The European Commission today announced the long-awaited Grids Package
The energy grids package marks a new approach to energy infrastructure, introducing a European perspective into infrastructure planning, speeding up permit procedures, and ensuring a fairer distribution of costs for cross-border projects. The new approach is expected to enable optimal use of existing energy infrastructure and, at the same time, accelerate the development of energy networks and other physical energy infrastructure across the EU.
To ensure the future accelerated development of energy infrastructure, the Commission is proposing additional ways of financing. The European Energy Grids Package includes proposals to create a more robust process for planning cross-border energy infrastructure, accelerating the issuance of permits, ensuring more effective mechanisms for sharing the costs and benefits of cross-border projects, and increasing the resilience and security of cross-border infrastructure.
Taken together, these proposals support the development of renewable energy sources and clean energy in the EU energy system and help bring us closer to completing our internal energy market. This, in turn, will make energy more affordable and more secure.
Developing the electricity grid can deliver real added value and cost savings for Europeans: investing €5 billion would reduce system costs by €8 billion, creating a net economic gain of €3 billion. Enhanced market integration could lead to annual cost savings of €40 billion, and boosting cross-border electricity trade by 50% could increase the EU’s annual GDP growth by around €18 billion by 2030.
The so-called 8 energy highways announced by President Ursula von der Leyen in her State of the Union address in 2025 are also presented. They address the most urgent infrastructure needs that require additional short-term support and commitment to implementation. They have been selected on the basis of their strategic importance for completing the Energy Union and the level of political support from the EU necessary for their successful implementation.
Energy highways are key strategic interconnections that will help complete the Energy Union by overcoming critical bottlenecks in the EU’s energy system. These projects have been identified as key cross-border energy infrastructure within the TEN-E, namely Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) in the Affordable Energy Action Plan.
With critical support from the EU, these projects can improve energy security, reduce dependence on imported fuels, and help integrate more clean energy, thereby helping to reduce energy prices. The Commission will accelerate the construction of energy highways with targeted support to the Member States concerned and the participating project promoters, including by attracting financing and measures to further streamline and accelerate permit-granting processes to help bring projects to a successful conclusion.
These are not the only projects that the EU supports and promotes. PCIs and PCIs remain at the heart of network deployment in Europe. On December 2, the EC published the second list of projects of common interest and projects of mutual interest, which are key to increasing the EU’s competitiveness, decarbonization, and enhancing Europe’s energy security and independence.
The eight energy highways are:
- Iberian Peninsula: Electricity interconnections across the Pyrenees to better integrate the Iberian Peninsula (Pyrenean Interconnector 1 and Pyrenean Interconnector 2).
- Large offshore electricity interconnector: Ending electricity isolation by connecting Cyprus to mainland Europe.
- Harmony connection: Strengthening the electricity interconnection of the Baltic States, increasing energy security and energy independence from Russia.
- Trans-Balkan Pipeline (TBP): Reverse gas flow to increase the resilience of energy supplies in the Balkans and Eastern Neighbourhood.
- Bornholm Energy Island: Transforming the Baltic Sea into a hub for offshore interconnections.
- South-East Europe: Improving price stability and energy security in South-East Europe, including through storage.
- SouthH2 Corridor: Southern hydrogen corridor involving Tunisia, Italy, Austria, and Germany.
- South-West Hydrogen Corridor: From Portugal to Germany
The rationale behind the European electricity networks package is to create a better-connected pan-European energy network, strengthening Europe’s strategic autonomy, security, and resilience while reducing import dependency.
The package proposes to simplify the selection process for projects of common interest (PCI) and projects of mutual interest (PMI). It also proposes to include projects that make infrastructure smarter and incorporate security improvements within the infrastructure categories of the Trans-European Energy Networks Regulation (TEN-E), which will allow these projects to benefit from EU financial support under the Connecting Europe Facility (CEF).
By increasing interconnectivity between Member States as a whole, the package strengthens the system’s ability to cope with shocks, stabilize prices, ensure security of supply, and promote solidarity, especially in times of crisis.
The package also strengthens the physical and cyber security of cross-border infrastructure by integrating security considerations at an early stage of project planning. It promotes resilience by design by improving transparency on ownership to avoid dependencies on unreliable foreign actors, and provides support to improve the security of existing assets.
The Commission estimates that by 2040, the EU’s electricity networks will need €1.2 trillion, including €730 billion for distribution networks alone and €240 billion for hydrogen networks. Significant investment is therefore needed to ensure that our networks are fit for the future and achieve climate neutrality by 2050.
As network infrastructure is mainly financed through tariffs, this poses a challenge for consumers in the short term, as they have to bear part of the costs. To address this, Europe is increasing financial support for energy infrastructure under its proposal for the next long-term EU budget — the multiannual financial framework, which will include a significantly reinforced Connecting Europe Facility.
The current long-term EU budget (2021-2027) already supports energy networks, with the Connecting Europe Facility providing €5.8 billion for cross-border projects. As part of the multiannual financial framework for 2028-2034, the Commission is proposing a fivefold increase in the CEF Energy budget, from €5.8 billion to €29.91 billion. National electricity network projects will be eligible for funding under national and regional partnership plans and the European Competitiveness Fund.
The European Investment Bank (EIB) is also a key partner in accelerating the roll-out of cost-effective networks. The EIB has introduced a €1.5 billion counter-guarantee to increase the EU’s production capacity for power grid components.
Private investment will also play a key role. The forthcoming Clean Energy Investment Strategy for Europe, which the Commission intends to present next year, will also outline concrete ways to remove barriers and unlock private capital for strategic investments in the energy transition, such as networks.
The package proposes a process for planning cross-border energy infrastructure in the EU, which allows for a more coordinated identification of needs, ensuring that projects are aligned with both current and future European objectives.
To achieve this, the Commission will develop a comprehensive EU central scenario that is cost-effective and can help achieve the EU’s energy and climate goals . This scenario will be developed every 4 years, with the possibility of updating it if necessary. It will be based on contributions from Member States and stakeholders and will serve as a basis for energy system operators (European transmission system operators — EMOPs and the European Hydrogen Network Operators—EMONs) in determining infrastructure capacity needs across the EU. This assessment will also be based on a set of binding principles established in the TEN-E Regulation and a methodology provided by ACER. This approach will support a more rigorous selection of projects that best meet the identified needs and ensure well-coordinated planning at EU level, thereby avoiding the waste of resources on unnecessary projects.
The current electricity network planning framework, developed under the TEN-E Regulation, significantly improves the coordination and development of cross-border energy infrastructure projects. However, some remaining gaps have been identified, and existing processes fail to ensure that these are matched with possible projects. For example, ENTSO-E estimates that around half of cross-border electricity needs (41 GW) remain unmet by 2030.
To overcome this, the European electricity networks package proposes a new ‘gap-filling’ process for the electricity system, to be triggered by the Commission when a cross-border capacity need is identified that is not yet met by suitable project proposals.
The process will be led by the European Commission and will only be triggered when necessary. This will require strong regional cooperation between the participating Member States.
As a first step, the Commission will invite system operators and project promoters in certain cases to propose projects that meet unmet infrastructure needs. These will be assessed and discussed at regional level before being included in the transmission system operators’ ten-year network development plan (TYNDP). If this process does not result in the identification of a suitable project, the Commission may launch a call for proposals open to any country.
Slow permit issuance remains one of the most significant barriers to the timely deployment of energy infrastructure and power generation facilities in the EU. Although important steps have been taken at EU level in recent years, permitting still accounts for more than half of the total time taken to implement electricity projects of common interest, taking on average 5 years for transmission networks and up to 9 years for renewable energy projects.
The European electricity networks package, in coordination with the EU regulatory framework for environmental protection, establishes an EU-level framework to simplify and accelerate permit procedures for all network infrastructure, renewable energy projects, storage projects, and charging stations. For the first time, it proposes to introduce deadlines for the permit granting process for all infrastructure projects, storage facilities, and charging stations, and further simplifies the permit granting process for small renewable energy projects, storage facilities, and charging stations. It also ensures that processes are fully digitized and that national authorities are well prepared to process applications efficiently.
In addition, it introduces a presumption that electricity infrastructure is of higher public interest and streamlines environmental assessments for electricity PSAs and PPAs, as well as for types of projects that have a lower environmental impact, such as wind turbine upgrades and grid renovations. It also introduces tacit approval if the authorities issuing permits do not respond within the deadlines for issuing permits. It strikes a balance between the need to protect biodiversity, nature, and landscapes, while ensuring the necessary rapid transition to a decarbonized energy system and sharing the benefits with citizens and local communities.
Public participation in the planning and operation of projects is essential for building trust and achieving EU objectives, while minimizing the risk of protracted legal challenges. The electricity networks package proposes that renewable energy projects with a capacity of more than 10 MW should share the benefits with the local population.
It also enables independent mediators to support dialogue and mediation at an early stage, further reducing the risk of legal challenges and encouraging the development of cooperation. To address concerns about public acceptance, the Commission will also propose, at the beginning of next year, a practical toolkit for public engagement, which will facilitate the exchange of good practices on how to involve citizens and encourage the sharing of benefits from renewable energy projects.
Cross-border projects generate benefits that extend beyond the host Member States. This package further unlocks this potential by introducing appropriate solutions for fair and equitable cost allocation and for avoiding a disproportionate burden on local consumers. This is key to enabling the necessary development of cross-border infrastructure while maintaining public support.
To achieve this, the European electricity networks package includes several proposals:
- First, it aims to ensure greater transparency and predictability in the way costs and benefits are assessed and shared. This includes greater transparency on the benefits offered by projects, including outside the host countries, and establishing EU-wide principles for a fair and predictable cross-border cost allocation process.
- Second, it proposes voluntary grouping of cross-border PSOs and PSIs to enable and encourage discussions on cost sharing between the Member States concerned and non-EU countries.
- Third, it includes new rules on the use of congestion revenues, i.e. revenues generated when there is insufficient capacity to match supply and demand in connected bidding zones, to finance cross-border electricity infrastructure (CI and CCI) as an incentive for cost sharing.
By facilitating transparent and fair cost sharing, this proposal will enable citizens to fully benefit from the positive effects of increased network capacity and integrated markets,such as improved price stability, reduced energy costs and increased security of supply.
The package includes guidelines for timely and efficient grid connection, with a series of measures offering solutions for coordinated network planning involving society and industry, more efficient use of existing networks, including through network tariffs, connection or flexibility charges, and finally,transparency of network hosting capacity and connection procedures.
It presents ways for countries to deviate from the “first come, first served” principle for requests to join the network and instead ensure timely and non-discriminatory access to the network in a way that covers social acceptance and industrial competitiveness.
Next steps
The legislative proposals will be submitted to the European Parliament and the Council in accordance with the usual legislative procedure. In parallel, the Commission will continue to work closely with Member States and all stakeholders to implement key cross-border energy infrastructure projects, as recently published in the second Union list of projects of common interest and projects of mutual interest. Such cooperation will be key to the rapid implementation of the Energy Highways initiative, as well as to speeding up the permitting of renewable energy projects, storage projects, and refueling stations.
For more information
Communication on the European Energy Networks Package — Energy — European Commission
Proposal for a revision of the Trans-European Energy Network (TEN-E) Regulation — Energy
Guidelines for efficient network connections — Energy — European Commission
Guidelines for contracts for difference — Energy — European Commission
