EU ministers agree on plan to upgrade energy grids, speed up permits

European Union energy ministers have reached an agreement on their negotiating stance for a future legislative package aimed at upgrading the continent's energy grids. This reform seeks to expedite permitting processes and modernize infrastructure, with Spain and Portugal advocating for a stronger role for cross-border electrical interconnections.

The deal, struck by the "27" ministers in Luxembourg, will serve as the foundation for final negotiations between the Council of the EU and the European Parliament. The goal is to finalize the legislation by the end of the year. The package includes revisions to the Trans-European Networks for Energy regulation and a directive on permitting, responding to the urgent need to upgrade infrastructure to support decarbonization and build a more secure and resilient European grid.

Energy grids are currently seen as a significant bottleneck for the green transition, as electricity demand rises and requires immediate system modernization. A critical element of the agreement involves financing investments through "congestion income," which refers to revenues generated at points where energy transport between different trading zones experiences bottlenecks. Member states have agreed to reinvest a portion of this income into cross-border projects to alleviate these constraints.

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The energy networks are considered today the biggest potential obstacle for the green transition, as the demand for electricity increases and requires immediate modernization of the system.

The reinvestment will be phased in, starting at 10% in 2028 and increasing by five percentage points annually, reaching 25% by 2031. Regarding permitting, ministers support faster and more transparent procedures, including the creation of digital portals to simplify applications. Electricity and renewable energy projects will be designated as being in the "overriding public interest," aiming to reduce grid connection waiting times from up to ten years in some cases to six months, or two years for more complex projects.

Spain supported the agreement but expressed reservations, viewing grids as a fundamental pillar of the Energy Union, not merely a bilateral issue. As the final text does not fully reflect this position, Madrid submitted a written statement urging the European Parliament to strengthen the binding nature of interconnections. Portugal immediately backed this initiative, while France, traditionally hesitant on such projects, voted in favor of the compromise. These three countries, along with the European Commission, will meet soon to exclusively discuss interconnections on the Iberian Peninsula.

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The networks constitute a fundamental pillar of the Energy Union and not a simple bilateral issue.