Published by Global Banking & Finance Review®
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe EU plans to tackle power grid bottlenecks by developing cross-border energy infrastructure, aiming to reduce costs and improve efficiency.
By Kate Abnett
BRUSSELS, Dec 8 (Reuters) - The European Union plans to step up efforts to develop cross-border energy infrastructure, aiming to ease costly bottlenecks and accelerate the construction of new power grids, according to draft documents seen by Reuters.
EU countries have invested heavily in low-cost renewable energy, but grid upgrades and expansion have failed to match this. As a result, wind and solar output is increasingly curtailed to avoid overloading networks, wasting electricity and adding costs for consumers.
To address this, the European Commission will develop a centralised EU plan for cross-border electricity infrastructure and work with grid operators and companies to get projects off the ground, according to the draft proposal, due for publication on Wednesday.
A lack of grid investment has contributed to Europe's high energy prices, which are two to three times those in China and the U.S., a frequent complaint from industries that say steep bills undermine competitiveness.
"Grid development can deliver real added value and cost savings for Europeans," the draft document said. It said investing five billion euros in grids would shave eight billion euros off the overall cost of the power system.
OUTDATED NETWORKS DRIVE UP ENERGY BILLS
Failure to act could see the EU forced to curtail up to 310 terawatt hours (TWh) of renewable power generation in 2040 because of grid constraints, the draft said. For comparison, EU households consumed 691 TWh of electricity in 2023, official data show.
A second draft EU legal proposal showed the Commission will propose changing EU law to let governments exempt grid projects from requiring environmental impact assessments, citing long delays that can stall projects for years. Small-scale renewable and storage projects would no longer require environmental permits.
A Commission spokesperson declined to comment on the draft. Any changes to EU laws would require approval from EU countries and lawmakers.
The proposal also sets shorter deadlines for authorities to approve grid-related permits, including a six-month limit for new electric vehicle charging stations.
If authorities fail to respond within the timeframe, permits would be automatically granted - a move designed to slash the years-long delays in some EU countries.
(Reporting by Kate Abnett, Editing by Louise Heavens)
Renewable energy refers to energy derived from natural sources that are replenished at a higher rate than they are consumed, such as solar, wind, and hydroelectric power.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
Grid development involves upgrading and expanding the electrical grid to improve the transmission of electricity, enhance reliability, and accommodate renewable energy sources.
Cross-border energy infrastructures are systems that enable the transmission of energy across national borders, facilitating energy trade and improving energy security among countries.
Explore more articles in the Finance category
