Path to cheap power will be pricey

Europe’s ambition to develop cheap, clean energy has recently received a harsh reality check, as power failures and a string of cancelled renewables projects made it clear that the road to inexpensive power will carry a very high price tag.

- Ron Bousso

European investments in renewable energy have risen sharply over the past decade as governments have begun implementing policies to reduce greenhouse gas emissions — an effort that sped up after Russia's invasion of Ukraine created an energy price shock.

The share of renewables in the EU’s power sector rose to 47% in 2024 from 34% in 2019, with a record 168 gigawatts (GW) of solar and 44 GW of wind power capacities installed between 2022 and 2024 alone, according to EU data. In Britain, renewable generation exceeded 50% for the first time in 2024, data showed.

But investment in grid infrastructure, including pylons, cables, transformers, and battery storage technology, has barely kept up with the rapid change in the power generation mix. Between 40% and 55% of low-voltage lines will exceed the age of 40 by 2030, while their length increased only by 0.8% between 2021 and 2022, according to a European Commission report.

The commission last week issued guidance for developing electricity networks in which it estimated the bloc will require €730 billion (27.3 trillion baht) of investments in power distribution and another €477 billion in transmission grid developments by 2040.

The underinvestment in grid infrastructure has created strain in many systems, a risk that was laid bare on April 28, with the catastrophic blackout in the Iberian Peninsula.