Commission proposes upgrade of the EU’s energy infrastructure to lower bills and boost independence
The backbone of European energy system, the grids infrastructure, will be modernised and expanded to unleash its full potential. The Commission’s European Grids Package and the Energy Highways initiative, proposed today, will enable energy to flow efficiently across all Member States, integrating cheaper clean energy and accelerating electrification. This will help lower energy prices and support affordable living for all Europeans. It will ensure secure and reliable supply as Europe moves away from Russian energy imports to achieve energy independence.
The Grids Package marks a new approach to energy infrastructure by bringing a truly European perspective on infrastructure planning, while accelerating permitting procedures and ensuring a fairer division of costs regarding cross-border projects. The new approach will allow the best use of our existing energy infrastructure and, in parallel, accelerate the development of grids and other physical energy infrastructure across the EU.
The published package includes legislative amendments to existing laws, as well as non-legal documents, steering future EU and national policy on grid development. Here is the list of published documents, and an explainer below:
- Communication on the overall grid package:
This communication details all the measures below, as well as the new Energy Highways initiative, aimed at accelerating the buildout of trans-European electricity, hydrogen and natural gas grids.
- Proposal for reviewing energy grid planning via amendments to the Trans-European Network for Energy (TEN-E) Regulation:
The European Commission will establish an EU central scenario for grid planning, ACER is responsible for creating a methodology for infrastructure need assessment, and the European networks for system operators will then together identify infrastructure needs. In addition, hydrogen is now fully embedded in the TEN-E Regulation, with new categories for dedicated hydrogen infrastructure and clear support for repurposing existing gas assets. Hydrogen and electricity Projects of Common/Mutual Interest (PCIs/PMIs) benefit from fast-tracked permitting and “overriding public interest” status.
- Proposal for accelerating certain permitting processes via amendments to the Renewable Energy Directive, Internal Electricity Market Directive and Internal Markets for Renewable Gas, Natural Gas, and Hydrogen:
The Commission proposes a simplified and faster EU-wide permitting framework to address major delays in deploying energy infrastructure. Streamlined procedures, including digitalisation, single contact point, tacit approval, among others, would apply to grid projects, renewable energy installations, co-located or standalone storage, and charging infrastructure.
To improve public participation and benefit sharing, renewable energy projects above 10 MW will be required to provide direct or indirect benefits to local communities. Member States must also appoint and fund an independent facilitator to support dialogue between developers and communities. In addition, the Commission will introduce a Public Engagement Toolbox in Q1 2026 to help address public acceptance challenges, enhance citizen and local authority capacity, and share good practices on engagement and benefit-sharing.
The proposal also harmonises permitting for hydrogen infrastructure with the accelerated procedures used for electricity and renewables, adding digital tools, tacit approval mechanisms, and firm deadlines for information requests by authorities.
- Guidance on grid connections:
The guidance aims to help Member states to accelerate grid connections through better planning, transparency, and digitalisation. The Commission will foster dialogue among TSOs, DSOs, and NRAs to share best practices and ensure fair access. Member States should also create working groups to reflect user needs and link lead times with network development, while NRAs should enable anticipatory investment and pooled resources. System operators must align development plans with capacity hosting maps. Transparency measures include updating capacity hosting maps, creating a national platform, and introducing locational charges and dynamic tariffs. National regulators should incentivise system operators to use flexibility, storage, and grid-enhancing technologies, while monitoring and reallocating unused capacity. Flexible connection agreements should be remunerated with, for example, a reduction in the network tariff. Connection procedures should be digitalised, with clear entry criteria, milestones, reservation fees, real-time queue updates, and penalties for delays. Hybridisation and flexible agreements should be allowed, and prioritisation frameworks based on climate and social value adopted.
- Guidance on the design of Contracts-for-Difference:
Together with the grids package, the European Commission published its guidance on the design of two-way contracts for difference (CfDs). The aim of this guidance is to ensure that future CfD designs comply with the criteria set out in the EU legislative framework (the Renewable Energy Directive and the Electricity Market Design) while continuing to support investment in new clean generation capacity, including nuclear and renewables. The guidance is non-binding and does not provide an exhaustive overview of all possible design features that could be compatible with EU legislation.
The Commission assesses CfD designs across four key parameters: market responsiveness, efficient maintenance decisions, effective participation in forward electricity markets, and maximising the value of investments for the electricity system and consumers.
Overall, the guidance contains positive elements for solar PV, such as opening de-risking clauses for negative prices, considering hybridisation with batteries, and preserving investment security. The guidance also introduces several complex concepts, particularly on combining CfDs with forward markets or Power Purchase Agreements (PPAs), and the integration of locational investment signals through CfD design. Members of SolarPower Europe will receive a more detailed analysis in the coming days.
