Grids First: Electrification Requires Infrastructure, Not Just Ambition

The European Union is pursuing three interlocking objectives: decarbonisation, energy security and competitiveness. Electrification is the common thread that ties them together, and grids are what make electrification possible.

Replacing imported fossil fuels with clean electricity can reduce emissions, strengthen Europe's energy sovereignty, improve resilience to geopolitical shocks and help maintain a competitive industrial base. As electrification accelerates across industry, transport and buildings, access to grid capacity is becoming one of the defining challenges for Europe's economic and energy transition. For large energy consumers, electrification is not a future ambition but an investment decision being made today across Europe's industrial base.

The European Commission's Electrification Action Plan, published on 17 July, is therefore a welcome recognition that grid access has become one of the principal constraints on industrial decarbonisation and economic growth. The Green Industrial Grids Association (GIGA) welcomes the Plan's ambition and its focus on accelerating electrification across industry, transport and buildings. The Action Plan also proposes a new indicative target of 46% electrification by 2040. The Commission intends to assess this target as part of the post-2030 Energy Union package. This ambitious target, which would see the current 23% electrification rate in Europe doubled by 2040, underlines the central role that electrification will play in achieving Europe's economic, industrial and climate objectives.

"Europe cannot electrify industry, transport and buildings without first ensuring they can connect to the grid. The Commission is right to recognise that infrastructure has become a strategic competitiveness issue, not just an energy policy issue," said Matt Ersin, Chair of GIGA.

Importantly, the Commission acknowledges several challenges that industry has highlighted repeatedly: grid connection delays, insufficient network capacity, the need for anticipatory investment and the importance of involving large electricity users in network planning.

The Plan also contains a number of positive measures. Its focus on industrial electrification, storage, flexibility, network modernisation and smarter planning reflects the reality that electrification is no longer a niche climate policy discussion. It is an industrial policy, competitiveness and energy security priority. GIGA also welcomes measures aimed at accelerating storage deployment, strengthening network digitalisation and improving coordination between electricity users and network operators, all of which can help unlock capacity more efficiently and support faster electrification.

The legislative proposal on network charges, adopted alongside the Electrification Action Plan to incentivise electrification, is another important step which can help to foster efficient grid operation and planning.

GIGA particularly welcomes the Commission's recognition that planning grids around future demand will be essential. Network operators are encouraged to engage earlier with industrial sites, data centres, charging infrastructure operators, ports and district heating providers. This is an important step towards a more proactive approach to infrastructure planning.

However, important gaps remain.

First, Europe needs a clear and harmonised "first-ready, first-out" framework for grid connections.

While the Action Plan recognises connection delays as a major barrier and references prioritisation frameworks, it does not establish a clear EU-wide "first-ready, first-out" principle for managing connection queues. Many of the detailed reforms on connection processes are instead being developed through the European Grids Package. As negotiations continue, GIGA believes a harmonised framework that prioritises mature, investment-ready projects will be essential to reduce delays and improve investment certainty. The Commission should establish a clear legal definition of "first-ready, first-out" through the European Grids Package or another legislative instrument to ensure a harmonised and enforceable connection prioritisation framework across all Member States.

Second, permitting reform must move from ambition to implementation.

The Action Plan rightly highlights the importance of faster permitting, but much of the detailed reform agenda remains linked to the European Grids Package and implementation by Member States. GIGA supports ongoing efforts to streamline permitting procedures and sees value in further strengthening measures such as single points of contact, simplified procedures and predictable decision timelines to accelerate electrification and grid infrastructure projects. The Commission should build on existing permitting reforms by pursuing greater harmonisation of procedures across Member States, including a genuine one-stop shop for permitting submissions, a single point of contact for developers and binding maximum decision timelines for strategically important electrification and grid infrastructure projects.

"Industrial companies are ready to electrify, but ambition alone will not drive investment. The business case depends on two things: access to grid capacity and access to electricity at globally competitive prices," said Pamela MacDougall, Vice Chair of GIGA.

Third, the economics of electrification need greater attention.

While grid access may be the most immediate barrier facing many projects, long-term investment decisions will ultimately depend on whether electricity can be supplied at globally competitive prices. Electrification will also struggle to scale if companies face significant connection and network costs when switching from fossil fuels to electricity. Europe must ensure that grid cost frameworks support, rather than penalise, industrial electrification, particularly where companies are converting existing industrial processes from fossil fuels to electricity. The Commission should establish the principle that grid costs must not discourage industrial electrification and work with Member States to promote cost-neutral connection frameworks for existing industrial facilities transitioning to electricity. Without a clear focus on both competitive power prices and cost-effective grid access, investment risks being delayed or redirected to regions with lower energy costs.

Fourth, flexibility must be market-based, technology-neutral and voluntary, and must support, not constrain, industrial electrification.

As electrification expands, flexibility will become increasingly important for balancing the system. Yet many energy-intensive industries have limited ability to adjust electricity consumption without affecting operations, safety or competitiveness. Flexibility can play an important role in integrating renewable energy and improving system efficiency, but it cannot become a substitute for sufficient grid investment. Future flexibility frameworks should support, rather than constrain, the scale of industrial electrification required for decarbonisation. Policies should prioritise market-based, technology-neutral, voluntary participation models that reflect industrial operational realities, not mandatory ones. Flexibility must remain a voluntary, market-based choice, not a precondition for grid access, so that industry can continue to electrify while adequate investment in grid infrastructure and system reliability keeps the energy transition affordable.

Fifth, Europe must accelerate grid digitalisation and deployment of grid-enhancing technologies.

Expanding and modernising Europe's networks will require significant investment, but building new infrastructure alone will not be enough. Europe must also maximise the efficiency and utilisation of the assets it already has. Digitalisation and grid-enhancing technologies can help unlock additional capacity more quickly, reduce congestion, improve system visibility and lower the overall cost of integrating growing electricity demand.

Digital technologies, including grid-enhancing technologies, smart metering, AI-enabled optimisation and digital twins, can increase network efficiency, unlock capacity more quickly and reduce the cost of integrating growing electricity demand. Fully harnessing these technologies will be essential if Europe is to electrify at scale while keeping infrastructure investment efficient and maintaining industrial competitiveness. To accelerate deployment, the Commission should require Member States to establish national targets for maximising grid efficiency through digital technologies and grid-enhancing technologies, provide guidance on effective incentive mechanisms and introduce transparent reporting arrangements to ensure delivery while supporting cost-competitive electricity supply.

Turning Ambition into Delivery

GIGA strongly welcomes the direction of travel set out in the Electrification Action Plan. The Commission has correctly identified many of the barriers that industrial electricity users face today, including grid access constraints, the need for anticipatory investment, electricity affordability, storage deployment, digitalisation and closer coordination between network operators and electricity consumers. The challenge now is implementation.

That requires a connection framework that rewards project readiness, permitting systems that match the pace of investment, electricity prices that support industrial competitiveness, market-based, technology-neutral and voluntary flexibility mechanisms that work with rather than against industrial operations, and greater use of digital and grid-enhancing technologies to maximise existing network capacity, alongside anticipatory investment to support future demand. Together, these measures can help ensure that Europe's grids become an enabler, rather than a bottleneck, to industrial electrification.

The Electrification Action Plan is an important step in the right direction, but electrification targets alone will not deliver Europe's objectives. Infrastructure must keep pace with ambition. GIGA stands ready to work with policymakers to help turn ambition into delivery and bring the practical experience of industrial electricity users into the implementation process.

If Europe wants to achieve its electrification ambitions and strengthen its industrial competitiveness, it must put grids first.