Laurent Bataille, EVP of European operations at Schneider Electric looks forward to the ‘Age of electricity’.
As we enter the ‘Age of Electricity’, Europe’s future depends on modern, digital grids that can keep pace with the continent’s energy transition and industrial ambitions. The rapid expansion of renewable energy sources like wind and solar, combined with rising electricity demand and mounting concerns over energy security, is placing unprecedented pressure on Europe’s aging grid infrastructure – 40% of which is 40 years old.
This isn’t just an energy problem; it could stall Europe’s industrial ambitions altogether. High energy costs - two to four times higher compared with other major regions - put pressure on a European economy that is projected to grow relatively slowly, by 1.4% in 2025. And power demand could rise by 20% over the next decade as European industry adopts AI-driven technologies to drive productivity and efficiency gains.
The path to renewed competitiveness lies in accelerating digitalization and electrification. This can reduce reliance on power from costly fossil fuel imports, bolster energy independence and build economic resilience – saving Europe €250 billion per year. But to achieve this new paradigm, electricity grids will need the capacity and flexibility to support the adoption of renewables and ensure the energy is stored and distributed effectively to meet growing demand.
The EU Grids Package has the potential to transform Europe’s energy infrastructure and strengthen the foundations for a clean and competitive future. It must move the grid from being a passive backbone into a dynamic, intelligent network that fosters electrification, decentralization, and digitalization.
What is the European Grids Package?
The European Grids Package is a cornerstone of the Clean Industrial Deal (CID) , building on the momentum of the 2023 EU Grids Action Plan.
The package aims to strengthen European network planning and maximize the use of existing infrastructure, increasing the uptake of smart, digital grids, and to accelerate the delivery of projects on the ground with faster permitting and grid connections.
While renewables, EVs and heat pumps are scaling faster than local grids, most curtailment, delays and connection queues are caused by distribution constraints and lack of modernization. This is already costing €8.9 billion per year and rising - underscoring the urgent need for upgrade and expansion of the grid.
What does the Grids Package mean in practice? This includes legislative proposals to streamline the permitting processes required to bring grids, renewables, and energy storage online.
There is also the question of investment. To drive a clean transition in Europe’s energy sector, the Commission estimates that, by 2040, 1.2 trillion EUR of investment will be needed for grids, with over 60% of investment needed for distribution grids. The slashing of red tape should encourage private investment, but support will be needed to reach the Commission’s ambitious targets.
Our recommendations
Schneider Electric is an active participant in the legislative process, providing input that will help inform the upcoming interinstitutional discussions on the Grids Package. In particular, we call for urgent action in three areas to ensure the Grids Package will deliver its full potential:
1. Accelerate distribution grid investments
To meet Europe’s electrification goals, distribution grid investments must reach EUR 730 billion by 2040. Regulators should update remuneration frameworks to support both anticipatory and OpEx-based investments, shifting the focus from infrastructure-heavy projects to smart, data-driven grid management. Improved access to EU and EIB financing, along with better knowledge sharing, will help utilities adopt these changes.
Flexibility is a strategic asset. It can cut peak demand and enhance resilience, offering over €71 billion in direct consumer benefits and more than €300 billion in indirect gains. As such, we recommend a dedicated EU Flexibility Strategy requiring Member States to assess and procure local flexibility (at least 10% of peak load) to reduce peak demand, defer costly investments, and enhance resilience. Distribution System Operators (DSOs) and Transmission System Operators (TSOs) must share balancing responsibilities, supported by updated network codes and effective incentive-based regulatory frameworks.
Finally, the EU should adopt a common planning template for Distribution Network Development Plans (DNDPs), aligned with national and European energy and climate objectives. This will ensure greater transparency, consistency, and coordination among DSOs, while accommodating local diversity and supporting Europe’s clean energy transition.
2. Make the shift from traditional, to active SMART grids
Europe must shift from traditional grids to active, smart grids that are intelligent, responsive, and resilient. This transformation requires full digitalization of distribution infrastructure, with automated control systems and cloud-based supervision. A dedicated Smart Grid IT/OT upgrade plan should be introduced, making energy management systems (EMS) and advanced distribution management systems (ADMS) eligible for support.
To maximize efficiency and accelerate renewable integration, the Grid Package must go beyond infrastructure upgrades. It should prioritize digitalization and flexibility, optimize energy generation and consumption in real time, and address bottlenecks and curtailment, not just on transmission but also distribution, where decentralized, demand-side flexibility should take place. Defining harmonized, outcome-based KPIs, such as shorter connection queues, lower curtailment rates, and reduced congestion, will help regulators track progress and share best practices.
Finally, harmonizing European grid codes and technical standards is essential for system integration and operational efficiency. Consistent requirements across countries will benefit grid operators and manufacturers, supporting Europe’s energy transition.
3. Remove grid access and permitting bottlenecks
Complexities around permitting permissions have often meant that projects take years to connect to the grid. The proposals from the Grids Package to ease grid access and permitting bottlenecks is critical to accelerating Europe’s energy transition.
Equally important is the swift implementation of RED III and dissemination of EU guidance on grid permitting. Streamlining and expediting permitting processes, especially for strategic projects, will unlock clean energy deployment and ensure Europe’s grids are ready for the future.
The grid connection prioritization should use clear, measurable criteria, such as flexibility, grid stability, and congestion relevance, while enabling flexible connection agreements (in line with Article 6a of the Electricity Directive) that let DERs, EV charging hubs and other flexible assets connect earlier under defined operational limits. This approach accelerates connection without overloading the grid.
A smarter, more resilient Europe
Europe’s problem lies in implementation. Grid investment must be accelerated at both transmission and distribution levels, and regulators empowered to implement existing rules for rewarding smart, flexible grid solutions. The continent cannot afford to modernize its grid with 20th-century tools. The energy system of the future will be digital, decentralized, and flexible. The technology is readily available to make it happen. The European Grids Package is a prime opportunity to turn ambition into bold action, driving a resilient, innovative, and vibrant Europe.
Schneider Electric stands ready to support the Commission in delivering this transformation and urges policymakers to act with urgency and ambition to secure Europe’s future.