For a complete energy transition, the electricity system needs more power lines, more digital hardware, smarter software and greater consumer flexibility. However, high capital requirements, a shortage of skilled workers, and complex regulations present a major challenge for grid expansion. Industry experts shared their experiences at the EM-Power Europe Conference 2025.
When it comes to the energy transition, decentralization is a much-discussed topic – but it is “more than a buzzword”, emphasized Luis Vale Cunha from European Technology & Innovation Platforms (ETIPs). Cunha is responsible for the Smart Networks for Energy Transition (SNET) initiative there. By the end of 2024, 338 gigawatts of photovoltaics had been installed in the European Union, and by 2030, this figure is expected to reach 816 gigawatts. In the face of this surge in decentralized generation, more “technical issues need to be addressed,” Cunha stressed.
High outputs fed into the grid from fluctuating sources have brought frequency and voltage stability into focus. So far, however, in most cases governments and the electricity industry have merely responded to shifts in the generation structure, instead of taking a strategic and proactive approach. Complicating matters further, noted the EU representative, are the “27 different realities” of the member states. For example, there are “at least 27 different specifications for smart meters.”
He added that the challenges facing market players lie in a lack of necessary investments, the regulatory framework conditions, frequently unreliable supply chains and a shortage of skilled workers. One key regulatory issue is how to manage the existing flexibility capacity, i.e., how to regulate who gets priority access: “We need to prioritize flexibility in the grid in favor of system operators, not distributors,” explained Cunha. Addressing all stakeholders across the various control points of the grid, he said: “We need to bring all responsible parties to the table.”
Following this call to action, grid operators and suppliers shared their practical experiences. Harri Salomäki from Elenia, Finland's second-largest distribution system operator, highlighted the scale of investment required for grid expansion. Following a winter storm in 2011 that left some regions without power for up to a week, the Finnish government passed a law stipulating that, by 2036, electricity outages must not exceed six hours in cities, and 36 hours in rural areas. This has required high investments in underground cables. In 2012, Elenia had laid only 23.1 percent of its power lines underground, but by 2024, this figure had risen to 65.1 percent. They aim to reach 90 percent by 2036.
However, these investments are driving up grid charges. In an effort to limit rising costs for electricity customers, the regulator has reduced the margins granted to grid operators, who are considered natural monopolists. The second major challenge is the long delivery times for grid components – for example, the wait time for a transformer to convert 110 kilovolts to 20 kilovolts is currently three years.
Mark Nigge-Uricher from Alliander, a Dutch grid operator, also underscored the immense efforts currently underway to transform the power grid: “We now need to expand grid infrastructure at a scale matching the total built in the past 100 years combined.” The great demand for additional grid capacity is already leading to more and more customers waiting for connections. A key part of the solution to these challenges lies in grid intelligence: by increasing flexibility, Alliander could reduce the necessary infrastructure investments by as much as one billion euros.
This potential is already being tapped by A Energie, a major power producer based in Kristiansand, Norway, whose portfolio – which includes hydropower generation and the operation of a power grid – has made significant strides in digitizing its infrastructure. Rune Hogga reported that A Energie has now achieved a 100 percent rollout of smart meters across its own grid.
As part of the “Euroflex” project, which will run until the end of 2026, grid operators are paying their customers to temporarily shut down electrical devices when the grid approaches capacity limits. This enables participating electricity customers to reduce their electricity bills. These transactions are carried out automatically via a shared trading platform. Early experience with the system has already offered some insights, explains Hogga. Chief among them: building a liquid market takes time. In principle, however, the market will need more flexibility in the future than is currently available. Furthermore, coordination between transmission and distribution system operators must be improved.
There is much untapped flexibility, though – especially when it comes to battery electric vehicles. According to Hogga, Norway now has one million electric cars, but the potential for feeding power back into the grid from car batteries (known as bidirectional charging or vehicle-to-grid, V2G) is not yet being utilized. In the Netherlands, Nigge-Ulricher of Alliander, V2G technology is also not yet available. As a first and more straightforward step, the country is already practicing smart charging, in which vehicles are charged according to the grid’s needs. However, Maddalena Pondini, sustainability expert at Siemens, pointed out that grid flexibility is not simply a question of quantity. “The location of flexibility is also important.”
The energy transition also brings with it the reversal of load flow – i.e., the return flow of electricity from the distribution system to the higher grid level, which would have been unthinkable in the former electricity system dominated by large-scale power plants. Operators have to respond to this change, but how they should do this depends heavily on the individual regional context, says Nigge-Uricher. One crucial tool for intelligent grid management is a digital twin, explained the Alliander manager. This allows real-time monitoring of the grid, as well as determining its limitations, searching for solutions and verifying them. The more accurate prediction of peaks within individual sections of the grid enables a more precise response. This comes under the headline of Grid as a Service.
One of the challenges for grid infrastructure operators today is having to anticipate the future technological requirements of their transformer stations. Nigge-Uricher feels that the fact that today’s power grid is all about modern technology could be instrumental in attracting the next generation of skilled workers.
One thing is clear: the grid transformation is well underway, and while challenges remain, viable solutions exist – requiring close cooperation between all players in the electricity sector. At the same time, some technologies still need to become established.
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