and 317 GW by 2050. This compares to around 971 MW of total onshore and offshore installed capacity in 2023 (Commission’s 
estimations of 971,452 MW based on ENTSO-E’s Transparency Platform country data) 
4 System needs study – Opportunities for a more efficient European power system in 2030 and 2040, TYNDP 2022, ENTSO-E, May 2023 
5 Commission Report on Promotion of e-mobility through buildings policy, February 2023 

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new roles, becoming facilitators of a range of  new solutions  that the system requires. They 
will  need  to  turn  into  smart  grids,  becoming  digital,  monitored  in  real-time,  remotely 
controllable  and  cybersecure,  with  research  and  innovation  playing  an  important  role. 
Moreover, around  40%  of Europe’s  distribution grids  are over 40  years  old and  need to be 
modernised.  Industry  estimates  around  EUR  375-425  billion  of  investment  in  distribution 
grids  is  necessary  by  20306.  Overall,  the  Commission  estimates  that  EUR  584  billion  in 
investments7 are necessary for the electricity grids this decade. This represents a significant 
part of the overall investment needed for the clean transition in the electricity sector.  

Already  now,  the  need  for  tackling  these  challenges  is  clear.  In  many  countries,  renewable 
generation projects face long waiting times to get connection rights. Waiting time for permits 
for grid reinforcements are between 4-10 years, and 8-10 years for high voltages. Connection 
backlogs  in  the  distribution  grid  are  escalating  rapidly,  with  several  thousand  new  requests 
per  month  for  a  single  medium-size  distribution  system  operator  (DSO).  When  there  is  no 
clarity or certainty about connection timelines and costs, new planned generation projects are 
stalled or abandoned. While EU legislation already covers regulation relevant for DSOs, with 
this Action Plan the Commission promotes, for the first time, action targeted to distribution 
networks.  Here,  significant  supply  bottlenecks  may  arise  when  businesses  and  households 
seek access to affordable clean energy with solutions ranging from integrating flexible energy 
assets such as zero-emission vehicles to demand response to investments in substations and 
others.  Furthermore,  everywhere  in  Europe,  interconnection  projects  suffer  from  cost 
overruns  due  to  inflation  and  rising  interest  rates,  while  also  facing  difficulties  in  getting 
equipment  like  cables  or  substations  on  time.  The  lack  of  skilled  workforce  adds  to  these 
problems. Waiting times for new products can reach 2032.  

This is not just a European issue. The need for grids to expand is recognised globally. The 
US  estimates  the  need  to  expand  their  electricity  transmission  systems  by  60%  by  2030. 
China’s State Grid Corporation has announced investment of CNY 1,020 bn (EUR 132 bn) in 
power  grids  in  2022-23.  The  International  Energy  Agency  assesses  the  need  for  over  80 
million  km  of  grids  around  the  world  by  2040  –  the  equivalent  of  today’s  entire  existing 
global grid – and estimates around 1,500 GW of advanced renewable projects waiting in grid 
connection queues8.  

The  EU  is  bringing  grids  to  the  centre  of  its  agenda.  The  revised  Renewable  Energy 
Directive 9 streamlines  the  permitting  of  networks  necessary  to  integrate  renewables.  The 
Regulation  and  Directive10 for  an  internal  market  for  electricity  contain  rules  relevant  for 
developing grids with regard to planning, network tariffs and the roles of ENTSO-E and the 
EU DSO Entity. The Net-Zero Industry Act proposal includes grid technologies in its scope. 
But the scale of the challenge is such that dedicated policy attention is required to ensure that 
grids become an enabler, not a bottleneck for the EU’s fast clean transition11. Moreover, the 
their 
need 

improve  electricity  grid  modernisation  and 

interconnectivity,  ensure 

to 

6 See Connecting the dots, conducted by Eurelectric in cooperation with E.DSO. Grids’ share of total energy supply costs has evolved from 
27% on average in the previous decade, to 37% this decade – see Commission’s Investment needs assessment SWD(2023) 68 final 
7 Implementing the REPower EU Action Plan, SWD(2022) 230 final 
8 Electricity Grids and Secure Energy Transitions, IEA, October 2023 
9 https://www.consilium.europa.eu/en/press/press-releases/2023/10/09/renewable-energy-council-adopts-new-rules/  
10 Regulation (EU) 2019/943 and Directive (EU) 2019/944 
11 https://www.ft.com/content/4c843612-1890-49bb-83eb-ddbe4495d6c9  

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maintenance  and  transform  them  to  enable  the  transition  to  renewable  energy  sources  is  a 
request of EU citizens12. For these reasons, the Commission has engaged with stakeholders to 
discuss the problems and possible actions.  

Building on this work, the Commission presents this Communication with a 14-point action 
plan  to  make  Europe’s  electricity  grids  stronger,  more  interconnected,  more  digitalised  and 
cyber-resilient. The measures listed focus on implementation of the agreed legal framework 
and should be delivered swiftly to make a difference in time for the 2030 objectives. 

2.  A EUROPEAN GRID ACTION PLAN 

The Commission has brought into focus the issues of grids in several fora and consultation 
processes with stakeholders, including the Energy Infrastructure Forum13 in Copenhagen and 
the PCI Days14 in Brussels and, more recently, the Smart Grid PCI Summits15 organised by 
PCI  promoters  with  the  Commission’s  support  in  Ljubljana  and  Bratislava.  Furthermore,  a 
High-Level  Forum  on  the  ‘Future  of  our  Grids’  was  organised  on  9  September  2023  by 
ENTSO-E 16 ,  with  the  patronage  of  the  Commission,  to  discuss  with  the  stakeholders 
representing the whole supply chain the outlook and challenges for grids development. 

Based  on  the  outcome  of  this  work,  the  Commission  has  identified  seven  horizontal 
challenges for accelerating the pace of grid development in Europe. These are 1) accelerating 
implementation  of  existing  PCIs  and  developing  new  projects;  2)  enhancing  long-term 
network planning; 3) introducing a supportive, future-proof regulatory framework; 4) making 
better  use  of  existing  grids  and  smartening  them;  5)  improving  access  to  financing;  6) 
ensuring faster and leaner permitting processes; and 7) strengthening supply chains. 

For each of these seven areas, the following sections of the Action Plan summarise the main 
drivers of the problem and identifies key tailor-made actions and recommendations on how to 
address them in the short to medium term. 

I. 

ACCELERATING THE IMPLEMENTATION OF PROJECTS OF COMMON 
INTEREST (PCIs) AND DEVELOPING NEW PROJECTS  

Since  2013,  the  TEN-E  framework  has  been  the  main  vehicle  to  reinforce  electricity 
interconnections  within  the  Single  Market.  It  helped  identify  cross-border  infrastructure 
needs, select Projects  of  Common  Interest (‘PCI’), secure political support and accelerate 
their implementation with streamlined permitting. The PCI status has also been instrumental 
in securing supportive financing conditions, as a widely recognised label that gives additional 
comfort  to  financing  institutions  of  the  high  value  of  a  project,  including  the  European 
Investment Bank17. 

Going forward, the TEN-E framework will gain further importance, in line with the expected 
growth in cross-border grid needs, to integrate and transport large amounts of new renewable 

12 Conclusions of the Conference on the Future of Europe, proposal 3 on climate change, energy and transport, measure 4 (p. 45) 
13 https://energy.ec.europa.eu/topics/infrastructure/energy-infrastructure-forum_en  
14 https://energy.ec.europa.eu/topics/infrastructure/projects-common-interest/pci-energy-days_en  
15 2023: https://www.pcisummit.eu/live-stream/; 2022: https://www.sincrogrid.eu/en/News/ArticleID/442/Recordings-of-the-Smart-Grid-
PCIs-Summit  
16 https://www.entsoe.eu/eugridforum/  
17 The European Investment Bank’s role in cross-border infrastructure projects, EIB, May 2023  

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electricity across  Europe  where it  is most  needed. PCIs will  also support Member  States in 
reaching the 15% electricity interconnection target. Better cross-border interconnections hold 
a  significant  potential  for  saving  costs  at  system  level:  cross-border  projects  can  decrease 
generation  costs  by  EUR  9  billion  annually  to  2040,  while  investments  needed  in  cross-
border capacity and storage amount to EUR 6 billion annually.  

The first Union list under the revised TEN-E adopted on 28 November 2023 helps create an 
infrastructure network fit for a decarbonised future by identifying 166 PCIs and Projects of 
Mutual Interest (PMIs)18. It includes  a  renewed  focus on electricity with 68 projects (12 of 
which  storage),  5  smart  grids  projects  and,  for  the  first  time,  a  new  category  on  offshore 
infrastructure with 12 projects. 

These  85  projects  address  the  most  pressing  bottlenecks  in  the  EU’s  TEN-E  networks. 
Around  half  of  them  are  planned  to  be  commissioned  between  2027-2030.  Their  timely 
completion  is  key  to  ensure  that  they  can  have  an  impact  within  this  decade.  Avoiding  the 
slippages  and  delays  that  hampered  PCI  completion  in  the  past  requires  an  extra  effort  of 
monitoring progress and swiftly removing bottlenecks and obstacles to implementation. 

Furthermore,  the  TEN-E’s  comprehensive  Union-wide  TYNDP  identifies  significant 
additional  system  needs  for  2040  and  beyond. These should be matched by new PCIs in 
the  subsequent  Union  lists  in  the  coming  years.  For  this  to  happen,  effort  is  needed  to 
accelerate the conception and development of a robust pipeline of new projects to be included 
in the updated PCI lists, every two years. 

While  the  majority  of  funding  needs  for  future  projects  will  have  to  be  covered  by  market 
finance,  there  is  growing  pressure  to  provide  additional  public  support  for  cross-border 
projects,  to  limit  impact  on  tariffs  and  in  consequence  energy  costs  for  final  consumers. 
However,  there  is  a  mismatch  between  the  growing,  identified  needs  and  the  EU  resources 
available.  The  budget  available  under  CEF-Energy  2021-27  was  reduced  in  the  final 
Regulation  compared  to  the  initial  Commission  proposal  and  was  meant  to  serve  a  limited 
number of project categories as set out in the former TEN-E Regulation. The TEN-E revision 
in  2022  expanded  its  scope  to  new  categories  for  offshore,  electrolysers,  hydrogen 
infrastructure,  energy  storage,  CO2  storage  and  smart  gas  grids,  while  the  budgetary 
allocation did not change. 

Growing  network  needs  and  a  limited  budget  spread  among  more  categories  reduces  the 
impact  of  the  instrument  and  creates  a  potential  funding  gap  for  cross-border  energy 
networks.  Moreover,  CEF-Energy  is  limited  to  PCIs  and  does  not  cover  local  DSO  needs. 
Other EU funding possibilities such as the Cohesion Fund, ERDF, RRF or the Modernisation 
Fund  are  available  for  electricity  grids  but  some  are  under-utilised.  The  Recovery  and 
Resilience Plans19 allocate around EUR 13 billion to grids, covering reforms and investments 
in  grid  infrastructure,  smart  energy  systems,  energy  storage  facilities  and  digitalisation  of 
distribution and transmission networks.  

18 PMIs will link EU Member States with neighbouring countries, contributing to the Union’s 2030 targets for energy and climate, and that 
may for example support the decarbonisation commitments of the Energy Community Contracting Parties 
19 Based on the Recovery Resilience Plans including the RePowerEU chapters of 21 Member States (HR, EE, EL, HU, IT, PL, RO, MT, AT, 
ES, SI, SK, CZ, PT, LT, LV, CY, DE, BE, BG, FI) 

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As insufficient investment in distribution grids and storage is already hampering citizens’ and 
businesses’  efforts,  a  new  approach  to  identify  and  support  local  grid  projects  appears 
necessary to prevent gaps in the future. 

Action 1: Commission, Member States and Transmission System Operators (TSOs) to 
strengthen support to PCI and PMI preparation, faster implementation and funding 

To accelerate the completion of PCIs on the Union list, the Commission, Member States and 
project promoters will prioritise the implementation of PCIs and PMIs already identified. 
Moreover, the development of new priority projects need to be promoted. 

-  Based on reinforced monitoring of project implementation, project promoters should 
update  Member  States  and  the  Commission  on  progress  and  identify  issues  to  be 
solved,  including  on  permitting.  For  that  purpose,  each  of  the  existing  High-Level 
Groups  should  closely  follow  priority  projects,  including  through  annual  ministerial 
meetings  to  ensure  political  steer  and  close  follow-up  of  implementation  progress 
with  the  involvement  of  partner  countries,  when  relevant.  The  High-Level  Groups 
will also support the identification of possible future priority projects. 

-  Looking forward, the Commission will also assess investment needs for future public 
funding for infrastructure projects both at transmission and distribution, covering also 
storage, hydrogen and CO2 infrastructure.  

II. 

IMPROVING LONG-TERM GRID PLANNING FOR A HIGHER SHARE OF 
RENEWABLES AND INCREASED ELECTRIFICATION 

A  rapidly  changing  energy  landscape  requires  dynamic  and  comprehensive  long-term 
planning  of  the  electricity  transmission  system  to  ensure  the  integration  of  offshore  and 
onshore assessments  as  well  as  across  sectors including hydrogen, recharging infrastructure 
for the transport sector, heating and cooling, carbon dioxide, electrified industrial processes, 
and gas.  

There  is  also  insufficient  long-term  visibility  of  network  needs,  in  particular  at  DSO  level, 
where needs are growing. In addition, a future-proof power grid requires increased focus on 
coordination  in  network  planning  and  data  exchange  between  TSOs,  DSOs,  generators, 
aggregators, 
and 
administrations  driving  heat  pump  rollout,  for  a  common  understanding  of  future  network 
needs. 

recharging  point  operators,  hydrogen 

infrastructure  operators 

Beyond  the  new  loads  needed  for  electromobility,  the  integration  of  smart  and 
bidirectional  recharging has a substantial impact on the electricity grids. This requires the 
timely  transposition  of  the  revised  RED,  the  implementation  of  the  recently  adopted 
regulation on the deployment of alternative fuels infrastructure (‘AFIR’) and the adoption of 
a new network code on demand-side flexibility20. The Commission, following consultation 

20 The revised RED includes requirements on Member States to ensure that power recharging points can support smart recharging 
functionalities and, where appropriate, bi-directional recharging, and should put in place measures to ensure that EVs and batteries can 
participate in non-discriminatory manner in flexibility services. AFIR sets mandatory deployment targets for publicly accessible recharging 
infrastructure and requires that, from early 2024, all new or renovated publicly accessible recharging points must be capable of smart 
recharging. Member States should assess by end-2024 the potential contribution of bidirectional charging to reducing user and system costs 
and increasing the renewable electricity share in the electricity system and, if necessary, take appropriate measures. The upcoming network 
code for demand-side flexibility, currently under drafting, will set the regulatory framework for participation of bidirectional charging in 
grid services together with other technologies to provide flexibility with the aim to address any remaining regulatory barriers. The 
Commission aims at an adoption of the network code in the course of 2025. 

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with all relevant stakeholders21, will enhance work with view to propose the necessary policy, 
regulatory and standardisation solutions for smart and bi-directional charging in Europe.  

Action  2:  ENTSO-E  to  enhance  top-down  planning  towards  2050  by  integrating  the 
identification of offshore and onshore system needs and further considering hydrogen  

Cross-border  transmission  infrastructure  development  builds  on  a  decade  of  experience  in 
pan-European network planning through the ten-year network development plans (TYNDP). 
The revised TEN-E Regulation adopted in 2022 went a step further by making the long-term 
direction set by Member States on regional offshore ambitions to 2050 the starting point for 
the offshore network planning exercise, closing the gap between policy expectations and grid 
development.  This  strategic  long-term  logic  currently  implemented  in  the  first  offshore 
network development plans (ONDPs) due on January 2024 should be expanded to the rest of 
the  European  network  with  the  objective  of  bringing  together  offshore  and  onshore 
network planning under a common framework through the next TYNDP process. 

In  that  regard,  the  Commission  will,  from  Q1  2024  after  publication  of  the  first  ONDPs, 
work  closely  with  ENTSO-E  in  the  further  development  of  the  TYNDP.  In  addition,  to 
ensure  integrated  energy  system  planning,  hydrogen  transport  should  be  better  reflected  to 
provide  sound  expectations  of  hydrogen  infrastructure  needs,  for  which  Member  States’ 
hydrogen strategies where these exist, including for the production of hydrogen offshore and 
its further transport to demand, should be considered. For that purpose, relevant stakeholders 
from  the  hydrogen  sector  should  be  more  closely  involved  in  the  preparation  of  future 
ONDPs. ENTSO-E should further strengthen the synergies between different energy carriers 
in  the  TYNDP,  ensuring  engagement  of  the  relevant  stakeholders  for  distribution,  storage, 
hydrogen, CO2,  and gas sectors in view of  progressively integrated energy system planning 
once these sectors reach adequate maturity. 

Lastly, at national level, National Regulatory Authorities (NRAs) should ensure that system 
operators  further  assess  the  flexibility  needs  of  their  energy  systems  when  planning 
transmission networks, including the potential of energy  storage22. This should be made in 
accordance with the upcoming revised Electricity Market Design legislative framework. 

TSOs  and  Member  States  should  ensure  that  sufficient  electricity  transmission  projects  are 
designed,  planned  for  and  developed  to  fulfil  the  identified  2030,  2040  and  2050 
infrastructure  needs  of  the  EU,  taking  into  account  the  National  Energy  and  Climate  Plans 
(NECPs).  Where  network  development  needs  are  identified  but  there  is  a  lack  of  concrete 
projects  to  deliver  on  those  needs,  Member  States  and  their  regulatory  authorities  should 
encourage TSOs to develop new project concepts. 

Action 3: EU DSO Entity to support DSO grid planning by mapping the existence and 
characteristics of distribution development plans 

Reliable, comprehensive, forward-looking and transparent distribution network development 
plans  (NDPs)  will  be  essential  to  incorporate  renewables  and  flexible  demand  and  reduce 
future  connection  request  delays.  DSOs 23  are  already  legally  mandated  by  the  Internal 

21 Such as the Sustainable Transport Forum and the Smart Energy Expert Group 
22 C/2023/1729 Commission Recommendation of 14 March 2023 on Energy Storage 
23 Small DSOs serving less than 100,000 customers or small isolated systems may be exempted 

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Electricity Market Directive to develop biennial 5-to-10-year NDPs and submit them to their 
NRAs  after  consultation  with  all  relevant  system  users.  Moreover,  the  EU  DSO  Entity  has 
legal tasks enshrined in the Internal Electricity Market Regulation to promote the planning of 
distribution  networks  in  coordination  with  the  planning  of  transmission  networks  and  to 
cooperate  with  ENTSO-E  and  adopt  best  practices  on  the  coordinated  planning  of 
transmission  and  distribution  systems,  including  data  exchange  between  operators  for 
network planning. Around 2,560 DSOs in the EU cover 10 million kilometres of distribution 
grids 24 ,  containing  a  wide  spectrum  of  company  sizes  and  disparities  in  national 
concentrations.  Small  DSOs  can  face  additional  challenges  due  to  limited  resources.  Over 
900 DSOs – small, medium and large – are members of the EU DSO Entity. 

This  action  complements  and  supports  initial  work  on  legal  requirements.  The  EU  DSO 
Entity  should,  by  mid-2024,  explore  case  studies  and  best  practices  and  publish 
recommendations to improve distribution network planning25 in close coordination with 
ENTSO-E  and  TSOs,  as  well  as  relevant  representatives  of  the  network  users,  such  as 
renewables, electromobility or heating and cooling, taking into account the uncertainties that 
most affect the activities of the DSOs, and the heterogenous size of the DSOs26. Transparent 
and  regular  exchanges  with  stakeholders  from  renewable,  electromobility,  heating  and 
cooling, consumer and civil society regional representatives in the preparation of distribution 
NDPs  will  be  essential.  For  example,  national,  municipal  and  private  firm  plans  on  EV 
recharging infrastructure, shore-side electricity supply in maritime ports, heat pump rollout or 
alternatively  district  heating  deployment  will  have  a  substantial  impact  on  the  need  to 
reinforce electricity distribution grids, which in turn enables opportunities for new flexibility 
markets, and need to be integrated in network planning, to ensure that the necessary network 
buildout is rapidly conducted.  

Adequate data sharing will also support DSOs in the planning of network needs to shorten 
grid connection times. For that purpose, network users should provide data on their respective 
power  capacities  and  project  locations  to  support  DSOs  in  understanding  new  power  flow 
patterns within their grids. Moreover, NRAs, in cooperation with ACER and CEER, should, 
by Q4 2024, provide guidance to DSOs on planning and promote consistency among plans27. 
The Commission, with the EU DSO Entity, will also reinforce from 2024 their support to the 
design and submission of PCI applications for smart grid projects. 

The  main  driver  for  making  investment  plan  decisions  is  therefore  having  comprehensive 
network  development  plans  in  place.  Complementing  these,  National  Energy  and  Climate 
Plans  can  be  effective  tools  in  supporting  the  development  of  distribution  networks,  in 
particular through reforms to be conducted by Member States. The Commission will include 
grid-related  actions in the iterative process with Member States on their National  Energy 
and Climate Plans. 

24 Commission estimation of 2,558 DSOs based on Eurelectric’s data: Distribution grids in Europe, Facts and Figures 2020, December 2020 
25 For example, measurement data from transformers, inverters and consumers at low voltage level can be used as input in load-flow 
calculations by which it is possible to calculate the influence of new PV connections on voltage and loads based on the individual reserves 
of the corresponding grid section, limiting grid development planning to what is actually needed (Distribution grids: The energy transition’s 
backbone, Geode, May 2023) 
26 See for example those investigated by the JRC’s Distribution System Operator Observatory 2022 (chapter 4.7), JRC, April 2023 
27 CEER Views on Electricity Distribution Network Development Plans, CEER, November 2021 

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III. 

INTRODUCING REGULATORY INCENTIVES FOR FORWARD-LOOKING 
GRID BUILD-OUT 

Among  the  main  drivers  impacting  the  level  and  effectiveness  of  investments  in  network 
development  is  the  regulatory  framework.  Grids  are  typically  regulated  assets  and 
investments  are  paid  for  by  all  consumers  through  network  tariffs.  Higher  energy  system 
development costs will therefore normally lead to an increase of network tariffs, and hence 
consumer prices,  even though final consumer prices need to  remain affordable.  In addition, 
limiting project development to those based on current system needs may increase the future 
system costs and hence costs for consumers. An agreement of concerned parties on the need 
for anticipatory investments is therefore important.  

Offshore  renewables  in  particular  will  bring  enormous  benefits  to  society,  likely  to  extend 
beyond the borders of the hosting Member States. This brings about complexities in agreeing 
on the appropriate sharing of costs, including for hybrid interconnectors. 

Providing  appropriate  regulatory  incentives  starts  by  establishing  a  supportive  regulatory 
framework  that  brings  investment  certainty.  This  calls  for  a  rapid  agreement  on  the 
Electricity  Market  Design  reform  with  its  provisions  recognising  the  importance  of 
anticipatory  investments,  a  transmission  access  guarantee  for  offshore  renewables  and 
accounting for both CAPEX and OPEX in network tariffs. 

However, such a major overhaul of tariff methodologies requires the right balance between, 
on  the  one  hand,  anticipating  future  infrastructure  needs,  accepting  a  higher  degree  of 
uncertainty that an infrastructure asset might not be fully utilised from its commissioning and 
allowing  for  the  early  recovery  of  the  related  costs  on  the  one  side,  and,  on  the  other, 
affordability for consumers who bear the costs through network tariffs. The socio-economic 
welfare  losses  of  delaying  the  network  upgrades  necessary  to  connect  renewables  and 
flexible  demand  will  frequently  outweigh  the  additional  initial  cost  of  anticipatory 
investments. Moreover, given the long lifespan of network assets, significant cost reductions 
can  occur  in  the  future  when  today’s  investments  are  done  already  considering  upcoming 
needs. 

Action 4: Commission to propose guiding principles identifying conditions under which 
anticipatory investments in grid projects should be granted 

The electricity market design reform proposal made by the Commission clearly indicates that 
anticipatory investments should be used for the relevant network projects. At the same time, 
its usage should remain proportional to the needs.  

Anticipatory investments can be  relevant for example for investing in future-proof offshore 
networks  that  allow  for  future  expansions  of  meshed  offshore  grids;  for  areas  with  high 
untapped onshore PV potential  such  as renewable  acceleration areas  set in accordance  with 
RED; for grid connections to ports for the provision on shore-side electricity supply, or for 
building smart grids that support EV infrastructure charging national plans or municipal plans 
for heat pump rollout.  

Complementing  the  work  on  anticipatory  investments  being  conducted  by  the  Copenhagen 
Forum28, the Commission, with support from ACER, ENTSO-E and EU DSO Entity and in 

28 https://energy.ec.europa.eu/system/files/2023-06/Conclusions%209th%20EIF_13%20June%20FINAL.pdf 

8 

 
 
consultation  with  relevant  stakeholders  on both  electricity supply and demand side,  will by 
Q1-2025  propose  guidance  identifying  conditions  under  which  the  approval  of 
anticipatory investments should normally be expected, taking into consideration different 
levels of development certainty of projects and ways to address the different levels, such as 
via the conditional provision of the anticipatory investments. 

Action  5:  Commission  to  issue  guidance  on  cross-border  cost  sharing  for  offshore 
projects 

Offshore  networks  will  be  composed  of  radial  and  hybrid  transmission  projects  evolving 
towards  a  future  meshed  grid.  The  connection  of  energy  islands  and  other  large  offshore 
projects will bring large benefits to society, likely to extend beyond the borders of the hosting 
countries. This poses challenges in agreeing on the appropriate sharing of costs, taking into 
account  consumer  and  producer  benefits  but  also  the  inherent  uncertainty  of  future 
investments  and  their  timing.  Hybrid  projects  that  interconnect  countries  while  connecting 
offshore  renewables  will  face  additional  particularities.  This  will  also  require  increasing 
transport infrastructure from coastal regions towards landlocked regions in Europe to unblock 
a larger number of onshore and offshore wind projects. 

Taking  into  consideration  the  offshore  network  development  needs,  Member  States  and 
regulatory authorities should engage in discussions on principles for collaboration – including 
on costs – already at the stage of identifying the network needs to accelerate the emergence 
of new cross-border projects. ENTSO-E should further develop effective modelling tools to 
better account for Member States’ needs for information relevant to kickstart such exchanges. 
Moreover, current approaches on cost allocation should consider new complexities, such as 
offshore  hybrid  projects.  The  Commission  will  address  these  challenges  in  a  guidance 
aiming  to  support  Member  States  and  NRAs in such activities by June  2024. Dedicated 
meetings  with  Member  States  at  political  and  technical  levels  will  steer  the  work  on  cost 
sharing . In addition, the Commission will organise a series of meetings with Member States 
to exchange ideas and support them in finding agreements on particular projects. 

IV. 

INCENTIVISING A BETTER USAGE OF THE GRIDS  

Queues on grid connections cause long delays in bringing renewables on stream. These are 
often the result of insufficient information for project promoters but also of the modalities of 
the  permitting  process.  Thus,  bringing  visibility  on  available  grid  capacities  helps  directing 
connection  requests  to  where  they  can  be  dealt  with  most  readily.  Many  system  operators 
have made grid hosting capacity maps available, but with divergent clarity and quality29. On 
the other hand, some administrations have pioneered practical ways to prioritise applications 
or disincentivise abusive demands, thus helping to reduce the backlog and cut waiting times.  

To  improve  the  usage  of  existing  grids,  project  promoters’  lack  of  awareness  of  the  rapid 
evolution  of  technologies  for  smart  and  efficient  grids  needs  to  be  addressed,  including 
technologies promoted by Horizon Europe, their degree of utilisation across Europe and the 
benefits already provided to other projects. 

Finally, there are insufficient incentives for the uptake of smart grid, network efficiency and 
innovative  technologies  due  to  prevailing  tariff  structures  with  a  focus  on  CAPEX. 

29 Power System of the Future: Keys to delivering capacity on the distribution grid, Eurelectric, September 2023  

9 

 
 
Insufficient compensation of OPEX as so far largely linked to human resource costs does not 
adequately reflect the rising costs of digitalisation, data processing or flexibility procurement.  

Action  6:  ENTSO-E  and  EU  DSO  Entity  to  agree  on  harmonised  definitions  for 
available grid hosting capacity for system operators and to establish a pan-EU overview 

System operators should provide transparent, understandable, granular and regularly updated 
information  on  grid  hosting  capacities  and  connection  request  volumes,  in  line  with  the 
Commission proposal for a revision of the Electricity Market Design. Regulatory authorities 
should establish frameworks for non-firm connection agreements, where relevant.  

From the publication of this Action Plan, ENTSO-E and the EU DSO Entity, in cooperation 
with the Commission and regulatory authorities, should work towards harmonised definitions 
for available grid hosting capacity. This should lead to a pan-EU overview of available grid 
hosting  capacities 30 for  new  network  users  to  connect,  together  with  information  on  the 
volumes of connection requests being processed. Such overview should consider the capacity 
mappings already done by TSOs and DSOs, when applicable. By mid-2025, ENTSO-E and 
the EU DSO Entity should establish a pan-EU overview that should give visibility to project 
developers  when  conceptualising  their  projects,  such  as  new  renewable  or  EV  recharging 
infrastructure projects  and  help  developers estimate the  risk  of connection request  approval 
delays  and,  thus,  have  a  clearer  forecast  about  when  projects  can  start  receiving  revenues. 
This will benefit  new  projects for renewables and flexible demand such  as storage  or EVs. 
Some system operators already provide this visibility today locally. Furthermore, ENTSO-E 
and  the  EU  DSO  Entity  should  support  system  operators  in  digitalising  and  streamlining 
procedures  for  grid  connection  requests,  for  example  by  issuing  guidance  and 
recommendations, at the latest by mid-2025. 

Such  an  overview  can  further  support  NRAs  in  understanding  where  in  the  network 
flexible  (non-firm)  connections  could  be  beneficial  to  the  system  until  the  necessary  grid 
buildout  takes  place.  Where  network  development  is  the  structural  solution  of  the  capacity 
problem,  non-firm  connection  frameworks  should  be  designed  so  that  system  operators  do 
not  delay  grid  buildout.  In  other  cases,  where  grid  development  may  not  be  an  economic 
solution, non-firm connections could be considered as a long-term solution31.  

NRAs should also provide a clear framework to disincentivise the application for connection 
request  where  the  request  is  not  substantiated  by  a  solid  project  and  not  sufficiently 
committed  by  a  developer,  or  the  requests  of  over-capacities  beyond  what  needed  for  the 
project, to avoid that the reservation of connection capacities is given to projects less likely to 
materialise  or  whose  main  business  plan  is  to  sell  the  right  for  connection,  where  this  is 
allowed.  For  instance,  generation  projects  that  are  financially  bound  or  pay  for  the  grid 
connection  costs  when  requesting  connection  are  less  likely  not  to  proceed  with  their 
projects. 

30 See examples at distribution level in Spain and in Czech Republic 
31 CEER Paper on Alternative Connection Agreements, CEER, May 2023 

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Action  7:  ENTSO-E  and  EU  DSO  Entity  to  promote  uptake  of  smart  grid,  network 
efficiency and innovative technologies  

Commercial technologies that can greatly improve the functioning of the electricity grids are 
readily available but not sufficiently used32. Yet, such technologies can lead to lower costs to 
consumers  by  reducing  network  losses33.  Being  aware  of  the  existing  pipeline  of  projects 
where  such  technologies  have  already  been  demonstrated,  and  the  quantified  benefits  they 
have  brought,  can  provide  clear  arguments  to  project  promoters  still  considering  their  use. 
Therefore, there should be an increase of visibility for technological assets available for rapid 
deployment  as  well  as  innovative  solutions  for  smart  grids  and  better  network  efficiency, 
such  as  dynamic  line  rating  (DLR),  high-temperature  superconductor  (HTS)  cables,  static 
synchronous  compensators  (STATCOM),  voltage  source  converters  (VSC)  in  HVDC 
systems, HVDC breakers or phase shifting transformers (PST)34. 

ENTSO-E and EU DSO Entity should jointly update  the  Technopedia35, giving clarity on 
such  elements  and  ensuring  that  the  technologies  being  utilised  in  pilots  across  Europe 
relevant  for  smart  electricity  grid  projects  and  for  increasing  network  efficiency  are 
covered,  including  those  technologies  developed  under  Horizon  Europe  or  Horizon2020 
programmes. Technopedia should inform of use cases and benefits and be updated by end-
2024  and  at  least  annually,  so  that  promoters  can  appropriately  consider  them  in  their 
respective projects’ conceptualisation, and regulatory authorities can encourage their usage to 
promoters.  Updates  should  be  disseminated  in  future  Smart  Electricity  Grid  Summits 
organised with support from the Commission and the EU DSO Entity. 

To  further  promote  smart  grids,  network  efficiency  and  innovative  technologies,  the 
Commission  will  further  facilitate  with  the  upcoming  network  codes  regarding  the 
participation of decentralised energy resources to the markets.  

Action 8: ACER, in its next tariff report, to recommend best practices in relation to the 
promotion  of  smart  grids  and  network  efficiency  technologies  through  tariff  design, 
focusing on the consideration of OPEX in addition to CAPEX and benefit sharing  

Grids  are  typically  financed  via  network  tariffs,  complemented  with  congestion  income  for 
cross-border transmission projects. Transmission and distribution network tariffs should be 
regularly updated, with an efficient consideration of both OPEX and CAPEX, to account for 
the  changing  energy  system  towards  decarbonisation  and  an  increasingly  active  role  of 
DSOs. There is a need to acknowledge an increase of operational costs in the deployment 
and  operation  of  our  networks,  including  for  physical  and  cybersecurity.  Efficiency 
requirements stimulate the network operators to reduce costs and to work more efficiently36. 
NRAs  should  regularly  review  their  network  tariff  setting  or  methodologies,  including 
how  they  set  long-term  incentives,  support  peak  demand  shifting  and  incentivise  the 
deployment  of  technologies  that  increase  the  efficiency  and  operability  of  the  grids  (see 
previous  action),  such  as  through  output-  or  performance-based  remuneration  schemes. 
Network tariffs therefore  need to evolve  with the energy  system. Innovative approaches 

32 The benefits of innovative grid technologies, CurrENT, December 2021  
33 For example, given the higher voltage levels (and lower current), network losses are lower in relative terms in transmission grids than in 
distribution: around 0.5%-3% in transmission vs 2-14% in distribution. Report on Power Losses, CEER, March 2020 
34 Clean Energy Technology Observatory: Smart grids in the European Union, Joint Research Centre, October 2023 
35 https://entsoe.eu/Technopedia/  
36 Report on regulatory frameworks for European energy networks 2022, CEER, January 2023 

11 

 
 
such  as  benefit  sharing 37 can  contribute  to  energy  system  resilience  at  affordable  prices. 
Some Member States are introducing new practices, for example the Italian NRA38 is moving 
from input-based regulation to premiums to increase transfer capacity and CAPEX-efficiency 
incentives and  considering both OPEX  and CAPEX in 2024. ACER  should further support 
NRAs through recommending best practices in the next tariff report39 due January 2025, 
based  on  thorough  consultations  with  all  relevant  stakeholders,  and  subsequently  support 
NRAs in their implementation. 

As  established  by  the  Electricity  Regulation,  tariff  methodologies  shall  provide  appropriate 
incentives,  including  in  the  long  run,  ensuring  cost  reflectiveness,  which  is  enhanced  by  a 
careful consideration on the distribution of costs between producers and consumers. This is 
especially relevant considering that network development is increasingly driven by the need 
to connect areas where  renewables can be generated, a trend that should  be reflected in the 
appropriate level of injection and connection charges to cover related costs.  

V. 

IMPROVING ACCESS TO FINANCE  

Funding the necessary grid reinforcements and adaptations will require mobilisation of vast 
resources,  close  to  half  a  trillion,  in  a  context  where  public  resources  are  constrained  and 
inflation and rising interest rates are hitting projects. There are also emerging issues with the 
credit  rating  and  access  to  capital  for  project  promoters.  Grid  operators,  both  at  the 
transmission and distribution levels, are faced with an unprecedented increase in the volume 
of capital expenditure. For example, the size and rapid extension of a company’s investment 
programme may affect its credit rating, with negative consequences in access to finance. All 
of  these  require  a  new  effort  to  identify  tailor-made  financing  products  and  instruments  to 
support grid investments. 

Action 9: Commission to identify tailored financing models and strengthen dialogue to 
address obstacles to private financing 

Building on the Investors  Dialogue  on  Energy, the Commission will launch by the end of 
2023  a  reinforced  process  with  investors  (including  pension  funds),  credit  agencies, 
financial institutions, regulatory authorities and system operators to identify and address 
obstacles  to  financing  including  through  bank  loans,  market-based  instruments  (debt  and 
equity), guarantees and blended finance. Considering the specificities of the business models 
of  system  operators,  the  Commission,  with  the  support  of  relevant  stakeholders,  should 
explore  financing  instruments  to  provide  the  most  appropriate  solutions  to  match  the 
investment needs,  including  guarantees or similar funding mechanisms that  catalyse private 
financing. 

The  Commission  and  the  EIB  will  explore  further  the  need  for  financing  tools  and 
instruments to support grid investments at large, in the context of InvestEU.  

The Commission will ensure the coordination and synergies between this work and relevant 
work on access to finance as  set out in the Wind  Power  Action  Plan (action 8) and other 
renewable technologies to ensure a coherent integration of the future electricity system. 

37 Benefit-based incentive regulation to promote efficiency and innovation in addressing system needs, Florence School of Regulation, June 
2023 
38 https://energy.ec.europa.eu/events/9th-energy-infrastructure-forum-2023-06-12_en  
39 https://www.acer.europa.eu/Publications/ACER_electricity_network_tariff_report.pdf  

12 

 
 
Action  10:  Commission  to  increase  visibility  on  opportunities  from  EU  funding 
programmes for smart grids and modernisation of distribution grids  

Distribution grids are eligible for  financing under different EU funding instruments. Major 
funding  sources  are  the  regional  (ERDF),  cohesion  funds  (CF)  and  the  Recovery  and 
Resilience  Facility  (RRF)  including  its  REPowerEU  component.  ERDF  and  CF  may  co-
finance  the  development  of  smart  energy  systems,  grids  and  storage  projects.  In  their 
operational  programmes  for  the  period  2021-27,  Member  States  have  so  far  in  total  only 
allocated EUR 4.7 billion leading to investments of EUR 6 billion. Allocated amounts vary 
strongly  among  Member  States  also  since  some  Member  States  have  used  RRF  to  support 
such  investments.  The  Modernisation  Fund,  financed  via  part  of  the  revenues  from  the  EU 
ETS40, and the RRF can contribute to part of the investment needs. 

If  modifying  their  operational  programmes  for  the  regional  and  cohesion  funds,  Member 
States  with  a  high  need  for  distribution  grid  modernisation  and  local  smart  grid 
deployment should consider available options to increase allocations for this sector. The 
Commission will kick-start from Q1 2024 a process to work with Member States on funding 
opportunities  for  distribution  grids,  including  via  a  dedicated  high-level  meeting.  The 
Commission  will  also  put  forward  dedicated  technical  assistance  within  the  Technical 
Support  Instrument  to  help  enterprises  preparing  their  funding  applications  and  will 
collaborate  with  the  EU  DSO  Entity  to  raise  awareness  on  this  action  among  its  DSO 
members. 

VI. 

ACCELERATING DEPLOYMENT THROUGH FASTER PERMITTING AND 
PUBLIC ENGAGEMENT 

Infrastructure  projects  encounter  complex  and  lengthy  permitting  procedures  as  they  cover 
long  distances  crossing  very  often  several  jurisdictions.  This  entails  the  navigation  through 
different  permitting  procedures  in  several  languages  with  various  set-ups  and  deadlines. 
Some  of  these  problems  are  linked  to  constraints  in  staffing  and  digitalisation  of  the 
competent  authorities.  The  process  of  obtaining  the  necessary  environmental  permitting  for 
cross-border projects is sometimes difficult, especially for projects crossing protected natural 
areas or certain species’ habitats, in particular where knowledge about the protected habitats 
and species present is not complete. Moreover, the implementation of infrastructure projects 
frequently faces significant public concerns that, in the worst cases, may lead to lengthy court 
procedures.  Minimum  legislative  requirements  are  often  not  sufficient  in  addressing  the 
concerns  of  local  communities  impacted  by  the  construction  of  a  projects  in  their  vicinity, 
and ambition for public engagement should go beyond what is strictly required. 

The TEN-E Regulation and most lately the emergency Council Regulation (EU) 2022/2577 
offer solutions to these issues, however they are not yet sufficiently taken up.  

40 The Modernisation Fund uses a part of the EU ETS revenues to support investments in the modernisation of energy networks in the 13 
lower-income EU Member States. Over the period 2021-20230, EUR 57 billion will be available under the MF, assuming an EU ETS price 
of EUR 75/tCO₂. 

13 

 
 
Action  11:  Commission  to  support  permitting  acceleration  providing  guidance  and 
technical support on how to implement existing legislative tools and Member States to 
implement acceleration measures  

Member  States  may  make  use  of  the  voluntary  provisions  under  the  emergency  Council 
Regulation41 (Article  6)  and  are  encouraged  to  rapidly  transpose  the  revised  Renewable 
Energy  Directive  (RED)  in  view  of  accelerating  the  development  of  transmission  and 
distribution  grid  networks  necessary  to  integrate  renewables  into  the  system.  Network 
development is increasingly driven by the need to integrate large amounts of renewables into 
the  system,  and  thus  there  might  be  important  potential  for  Member  States  to  designate 
dedicated  infrastructure  areas  in  compliance  with  the  Regulation  and  the  Directive 
respectively. 

The  Platform  of  the  National  Competent  Authorities  in  charge  of  permitting  set  up  in 
2022  has  proven  to  be  a  useful  forum  to  exchange  best  practices  and  provide  clarifications 
and guiding support. The work of the Platform will be intensified. In particular, a dedicated 
ministerial  meeting  will  be  organised  to  ensure  political  steer  to  address  identified 
permitting  issues.  For  further  support,  the  Commission  will  conduct  a  study  in  2024 
assessing  the  implementation  of  the  permitting  provisions  of  TEN-E  Regulation.  This  will 
especially enable the identification and dissemination of best  practices. On the basis of the 
findings  of  the  study,  Member  States  should  identify  specific  measures  to  be  taken  to 
accelerate  their  permitting  regimes.  The  Commission  will  support  this  assessment  and  its 
implementation  through  the  Platform  of  National  Competent  Authorities  in  charge  of 
permitting. 

The Commission will work with relevant ministries and permitting authorities, including in 
the  context  of  the  Covenant  of  Mayors,  to  disseminate  and  support  application  of  the 
provisions  of  the  RED  III  and  emergency  Council  Regulation  and  the  revised  RED  as 
regards distribution  grids.  Moreover,  the Platform of National Competent Authorities  will 
further  exchange  on  the  permitting  particularities  of  smart  electricity  grids  with  the  aim  to 
streamline the respective procedures. 

At  the  latest  by  mid-2025,  in  view  of  the  permitting  obstacles  encountered  by  energy 
infrastructure  projects,  the  Commission  will  provide  guidance  on  the  designation  of 
dedicated infrastructure areas for grid projects necessary to integrate renewables as provided 
by  the  revised  RED.  The  Commission  will  update  by  Q4  2024,  if  necessary,  the  existing 
guidance  on  streamlining  environmental  impact  assessments  for  PCIs42 and  PMIs  and  the 
guidance  on  energy  transmission  infrastructure  and  EU  nature  legislation43 as  necessary  to 
adapt them to the revised legislative frameworks of TEN-E and RED and their streamlining 
permitting provisions. 

Lastly, from 2024 the Commission will support the digitalisation of permitting procedures for 
grid  projects  through  the  Technical  Support  Instrument  (TSI).  The  TSI  Regulation 44 
foresees that Member States can receive, through either stand-alone or multi-country projects, 
technical expertise for accelerating permitting. Member States are encouraged to make use of 

41 Council Regulation (EU) 2022/2577 of 22 December 2022 laying down a framework to accelerate the deployment of renewable energy, 
OJ L 335, 29.12.2022, p. 36–44 
42 Streamlining environmental assessment procedures for energy infrastructure Projects of Common Interest (PCIs), European Commission, 

2013  

43 Guidance on energy transmission infrastructure and EU nature legislation, European Commission, 2018 
44 Regulation (EU) 2021/240 establishing a Technical Support Instrument, OJ L 57, 18.2.2021, p. 1–16 

14 

 
 
the TSI provided by the Commission to upgrade their systems for dealing with permitting and 
connection  procedure  applications,  for  example  through  digitalisation.  In  addition,  as 
announced  in  the  European  Wind  Power  Action  Plan 45 ,  by  the  end  of  the  year  the 
Commission will launch a dedicated online tool to support Member States, among others, 
by providing for answers to frequently asked practical questions from Member States related 
to the implementation of the revised permitting provisions. 

Action  12:  Commission  to  launch  a  Pact  for  Engagement  for  early,  regular  and 
meaningful stakeholder engagement and regulatory support 

Quantifying  and  monetising  the  successful  avoidance  of  conflicts  and  delays  can  be 
challenging  in  a  complex  regulatory  framework  for  building  infrastructure  that  crosses 
several  jurisdictions  and  competences.  Whilst  best  practices  are  promoted  and  shared 
amongst project promoters, there is a need to reinforce the engagement framework towards 
stakeholders into  a  regular and collective effort to mitigate the impact  on communities and 
nature, while redistributing benefits to communities and enhancing nature protection.  

To  address  potential  public  opposition  and  ensure  the  highest  standard  in  stakeholder 
engagement, the Commission will launch, with the occasion of the 2023 edition of the PCI 
Energy Days, a Pact for Engagement with Member States, NRAs, system operators and civil 
society for early, regular and meaningful stakeholder engagement and the need for adequate 
regulatory support (see Annex II). 

VII.  STRENTGHENING GRID SUPPLY CHAINS  

The  EU  industry  is  global  leader  in  the  manufacturing  of  components  for  power  systems, 
such  as  on  HVDC  cables  and  substations,  fundamental  elements  to  deliver  on  the  EU’s 
offshore ambitions. 

Nonetheless, grid project promoters flag long and growing lead times for procuring specific 
grid components, sometimes of several years even for the most urgent Projects of Common 
Interest,  including  because  of  tight  supply  of  some  components  or  increasing  raw  material 
prices. At the same time, EU manufacturers are faced with barriers to benefit from economies 
of scale due to divergencies in product specificities.The strong growth in global demand for 
electricity  grid  technologies  could  stretch  lead  times  even  longer.  Therefore,  the  EU 
manufacturing  capacity  is  set  to  increase  significantly,  while  EU’s  partnership  will  further 
strengthen the value chains. 

Increasing global competition in the market for HVDC and HVAC cables and systems, which 
are  still  supplied  mainly  domestically  in  Europe,  is  very  positive  provided  a  level  playing 
field is in place. To foster energy system resilience, careful attention is needed to ensure such 
a level playing field remains in place with no room for unfair trade practices.  

Moreover,  it  must  be  ensured  that  security  risks  do  not  emerge.  Relying  on  third  country 
suppliers, in particular from countries not aligned with EU values and positions, to meet EU 
critical  energy  infrastructure  needs  can  however  present  security  risks46 –  both  directly  in 

45 COM(2023) 669 final European Wind Power Action Plan 
46 Directive (EU) 2022/2557 on the resilience of critical entities  

15 

 
 
terms  of  cybersecurity47 as  well  as  relating  to  the  potential  weaponisation  of  such  supply 
chain dependencies. 

Reliance  on  high-risk  third  country  suppliers  for  critical  components  can  create  cyber-
vulnerabilities  to  the  grid,  including  interconnectors  to  third  countries.  The  Network  and 
Information Systems (NIS 2) Directive48 requires entities in the energy sector to take security 
measures  in  relation  to  their  supply  chains  as  part  of  the  cybersecurity  risk-management 
measures.  The  upcoming  Cyber  Resilience  Act,  currently  under  negotiation  by  the  co-
legislators,  will  considerably  enhance  supply  chain  security  by  requiring  cybersecurity-by-
design for hardware and software products with digital features accessing the EU market, as 
well as obligations for manufacturers to ensure compliance with cybersecurity requirements 
throughout the lifecycle of the product. 

Furthermore, EU grid operators face challenges in getting sufficient access to raw materials, 
such  as  copper  or  steel.  Given  the  ambitious  deployment  objectives,  boosting  domestic 
production  capacities  and  diversification  of  supplies  of  raw  materials  and  key  components 
will  have  to  be  pursued  domestically  and  via  EU  agreements  or  partnerships  with  reliable 
third countries, respectively. The Critical Raw Materials Act will help to ensure that Europe 
meets such objectives, including through domestic production and strategic partnerships. The 
Commission is working on securing access to critical and strategic raw materials. Free trade 
and other bilateral agreements, covering energy,  raw materials and clean technology supply 
chains, and the Global Gateway strategy, will also contribute to this end.  

It  should  also  be  highlighted  that  electricity  interconnection  projects  with  third  countries, 
such  as  PMIs,  that  aim  at  exporting  significant  amounts  of  renewable  electricity  to  the  EU 
should not create new dependencies in terms of security of energy supply. 

Finally, the lack of skilled workers affects the increasing staffing needs of transmission and 
distribution system operators, HVDC cable manufacturers and other power system suppliers. 
This  includes  the  need  to  acquire  further  advanced  digital  and  technological  skills,  such  as 
automation,  controlling,  big  data  and  advanced  analytics,  to  detect  and  control  network 
challenges as well as develop the necessary technologies49. 

The above important needs for resilient and effective grid manufacturing supply chains have 
been addressed in the proposal for a Net-Zero Industry Act (grid technologies are proposed 
among the strategic net-zero technologies and Net-Zero Academies address skill challenges) 
and the European Wind Power Action Plan (increasing grid demand certainty by establishing 
an  EU  digital  platform  for  wind  power  auction  planning  and  national  pledges).  A  swift 
adoption and implementation of  the Net-Zero Industry  Act will allow supporting a resilient 
grid  supply  chain  notably  through  faster  permitting  for  new  manufacturing  capacity, 
increased skilled workforce and through appropriately designed public tenders and auctions. 

Other Commission enforcement tools are available to EU industry, to promote a level playing 
field,  counter  unfair  trade  practices 50,  or  to  remedy  asymmetries  between  EU  and  third 
countries  in  market  openness  in  the  public  procurement  sectors  (International  Procurement 
Instrument). Furthermore, with regard to risks relating to security and public order, the EU’s 

47 Commission Recommendation (EU) 2019/553 of 3 April 2019 on cybersecurity in the energy sector 
48 Directive (EU) 2022/2555 on measures for a high common level of cybersecurity across the Union 
49 Skills needs developments, vocational education and training systems in the changing electricity sector, by industriAll European Trade 
Union, the European Public Service Union (EPSU) and Eurelectric, with support from the EU 
50 See the recent opening of a trade investigation on optical fiber cables, in OJ C2023/891 Optical fibre cables notice of initiation 

16 

 
 
Foreign Direct Investment (FDI) Screening Regulation51 allows for the assessment of security 
risks of FDIs. Moreover, EU trade agreements are geared to promote renewable investments, 
including through access to energy grids, with a view to diversify sourcing and enable market 
access in third countries while preserving security of supply. 

Additional and complementary targeted action in this present Action Plan will support further 
improvements in the grids supply chains. Efforts in aligning product designs across the EU 
would enable suppliers to focus on delivering quantity, instead of utilising time and human 
resources  in  tailored  design  and  manufacturing.  Such  alignments  would  serve  not  only  to 
increase access of suppliers to the internal market, but also increase competition, lower costs 
and increase manufacturing output with the same manufacturing capacities. 

Action 13:  ENTSO-E  and EU DSO Entity to  collaborate  with  technology providers to 
develop  common  technology  specifications  and  improve  visibility  of  grid  project 
pipelines, to facilitate investments in manufacturing capacity and secure supply chains 

Standards, addressing the whole value chain of electricity grids and equipment, are critical to 
ensuring safety and security of the electrical installations, facilitating supply chain security, 
interoperability,  enabling  investments  in  the  electricity  network,  saving  costs  and  hence 
speeding up deployment and modernisation.  

As  first  and  imminent  need,  current  tender  specifications  by  TSOs  towards  grid 
manufacturers  are  frequently  very  tailor-made,  meaning  that  efforts  and  resources  of  the 
supply  chain  need  to  be  used  on  special  design  requests  for  virtually  each  TSO  in  Europe. 
The  collaboration  among  TSOs  towards  agreeing  on  common  specification  requests  would 
lower  costs,  accelerate  project  delivery,  increase  the  amount  of  output  with  the  already 
existing  manufacturing  facilities  that  suppliers  can  produce  and  enable  a  better  access  of 
suppliers across the EU to other markets within Europe. First attempts to agree on common 
requirements  have  been  conducted,  initiated  by  the  EU’s  Horizon  Europe52 and  in  some 
instances by some TSOs53, while still implemented in divergent ways by different TSOs. The 
need  to  further  collaborate  in  this  regard  and  streamline  specifications  was  stressed  by 
ENTSO-E in the discussions under the high-level event on the Future of our Grids54.  

The  Commission  will  request  the  European  Standardisation  Organisations  (ESOs)  to 
provide a Workshop Agreement deliverable, involving all relevant stakeholders (ENTSO-E, 
TSOs  and  manufacturers)  on  common  product  specifications  that  should  be  agreed  by 
end-2024. These product specifications should be deployed by TSOs across the EU in their 
own  procurements and regulatory authorities should encourage them in tariff designs. The 
work  should  be  closely  coordinated  with 
the  High-Level  Forum  on  European 
Standardisation’s  working  group  on  green  electricity  system.  Going  forward,  if  deemed 
necessary,  this  could  be  a  first  step  towards  developing  technical  specifications  and 
ultimately EU standards for the entire electricity grid value chain.  

In cooperation with the above workstrand by the ESOs, the High-Level Forum will identify 
standardisation  gaps  and  propose  a  roadmap  by  Q1  2024.  The  focus  will  be  on  strategic 

51 Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union 
52 https://interopera.eu/  
53 E.g. TenneT’s 2 GW programme for offshore grids (https://www.tennet.eu/about-tennet/innovations/2gw-program) 
54 Conclusions ENTSO-E event ‘Future of our Grids’ session 3 on ‘People and procurement’ 

17 

 
 
issues based on current market and business trends, including geopolitical constraints, impact 
on European business and facilitating global trade. 

ENTSO-E and the EU DSO Entity should, together with grid operators, establish by Q4 2024 
mechanisms  for  providing  increased  visibility  to  manufacturers  into  their  upcoming 
procurement plans for equipment and systems on all voltage levels. This action could help 
the  manufacturers  of  grid  technologies  to  better  prepare  their  production  capacities  and 
skilled  workforce  and/or  plan  production  slots  for  catering  in  time  for  the  grid  expansion 
needs.  As  a  result,  potential  bottlenecks  in  the  technology  supply  chains  could  be  avoided. 
This  action  should  take  inspiration  from  the  interactive  EU  digital  platform  on  which  the 
auction  planning  of  the  Member  States  will  be  published,  as  announced  in  the  EU  Wind 
Power Action Plan. 

Action 14: Commission to promote common technical requirements for generation and 
demand connection  

Specifications  set  for  the  connection  of  new  demand  and  new  generation  projects  have 
important  implications  on  the  product  design  and  requirements.  Today,  such  technical 
requirements  are  deeply  divergent  across  Europe,  requiring  manufacturers  to  adapt  to  such 
requests locally  and  hampering  their  access to the single EU market. The  Commission  will 
assess and propose measures to promote common technical requirements in revisions of the 
network  codes  on  requirements  for  generators  and  demand  connection  code,  by  2025,  to 
ensure that manufacturers can fully benefit from the single market access. 

6.  CONCLUSIONS 

Electricity  grids  are  a  true  European  success  story  of  integration,  cooperation  and  mutual 
support. The indispensable role of electricity grids in the energy transition makes it of utmost 
importance to ensure that the right incentives are put in place, and undue barriers and risks 
minimised.  Grid  modernisation,  expansion  and  smartening  are  highly  needed  in  both 
transmission  and,  increasingly,  distribution  levels  to  enable  the  energy  transition  across  all 
economic sectors. The grids need to be ready for the new system needs, especially integrating 
renewables  and  flexible  demand.  These  challenges  in  network  development  translate  into 
high investment needs which amount to half a trillion Euro by 2030. 

This  European  Grid  Action  Plan  identifies  a  number  of  interlinked  measures  that  can  be 
completed within the next 18 months to provide an adequate investment framework for grids. 
For  example,  reliable  and  high-quality  network  planning  coupled  with  an  enabling 
framework  for  anticipatory 
in  areas  with  firm  plans  for  renewable, 
electromobility or heat pump deployments, together with streamlined permitting procedures 
for those grid projects, can substantially increase grid hosting capacities for new renewables 
and flexibility sources for the system. 

investments 

While the actions identified should be kicked off in the proposed timeline by the respective 
organisations,  they  can  only  produce  their  full  effect  through  a  strong  and  long-term 
commitment of all relevant actors, public and private, to collaborate on their implementation. 
Only by working together will it be possible to keep the momentum make our grids fit for the 
challenge. 

18 

 
For  this  reason,  the  Commission  will  set  up  within  the  Copenhagen  Energy  Infrastructure 
Forum a dedicated platform, in collaboration with Member States, ACER, ENTSO-E and the 
EU DSO Entity, EIB, manufacturers and NGOs, to regularly monitor the progress and report 
at the annual meeting of the Forum on delivery of this action plan.  

19 

 
 
 
ANNEX I – THE EUROPEAN GRID ACTION PLAN IN A NUTSHELL 

CATEGORY 

ACTIONS 

TIMELINE 

Accelerating the 
implementation of 
PCIs and developing 
new projects  

Improving long-term 
grid planning for a 
higher share of 
renewables and 
increased 
electrification 

Introducing 
regulatory incentives 
for forward-looking 
grid build-out 

Incentivising a better 
usage of the grids 

Improving access to 
finance  

Accelerating 
deployment through 
faster permitting and 
public engagement 

Strengthening grid 
supply chains  

1.  Commission, Member States and TSOs to strengthen support 
to PCI and PMI preparation, faster implementation and 
funding 

From 2024 

2.  ENTSO-E to enhance top-down planning towards 2050 by 

integrating the identification of offshore and onshore system 
needs and further considering hydrogen  

From Q1 2024 

3.  EU DSO Entity to support DSO grid planning by mapping 

the existence and characteristics of distribution development 
plans 

4.  Commission to propose guiding principles identifying 

conditions under which anticipatory investments in grid 
projects should be granted 

Mid-2024 

Q1 2025 

5.  Commission to issue guidance on cross-border cost sharing 

Mid-2024 

for offshore projects 

6.  ENTSO-E and EU DSO Entity to agree on harmonised 

definitions for available grid hosting capacity for system 
operators and establish a pan-EU overview 

7.  ENTSO-E and EU DSO Entity to promote uptake of smart 
grid, network efficiency and innovative technologies 

8.  ACER, in its next tariff report, to recommend best practices 
in relation to the promotion of smart grids and network 
efficiency technologies through tariff design, focusing on 
consideration of OPEX in addition to CAPEX and benefit 
sharing 

9.  Commission to identify tailored financing models and 
strengthen dialogue to address financing obstacles  

10.  Commission to increase visibility on opportunities for EU 
funding programmes for smart grids and modernisation of 
distribution grids 

11.  Commission to support permitting acceleration providing 

guidance and technical support on how to implement existing 
legislative tools and Member States to implement 
acceleration measures  

12.  Commission to launch a Pact for Engagement for early, 
regular and meaningful stakeholder engagement and 
regulatory support 

13.  ENTSO-E and EU DSO Entity to collaborate with 

technology providers to develop common technology 
specifications and improve visibility of grid project pipelines, 
to facilitate investments in manufacturing capacity and secure 
supply chains 

From 
adoption  

Q4 2024 

Q1 2025 

From 
adoption 

From Q1 2024 

2024-25 

From 
adoption 

Q4 2024 

14.  Commission to promote common technical requirements for 

By 2025 

generation and demand connection  

20 

 
 
 
 
ANNEX II – A PACT FOR ENGAGEMENT 

Ensuring early, regular and meaningful stakeholder engagement in grid development 

The cornerstone of our energy transition and economic recovery will be an electricity system 
to which renewable energy will contribute to around half of the generation in 2030 and which 
will be fully decarbonised well before 2050. We will be deploying renewable energy capacity 
at  a  pace  that  is  many  times  faster  than  today  which  will  require  an  integrated  and 
interconnected European  infrastructure. Accelerating the  development of  electricity grids in 
parallel with the massive scale-up of renewable energies is thus key to Europe’s spearheading 
its energy security and climate ambitions. 

None of this can be achieved in isolation or at the expense of the environmental protection of 
our  most  vulnerable  habitats.  The  revised  TEN-E  Regulation  will  continue  to  serve  as  a 
guiding  framework  for  identifying  and  building  Projects  of  Common  Interest  (PCIs)  if  and 
where  needed  to  connect  demand  and  supply  across  Europe.  Decision-making  processes, 
whether  at  the  selection  stage  for  the  PCI  label  or  later  on,  during  the  ground  routing  and 
construction, have been strengthened to be more inclusive, more transparent and accountable 
towards the views and needs of those communities affected by the construction. Whilst best 
practices are promoted and shared amongst project promoters, delays in grid development at 
both transmission and distribution level still occur due to lack of acceptance by communities 
affected  by  energy  infrastructure  projects.  Quantifying  and  monetising  the  benefits  of 
successful stakeholder engagement and avoidance of delays can be challenging in a complex 
regulatory  framework  for  building  infrastructure  that  crosses  several  jurisdictions  and 
competences. There is a need to reinforce the engagement framework towards the public into 
a  regular  and  meaningful  collective  effort  that  harnesses  trust  and  participation  in  grid 
development,  softens  the  impact  on  communities  and  nature,  redistributes  benefits  and 
enhances nature protection. 

In  its  Communication  ‘Grids,  the  missing  link:  An  EU  Action  Plan  for  Grids’,  the 
Commission  announces  the  launch  of  a  Pact  for  Engagement  to  ensure  early,  regular  and 
meaningful  stakeholder  engagement  in  grid  development,  together  with  Member  States, 
ACER and national regulatory authorities, ENTSO-E and transmission system operators, EU 
DSO Entity and distribution system operators, project promoters and civil society, calling for: 

1.  Designing and carrying out national and European communication efforts on the key 

role of transmission and distribution grids as enablers of the energy transition; 

2.  A joint cooperation effort between national and local authorities in ensuring effective 
implementation  of  permitting provisions for grid and  renewable energy  projects and 
best practices adopted and/or recommended at local, national and EU level; 

3.  A  commitment  from  Member  States  to  strengthen  their  involvement  in  the  regional 
cooperation fora such as the established High-Level Groups in order to accelerate the 
implementation  of  PCIs,  prioritising  the  most  mature  and  concrete  ones.  This  work 
will involve transmission system operators and project promoters, as well as national 
regulators and stakeholders; 

4.  An  open  dialogue  between  ministries,  regulatory  authorities  and  transmission  and 
distribution  system  operators  on  adequate  regulatory  support  for  early,  regular  and 

21 

 
meaningful  stakeholder  engagement  activities  on  the  basis  of  dedicated  chapters  on 
stakeholder engagement accompanying grid investment plans; 

5.  Providing  for  the  necessary  organisational  conditions  among  all  parties  involved  in 
permitting or stakeholder engagement processes aligned with the significant needs for 
grid deployment. 

The  Commission  will  work  closely  with  all  parties  adhering  to  the  Pact  for  Engagement 
within  appropriate  grid-related  cooperation  fora,  such  as  the  PCI  Energy  Days,  the  Energy 
Infrastructure Forum (Copenhagen Forum) and the National Competent Authorities’ Platform 
(NCA Platform) in order to support the implementation of the four pillars of the Pact. Within 
these  fora,  the  Commission  will  also  monitor  the  progress  achieved  by  these  initiatives,  as 
well  as  promote  the  exchange  of  practices  inspiring  further  efforts  from  all  parties  in 
developing and sustaining engagement processes that rise up to the EU’s grid challenge. 

The  Commission  invites  Member  States,  national  regulatory  authorities,  transmission  and 
distribution  system  operators,  project  promoters  and  civil  society  to  join  the  Pact  for 
Engagement  and  contribute  through  their  collective  actions  to  an  enabling  framework  for 
early, regular and meaningful stakeholder engagement in grid development.  

22