Trillions needed to upgrade Europe’s energy infrastructure

The European Union’s (EU) energy system requires comprehensive modernization that will cost trillions of euros to prevent potential power outages, support the growing green energy sector, and update energy storage capacities.

According to experts who spoke to Reuters, these investments are critically important for the continent’s energy security.

The need for modernization has become even more urgent following a recent major power outage centered in Spain that affected Portugal, Andorra, and parts of France and Belgium.

According to the report, the outage coincided with Spain’s acceleration of its transition to renewable energy sources to reduce dependence on fossil fuels after disruptions in oil and natural gas supplies began with the war in Ukraine.

The increase in solar and and wind energy, due to the variable nature of these sources, created additional challenges and instability in the grid, leading to major outages.

Experts emphasize that the aging of grids is also a significant problem, with half of the transmission lines in the EU being over 40 years old.

Furthermore, the increasing energy demand from data centers and electric vehicles, along with the need for protection against cyberattacks, are cited as other reasons necessitating modernization.

Significant funding is required for the integration of renewable energy sources into the system and the updating of infrastructure.

The International Energy Agency (IEA) estimates that $600 billion needs to be spent annually until 2030 for the necessary modernizations.

The European Commission, on the other hand, predicts that 2 to 2.3 trillion euros will be needed to renew the grids by 2050.

According to analysts at the think tank Bruegel, the 80 billion euros invested by European companies in energy grids in 2023 (although above the previous level of 50 to 70 billion euros) is insufficient, and this figure needs to be increased to 100 billion euros annually.

Spain was the most affected by the outage at the end of April.

Madrid Barajas International Airport suspended operations, and metro services in Valencia and Madrid were disrupted. Additionally, train services experienced interruptions, and traffic lights did not work.

Nuclear power plants were also temporarily shut down “for safety reasons.” It is estimated that approximately 7 people lost their lives and 25 were injured in Spain during the outage.

Along with these developments, according to a Bloomberg report, the European Commission is preparing to propose a full ban on both pipeline and liquefied (LNG) Russian gas imports to EU countries by the end of 2027.

These measures are expected to be implemented as part of the EU’s roadmap for phasing out Russian gas, which is anticipated to be presented on May 6.

In 2022, the EU provided 1 billion euros in emergency aid and 400 electricity generators for the urgent restoration of energy supply to Ukraine.