EU Commission Issues Guidance on Anticipatory Grid Investments to Support Future Energy Needs

The European Commission has released a comprehensive guidance document aimed at supporting anticipatory investments in electricity networks, aligning with the EU’s energy and climate goals. The move is expected to help transmission and distribution system operators (TSOs and DSOs), regulatory authorities, and member states prepare the grid for future demand while ensuring affordability and competitiveness.

The guidance, issued on Tuesday, builds on the 2023 EU Action Plan for Grids and the Action Plan for Affordable Energy. It addresses the significant funding needs projected for the sector—€730 billion for distribution and €477 billion for transmission by 2040—and outlines a framework to encourage forward-looking infrastructure planning.

Anticipatory investments refer to network upgrades that go beyond current connection requests, focusing instead on medium- to long-term capacity needs. These include projects such as grid reinforcements, preparatory substation works, and the installation of spare cable ducts to accommodate future growth—particularly in renewable energy acceleration zones and offshore development areas.

The Commission’s guidance outlines concrete recommendations across three main areas: network planning, regulatory scrutiny, and cost and incentive structures.

Forward-Looking Network Planning
The document calls for planning based on robust future demand and generation scenarios, consistent with National Energy and Climate Plans. It recommends longer planning horizons and early stakeholder engagement to ensure future needs are incorporated effectively. It also emphasizes the importance of equipping national regulators with sufficient resources to assess development plans, especially at the distribution level.

Streamlined Regulatory Oversight
The guidance suggests adopting a two-step approval process—first for design and permitting, then for construction—to help accelerate grid expansion while controlling risks and costs. It further stresses the importance of maintaining a stable regulatory environment, noting that once approved, investment returns should not be retroactively challenged, even if initial asset utilization is lower than expected.

Tariff Design and Public Support Mechanisms
To support anticipatory projects, the Commission recommends that network tariffs and connection charges reflect not just current capacity but also planned future investments. This could encourage new generation and demand to locate where grid capacity is being expanded. The guidance also allows for the possible use of state guarantees or public funds—provided these are in line with EU regulatory and state aid rules—to cover additional costs tied to decarbonisation and market integration.

EU countries and national regulatory authorities are encouraged to incorporate this guidance into national frameworks covering network planning, tariff structures, and investment approval processes. The European Commission also announced that a European Grids Package will be introduced by the end of 2025 to further strengthen planning practices. A public consultation on the package is currently open and will run until August 5, 2025

The new guidance is expected to play a critical role in future-proofing Europe’s power systems while supporting the continent’s transition to a low-carbon economy.