Grids and trans-European Networks for Energy

Adequately integrated energy networks are a prerequisite for making the internal energy market work, for enabling trade that helps keep prices in check, for integrating renewable energy sources and helping manage their variability. Energy infrastructure is the “other side of the coin” or the hardware of the internal market, the rules that govern market functioning and access to infrastructure forming the first side or the software.

The EU’s internal market rules have evolved over almost three decades, from the first package in 1996, which started the market liberalisation process, to the gas and hydrogen package as well as the review of electricity market design, both in 2024, as, i.a., the response to the energy crisis and the high and volatile electricity prices. Today, all EU Member States’ electricity markets are coupled: consumers and producers benefit from cross-border trade and optimisation of electricity flows in the order of 34 billion euros annually, as estimated by ACER.

EU’s energy infrastructure policy[1] underwent a major rehaul in 2013, whereby focus was put on cross-border infrastructure development, regional cooperation to identify and monitor progress of key projects (called projects of common interest PCI), and a toolbox to facilitate implementation. The Regulation on trans-European energy networks (TEN-E) was reviewed in 2022, when fossil gas was removed from its scope[2], hydrogen brought in and more focus was put on the integration of EU’s off-shore energy potential.

The European Commission announced[3] earlier this year the adoption of a grids package for the first quarter of 2026, although latest information suggests the adoption under the current Danish EU Presidency before the end of the year.

Trends, policies and other factors affecting energy infrastructure needs and development

The energy sector and energy infrastructure are facing massive changes in the operating environment, in particular:

• To decarbonise our economy, electrification of industry, transport and buildings is necessary. Until now, however, the speed of electrification has been slower than expected, and electricity consumption has stayed constant if not stagnated over the past decade, possibly making reaching greenhouse gas targets more challenging. For investments in electrification to speed up, also investments in grids will be necessary to support the process and ensure sufficient transmission and distribution capacity. Yet, it still takes more than ten years to complete a major infrastructure project, and often more for cross-border projects.
• The large majority of new investments in renewables, mainly solar and wind, are today connected at the local level, directly to the distribution grids. The speed of investments has been such that bottlenecks have become visible and connection queues long, in particular in many cities. This decentralisation process will put new requirements on grids, their planning and operation. The interaction between distribution and transmission grids will have to be efficient and take into account the optimal interplay between different energy carriers.
• Because of the rapidly increasing amount of solar and wind production in the electricity mix, variability of both production and prices has become a key element shaping the development of the market. Much more flexibility needs to be brought into the system, from both the consumption and production sides, supported again by adequate grids from local to European levels.
• Geopolitical risks have become a new reality since 2022 when Russia attacked Ukraine and have dramatically broadened the concept of energy security and security of energy supply. Whilst well-integrated grids are key in ensuring security of supply nationally and across borders Europe-wide, geopolitical developments and hybrid warfare risks put new requirements on energy security and also on grids.

How to best make EU’ infrastructure policy fit for the new era?

Against this background, a renewed focus on grids is necessary, and the Commission’s announcement of a Grids package comes timely.

Distribution system operators and investments in local grids will play an increasingly important role. More flexibility, demand response, batteries and storage are urgently needed. And the infrastructure and grids must be protected against malevolent physical or cyber action and built to provide sufficient system resilience.

FSR research provides useful insight into many aspects related to grid development, their planning and needs for future policy adjustments. These include looking at the compatibility of the TEN-E regulation with the Green Deal[4], the governance of the North Sea cooperation[5], the incentives for efficient use of existing infrastructure[6], the challenges of industry decarbonisation and CO₂ transport[7], comments on Mr Draghi’s report[8] and, most recently, recommendations on the TEN-E policy and regulation[9] in view of the upcoming Grids package.

The Policy Paper on the TEN-E looks at the different challenges that EU grids face and puts forward recommendations to improve the EU’s policy framework for grids, the TEN-E, by focussing on two important priorities on the Commission’s agenda, namely simplification, and competitiveness and affordability.

Our recommendations

The recommendations are based on the following two guiding questions:

• Can the TEN-E framework be simplified or its processes streamlined?
• Can the TEN-E framework be simplified to accelerate the implementation of the necessary investments and the most urgent projects of common interest?

The answers provided in the Policy Paper to both questions are positive. Twenty-one concrete proposals are made in the Paper; these can be grouped into five broader categories as follows:

1. The TEN-E policy framework is in urgent need of simplification overall and in particular as regards the PCI identification process. This can be achieved by removing bureaucracy that does not add value, by simplifying scenario development and by making scenarios coherent when used in different assessments. Furthermore, project implementation can also be made faster by strengthening the role and governance of regional cooperation, as a stepping stone to integrated energy grids and markets at the EU level.
2. To address the geopolitical risks, the TEN-E framework should be broadened to also make it possible to include measures and projects that protect the existing infrastructure or that provide resilience in case of a physical or cyber incident on the grid. In addition, making the current electricity grid more efficient through digitalisation measures is key for competitiveness.
3. It is urgent to make sure that industry can access the infrastructure it needs to be competitive and to decarbonise by stimulating electrification through better integration of onshore and offshore planning, by putting priority on local grids and by ensuring that industry has decarbonisation options available through top-down planning and implementation of hydrogen and CO2 grids by 2035.
4. Regional cooperation should be put at the centre with the aim to speed up the implementation of PCIs, from the identification of infrastructure needs and bottlenecks, to agreeing on regional prioritisation and to effective monitoring progress.
5. The TEN-E toolbox for project implementation should be further streamlined and strengthened on permitting procedures by creating a 28^th regime based on best practices in Member States. The Paper also calls for a considerably bigger EU budget for grids to facilitate cross-border cost sharing and to keep tariffs in check.

These questions, and many more, will be discussed in the FSR Regulatory Policy Workshop on Energy networks for the green transition that will take place in Brussels on 3 October 2025.

[1] The trans-European networks (TEN) are at the centre of EU’s policy for transport, energy and telecoms networks. For energy (TEN-E), the policy framework consists of the TEN-E Regulation and its financing instrument Connecting Europe Facility (CEF), as well as the different regional cooperation forms, notably the High-Level Groups.

[2] Assessment showed that EU’s gas network was sufficiently integrated and thus able to ensure security of supply without further cross-border investments.

[3] Action Plan for Affordable Energy Unlocking the true value of our Energy Union to secure affordable, efficient and clean energy for all Europeans, COM/2025/79 final.

[4] Schittekatte, Tim, Pototschnig, Alberto, Meeus, Leonardo, Jamasb, Tooraj, Llorca, Manuel: Making the TEN-E regulation compatible with the Green Deal: eligibility, selection, and cost allocation for PCIs, 2020/27, Florence School of Regulation (FSR); Copenhagen School of Energy Infrastructure, https://cadmus.eui.eu/entities/publication/7fb3e462-7a7b-5d09-8da4-eda4e3af9908.

[5] Meeus, Leonardo: Off-shore wind energy in the North Seas: crafting collaboration and navigating governance, 2025, FSR, https://cadmus.eui.eu/entities/publication/555cf293-8a10-57b5-ab52-283e7176c468.

[6] Pototschnig, Alberto, Rossetto, Nicolò: Benefit-based remuneration of efficient infrastructure investments, 2024, FSR, https://cadmus.eui.eu/entities/publication/324f2970-514e-55c2-9b59-44ae959f4774.

[7] Jones, Christopher, Piebalgs, Andris: The role of CCUS on the EU road to climate neutrality, 2022, FSR, https://cadmus.eui.eu/entities/publication/85347d29-b9fc-51a8-9bd3-031045e8a2b3.

[8] Sikow-Magny, Catharina: Making TEN-E into a truly European project, 2024, FSR, https://cadmus.eui.eu/entities/publication/0075cfe2-f411-47bf-a5d3-2e4135f0da3d.

[9] Sikow-Magny, Catharina: Trans-European energy networks (TEN-E) – ideas for simplification in view of accelerating project implementation, 2025, FSR, https://cadmus.eui.eu/entities/publication/0075cfe2-f411-47bf-a5d3-2e4135f0da3d.