Questions and answers on the European Grids Package and the Energy Highways initiative

Why is the Commission presenting a specific initiative on grids and interconnectors? 

Europe faces unprecedented challenges to its security and competitiveness, while feeling the impact of climate change. Affordability of living is a major concern for our citizens and businesses, amid growing geopolitical tensions and trade fluctuations.

Energy infrastructure is the backbone of the energy system, and of Europe itself. Notwithstanding the significant progress made within the current frameworks, there are longstanding obstacles to energy infrastructure development and implementation which are hampering the completion of the Energy Union.

The insufficient integration and underinvestment in our energy infrastructure has a direct impact on energy bills of European citizens. With 98% of all oil and gas used in Member States imported, Europe remains too exposed to price volatility and geopolitical risks.

At the same time, while having one of the most interconnected grids in the world, ageing electricity infrastructure and limited interconnection capacity across Europe create bottlenecks that are holding back fast progress on the clean energy transition and the benefits this transition can bring in terms of affordability and competitiveness. 

The Commission is therefore proposing a new approach to energy infrastructure planning and development to tackle the structural challenges of the European energy system. By bringing a truly European perspective to project planning, these proposals will reduce the critical gap between the projects planned and those actually needed to meet our climate and energy goals. It will also ensure that projects are developed faster, with simpler permit-granting procedures, public buy-in, easier access to financing and supply chains and improved security and resilience.

The European Grids Package will enable the EU to deploy the grid capacity needed to unlock significant economic benefits for consumers and businesses, making the EU economy more competitive while progressing on decarbonisation.

These measures follow up on the objectives of the Affordable Energy Action Plan to reduce energy costs and the REPowerEU goal to end the dependence on Russian fossil fuels.

How will this initiative help to complete the Energy Union and benefit European industry and consumers? 

The European Grids Package and the Energy Highways initiative address structural issues in EU energy infrastructure planning and implementation, and will support the completion of the Energy Union by ensuring that infrastructure needs are matched by concrete projects happening on the ground.

First of all, these proposals will ensure that Europe maximises the use of existing infrastructure before investing in new capacity. This is key for achieving the energy transition and stronger energy security in a cost-effective manner. Second, they will allow for a faster and more rational development of the energy infrastructure needed to meet our climate and energy objectives.

The Energy Highways initiative, in particular, will address 8 key bottlenecks across Europe which represent the most urgent energy infrastructure needs. By supporting the concrete implementation of projects on the ground, it will enhance overall security of supply, help integrate more renewables into the system, reduce reliance on fossil fuels, thus decreasing energy prices.

The package includes proposals to create a more robust process for cross-border energy infrastructure planning, speed up permitting, ensure more effective mechanisms to share the costs and benefits of cross-border projects, as well as making cross-border infrastructure more resilient and secure.

Taken altogether, these proposals support the development of renewables and clean energy in the EU energy system and help move closer to completing our internal energy market. In turn, this would make energy more affordable and more secure.

Grid development can deliver real added value and cost savings for Europeans: investing €5 billion would reduce system costs by €8 billion, creating a net economic gain of €3 billion. Enhanced market integration could lead to annual cost savings of €40 billion, while boosting cross-border electricity trade by 50% could raise annual EU GDP growth by around €18 billion by 2030.

How will the proposals make the European energy system more resilient? 

The rationale behind the European Grids Package is to create a better-connected Europe-wide energy network, reinforcing Europe's strategic autonomy, security, and resilience, while reducing dependence on imports.

The Package proposes to simplify the process for selecting Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs). It also proposes to include projects that make infrastructure smarter and include security upgrades under the Trans-European Networks for Energy Regulation (TEN-E) infrastructure categories, enabling these projects to benefit from EU financial support from the Connecting Europe Facility (CEF).

By increasing interconnectivity across Member States overall, we strengthen the system's ability to handle shocks, stabilise prices, ensure security of supply, and instil solidarity, particularly during crises.

The Package also strengthens physical and cyber-security of cross-border infrastructure by integrating security considerations early in project planning. It promotes resilience by design, improving transparency regarding ownership to avoid dependencies on unreliable foreign actors and providing support to security upgrades for existing assets. 

What are the investment needs for the EU's energy network as we move towards climate neutrality in 2050? How will the EU contribute? 

The Commission estimates that €1.2 trillion will be needed in EU's electricity grids until 2040, including €730 billion for distribution grids alone, and €240 billion for hydrogen networks. Significant investments are therefore needed to ensure that our grids are fit for the future and achieve climate neutrality by 2050. 

As grid infrastructure is mainly financed through tariffs, this poses a challenge for consumers in the short term as they have to bear part of the costs. To address this, Europe is scaling up financial support for energy infrastructure under its proposal for the next long-term EU budget, the Multiannual Financial Framework, which would include a significantly reinforced Connecting Europe Facility.

The current EU long-term budget (2021–2027) already supports energy networks, with the Connecting Europe Facility providing €5.8 billion for cross-border projects. As part of the 2028-2034 Multi-annual Financial Framework, the Commission proposed a five-fold increase of the CEF- Energy budget, from €5.8 billion to €29.91 billion. Domestic grid projects will be eligible for funding under the National and Regional Partnerships Plans and the European Competitiveness Fund.

The European Investment Bank (EIB) is also a key partner in accelerating the rollout of cost-effective grids. The EIB has introduced a counter-guarantee of €1.5 billion to boost EU manufacturing capacity for grid components.

Private investments will also have a key role to play. The upcoming Clean Energy Investment Strategy for Europe, which the Commission intends to put forward next year, will also outline concrete ways to remove barriers and unlock private capital for strategic energy transition investments, such as grids.

How does the Commission propose to have more coordinated planning for Europe's energy infrastructure?

The Package proposes an EU cross-border energy infrastructure planning process that enables more coordinated identification of needs, ensuring projects are aligned with both current and future European objectives.

To achieve this, the Commission will develop a comprehensive central EU scenario that is cost-effective and that can help to deliver on the EU energy and climate targets. This scenario will be developed every 4 years with the possibility to be updated in case of need. It will be based on input from Member States and the stakeholders concerned and will serve as the basis for energy system operators (European Network Transmission System Operators - ENTSOs and European Network of Network Operators for Hydrogen-ENNOH) to identify the infrastructure capacity needs across the EU. This assessment will also rely on a set of binding principles established in the TEN-E Regulation and a methodology provided by ACER. This approach will support a more rigorous selection of projects that best respond to identified needs and ensures well-coordinated planning at EU level, hence avoiding waste of resources in unnecessary projects. 

How will the Commission ensure that there are no gaps in EU cross-border energy infrastructure? 

The current grid planning framework developed under the TEN-E Regulation has significantly advanced the coordination and development of cross-border energy infrastructure projects. However, some remaining gaps have been identified, and the existing processes fail to ensure that they are matched with possible projects. For example, ENTSO-E estimates that around half of cross-border electricity needs (41 GW) remain unaddressed by 2030.

To address this, the European Grids Package proposes a new “gap filling” process for the electricity system to be activated by the Commission when when there is an identified need for cross-border capacity that has not yet been met by suitable project proposals.

The process will be steered by the European Commission and triggered only when necessary. The exercise will require strong regional cooperation between the Member States involved.

As a first step, the Commission would invite system operators, and project promoters in some cases, to propose projects that address unmatched infrastructure needs.  These would be assessed and discussed at regional level before including them in the transmission operators' Ten-Year Network Development Plan (TYNDP). If this process does not lead to the identification of a suitable project, the Commission can launch a call for proposals open to any party.

How is the Commission making it faster to grant permits for energy infrastructure and renewable generation projects? 

Slow permitting remains one of the most significant barriers to timely deployment of energy infrastructure and generation facilities in the EU. Despite important steps having been taken at EU level in recent years, permitting still accounts for more than half of the total implementation time of electricity Projects of Common Interest and takes on average 5 years for transmission grids, and up to 9 years for renewable energy projects.

The European Grids Package, in coordination with the EU regulatory framework on environmental protection, establishes an EU level framework to simplify and accelerate permitting procedures for all grid infrastructure, renewable energy projects, storage projects and recharging stations. For the first time, it proposes to introduce time limits for the permitting process for all infrastructure projects, storage and recharging stations and further simplifies permitting for small-scale renewable, storage and recharging stations projects. It also ensures processes are fully digitalised and national authorities well-equipped to handle requests effectively.  

Furthermore, it introduces a rebuttable presumption that electricity infrastructure is of overriding public, and it streamlines environmental assessments for electricity PCIs and PMIs as well as project types which have lower environmental impacts, such as repowering of wind turbines and refurbishment of grids. It also introduces tacit approval if permitting authorities do not reply by the permitting deadlines. It strikes a balance between the need to protect biodiversity, nature and landscapes while at the same time ensuring the necessary swift transition to a decarbonised energy system and benefit sharing with citizens and local communities. 

How will this proposal ensure public acceptance for energy infrastructure development and fair cost-sharing for cross-border projects? 

Public participation in project planning, and operation is essential for building trust and achieving EU targets, minimising the risk lengthy judicial challenges. The Grids Package proposes that renewable energy projects over 10MW share benefits with the local population. 

It also allows for independent facilitators to support early dialogue and mediation, further reducing the risk of judicial challenges and fostering cooperative development. To address public acceptance concerns, the Commission will also offer a practical toolbox on public inclusion early next year which will facilitate the sharing of good practices on how to involve citizens and promote benefit sharing of renewable energy projects.

Cross-border projects create benefits that extend beyond the host Member States. This package further unlocks this potential by introducing appropriate solutions to distribute costs fairly and equitably, and to avoid disproportionate burdens on local consumers. This is key to enable the necessary cross-border infrastructure development, while maintaining public support.

To achieve this, the European Grids Package includes several proposals:

• First, it aims to provide more transparency and predictability in the way costs and benefits are assessed and shared. This includes more transparency on the benefits offered by the projects, also beyond the host countries and establishing EU-wide principles for a fair and predictable cross-border cost-allocation process.

• Second, it proposes voluntary bundling of cross-border PCIs and PMIs to enable and encourage cost-sharing discussions amongst the Member States concerned and non-EU countries.

• Third, it includes new rules on the use of congestion income - that is the income generated when there is insufficient capacity to couple demand and supply in connected market areas - for financing cross-border electricity infrastructure (PCIs and PMIs) as an incentive to cost-sharing.

By facilitating transparent and equitable cost-sharing, this proposal will allow citizens to fully benefit from the positive impacts of enhanced grid capacity and integrated markets—such as improved price stability, reduced energy costs, and increased security of supply.

How will the Package make access to grids more efficient? 

The Package includes guidance on timely and efficient grid connections, with a series of measures offering solutions on coordinated network planning involving society and industry, more efficient use of existing grids, including through network tariffs, connection charges or flexibility, and, finally, transparency of grid hosting capacity and connection procedures. 

It presents ways for countries to depart from the ‘first-come first-served' principle for grid connection requests and, instead, ensure timely and non-discriminatory access to the grid in a way that embraces social acceptance and industrial competitiveness. 

What are the “Energy Highways” and how will the Commission support the completion of these projects? 

The Energy Highways are key strategic interconnections that will support the completion of the Energy Union by addressing critical bottlenecks in the EU's energy system.

The initiative was first announced by President von der Leyen in the State of the Union 2025. These projects were identified as key cross-border energy infrastructure under the TEN-E framework, namely Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs), as the Affordable Energy Action Plan. 

With critical EU support, these projects can improve energy security, reduce dependence on imported fuels and help to integrate more clean energy, hereby helping to lower energy prices.

The Commission will fast-track the Energy Highways with targeted support for the Member States concerned and the project promoters involved, including leveraging financing and measures to further streamline and accelerate permit-granting processes to help bring the projects to a successful conclusion.

These are not the only projects the EU supports and promotes. The core of grids deployment in Europe remains the PCIs and PMIs. On December 2^nd, the Commission published the second list of PCIs and PMIs projects which are key to increase EU's competitiveness, decarbonisation, and enhancing Europe's energy security and independence.

The 8 Energy Highways are:

• Iberian Peninsula: Electricity interconnections across the Pyreneans to better integrate the Iberian Peninsula (Pyrenean crossing 1 and Pyrenean crossing 2).
• Great Sea Interconnector: Ending electricity isolation by connecting electricity between Cyprus and continental Europe.
• Harmony Link: Strengthening electricity interconnection of the Baltic States, boosting energy security and energy independence from Russia.
• TransBalkan Pipeline (TBP): reverse gas flow to increase the resilience of energy supplies in the Balkan region and eastern neighbourhood.
• Bornholm Energy Island: Transforming the Baltic Sea into an offshore interconnector hub.
• South-East Europe: Improve price stability and energy security in southeastern Europe, including through storage.
• SouthH2 Corridor: The South hydrogen corridor involving Tunisia, Italy, Austria and Germany.
• Southwest hydrogen corridor: from Portugal to Germany

For more information

Press release