EU industry seeks deep energy market reform

The EU industry is seeking a deep reform of the energy market. The deficit of investments in the European energy grid is estimated at €800 billion by 2030. This is stated in the report of the European Round Table (ERT), Euractiv reports.

Renewable energy producers complain that they lack a grid to connect solar panels and wind turbines at a time when Europe is struggling with the high cost of existing power grids. In Germany, for example, grid fees account for more than 20% of the total cost of electricity. These fees are set to rise as additional expansion investments are made.

The European Commission estimates that €584 billion of additional investment in energy infrastructure is needed by 2030. At the same time, according to BCG, investments are estimated at €800 billion by 2030 and €2.5 trillion by 2050.

Annual investments in the EU energy infrastructure in recent years are estimated at €32 billion. This trend could lead to a 60% shortfall in the energy grid by 2050.

«Strengthening of European power grids is necessary to continue the movement towards decarbonization. More network capacity is needed for cars, industry, heating and cooling, which will become increasingly electrified. In addition, the system needs greater resilience to reduce dependence on the variability of solar and wind generation,” ERT notes.

According to BCG, spending on energy grid investments should more than double annually. This means that between €70 billion and €84 billion should be spent annually. 60% of these funds will be spent on distribution networks, 25% on transmission networks, and the rest on cross-border connections and storage systems.

To overcome the crisis in the European energy market as quickly as possible, industrialists propose to speed up the permitting process, revise its structure and stimulate a single European energy market.

According to EUROFER, the European Steel Association, ensuring favorable conditions for the decarbonization of the steel sector should be a priority for the EU. Green steel produced in Europe plays a strategic role as it helps to create a zero-emission economy.

Over the past few years, the bloc and member states have launched a number of initiatives to support the transition of European industry to carbon neutrality. However, there are bottlenecks and issues that remain unresolved. These include the supply of low-carbon energy at internationally competitive prices.