Europe’s power grid is facing several challenges and badly needs an upgrade.
First, aging infrastructure and limited interconnection capacity create a bottleneck in the system.
Secondly, there simply aren’t enough transmission lines to handle the increasing amount of electricity generated.
Thirdly, several EU countries are increasingly investing in and generating more renewable energy, but due to grid congestion and a lack of transmission lines, that energy could be wasted.
A report commissioned by climate NGO Beyond Fossil Fuels estimates that renewable energy projects in 16 European countries generating 1,700 gigawatts (GW) – three times the amount needed to meet the EU’s 2030 climate goals – have been stuck in queues.
Fourthly, there is a need for the EU’s network integration; several EU member countries are not on track to meet the 15% interconnection goal by 2030. Lastly, funding is insufficient to upgrade the EU’s network. All these issues combined translate into higher power bills for households.
To address these challenges, the European Commission proposed two initiatives: the European Grids Package and the Energy Highways initiative, which is aimed at modernizing and expanding the bloc’s energy grids as well as developing a centralized EU plan for cross-border electricity infrastructure, working with grid operators and companies to get projects off the ground (Kyllmann, 2025).
The initiative also intends to strengthen the EU’s energy independence from Russia.
The Grids Package aims to accelerate permitting procedures so that energy infrastructure can be built more quickly across the EU. This means that the Commission will propose changes to EU law that will exempt grid projects from environmental impact assessments, preventing years-long delays. Additionally, the Package will ensure a fairer cost-sharing for cross-border projects.
The Grids Package will focus on “Eight Energy Highways,” which are envisioned as the key to improving grid reliability and lowering energy prices in Europe.
President Ursula von der Leyen announced the eight energy highways in her 2025 State of the Union address, which tackles Europe’s most urgent power infrastructure needs, including connecting the offshore and onshore renewable energy projects within countries and across borders.
According to the commission’s estimates, EUR 1.2 trillion in investment will be needed for Europe’s electricity grid by 2040. Distribution networks account for EUR 730 billion, compared to EUR 240 billion for hydrogen infrastructure (EU presents, 2025).
These are the eight infrastructure projects that will be prioritized at the EU level:
- Pyrenean Crossing 1 and Pyrenean Crossing 2 – to better integrate the Iberian Peninsula with power interconnectors across the Pyrenees to France
- Great Sea Interconnector – to connect Cyprus with continental Europe and end its electricity isolation
- Harmony Link – to strengthen power links with the Baltic states
- TransBalkan Pipeline (TBP) reverse flow – to improve energy supplies in the Balkan region and neighbouring eastern states
- Bornholm Energy Island – to turn the Baltic Sea into an offshore interconnector hub and improve price stability and energy security in southeastern Europe
- South2 Corridor – the South Hydrogen Corridor
- Southwest Hydrogen Corridor – from Portugal to Germany
The grid infrastructure is the foundation of the European Union’s electricity systems. The European Grids Package and the Energy Highways initiative mark a significant moment in the EU’s energy transition and finally address the infrastructure gap needed to fully unlock its renewable energy potential.
Its high price of €1.2 trillion and the need for coordination among EU member countries point to the magnitude of the challenge going forward.
However, achieving a truly integrated power network means lower energy bills, energy independence, and a reliable, clean electric grid.
Sources:
EU plans to upgrade energy infrastructure to lower bills and boost independence. (2025, December 10). European Commission. Retrieved from https://commission.europa.eu/news-and-media/news/eu-plans-upgrade-energy-infrastructure-lower-bills-and-boost-independence-2025-12-10_en
Perišić, J. (2025, December 11). EU presents European Grids Package: faster permitting, stronger interconnections, lower energy bills. Balkan Green Energy News. Retrieved from https://balkangreenenergynews.com/eu-presents-european-grids-package-faster-permitting-stronger-interconnections-lower-energy-bills/
Kyllmann, C. (2025, December 10). Q&A: EU Grid Package – How Europe plans to bolster the energy transition’s backbone. Clean Energy Wire. Retrieved from https://www.cleanenergywire.org/factsheets/qa-eu-grid-package
Fabian, E. (2025, December 11). Grids Package and Energy Highways: EU plans to enhance cross-border flows. CEEnergy News. Retrieved from https://ceenergynews.com/electricity/grids-package-energy-highways/
Leave a Reply