IN Brief:
- ENTSO-E is calling for investable regulation, faster permitting, stronger supply chains, and improved connection management.
- Proposed incentives would recognise resilience, system stability, cybersecurity, and cross-border market integration.
- The intervention accompanies the European Commission’s electrification and electricity-bill proposals.
ENTSO-E has called for a broader assessment of electricity-network value as the European Union develops its Electrification Action Plan and proposed regulation on future-proof electricity bills.
Alongside risk-reflective returns and faster permitting, the organisation wants stronger equipment supply chains, improved access to flexibility, and more effective management of grid-connection queues. Its proposals would give greater regulatory recognition to security of supply, cross-border market integration, resilience, system stability, and cybersecurity.
Short-term cost efficiency would remain part of network regulation, although it would no longer dominate the assessment of expenditure whose benefits emerge over several decades. Transmission assets are often built before demand, renewable generation, or cross-border flows have fully developed, creating a mismatch between immediate utilisation and long-term system value.
ENTSO-E also supports transparent, non-discriminatory, and cost-reflective network charges, alongside wider smart-meter deployment and fair treatment of taxes and levies. More granular information on system conditions could allow demand, storage, and generation to respond to network availability, provided tariffs remain understandable and do not create conflicting incentives.
Four amendments have been proposed to the emerging European framework: investment returns capable of attracting sufficient capital, explicit incentives for wider system benefits, national flexibility within common European rules, and efficiency assessments suited to the circumstances of individual networks rather than a single benchmarking model.
Connection-queue reform forms another part of the proposal, as electricity demand from industrial electrification, data centres, electrolysers, heating, transport, and storage grows alongside renewable-generation applications. Capacity reserved by projects that are not ready to proceed can delay mature developments and distort the sequence of reinforcement.
Network value extends beyond annual utilisation
A transmission circuit may operate below its thermal rating during normal conditions while remaining essential during outages, maintenance, renewable peaks, or sudden changes in cross-border flow. Assessments based mainly on average loading can therefore undervalue redundancy, operational flexibility, and the ability to withstand credible failures without interrupting supply.
Equipment supporting voltage and stability presents a similar regulatory problem. Synchronous condensers, dynamic reactive-power systems, protection upgrades, wide-area monitoring, and advanced control platforms may carry no additional megawatt-hours, yet they allow networks to accommodate higher levels of converter-connected generation without sacrificing secure operation.
Cybersecurity expenditure is also difficult to express through conventional utilisation metrics. Segmentation, secure remote access, identity management, monitoring, asset inventories, and incident-response capability do not remove a visible transmission constraint, but they reduce the probability and consequence of operational disruption across increasingly connected infrastructure.
Supply-chain capacity has become a further limitation, with power transformers, high-voltage switchgear, converter equipment, submarine cable, overhead-line components, protection relays, and specialist engineering resources being ordered by projects throughout Europe. Long lead times can move commissioning dates even where finance and planning consent are already available.
Regulated returns consequently influence more than access to capital. They determine whether transmission operators can place sufficiently early equipment orders, maintain framework agreements, expand internal delivery teams, and reserve scarce manufacturing capacity before a connection requirement becomes critical.
National discretion remains necessary because European networks face markedly different combinations of risk. Some systems must integrate offshore wind at scale, while others require stronger cross-border transfer capability, replacement of ageing assets, reinforcement for industrial demand, or resilience against wildfire, flooding, heat, and severe winter conditions.
Common principles can support market integration without imposing uniform engineering solutions on networks with different topologies, generation mixes, demand patterns, and planning regimes. The proposed framework would retain European coordination while allowing national regulators and transmission operators to select investments suited to local system conditions.
Technical stability has already moved further into European policy, with new measures addressing forced oscillations across converter-connected generation and storage. As synchronous plant declines, poorly damped interactions between controls can spread beyond an individual asset and require coordinated modelling across several networks.
Higher transfer capacity must therefore be accompanied by protection, dynamic simulation, control coordination, reactive-power management, and dependable data exchange. Adding conductor capacity without strengthening those supporting functions can increase the volume exposed to a disturbance without improving the network’s ability to contain it.
Industrial plants, charging hubs, heating systems, storage sites, and renewable generators can remain underused while connection work is outstanding, yet premature reinforcement can transfer unnecessary cost to consumers where forecast demand does not materialise. Regulation must accommodate that uncertainty without forcing networks to wait until congestion and connection delays have become entrenched.
Anticipatory investment relies on credible demand evidence, transparent queue management, and regulatory oversight capable of distinguishing strategic reinforcement from speculative overbuilding. ENTSO-E’s proposals place resilience, stability, cybersecurity, and future capacity within that assessment, rather than treating them as secondary benefits after immediate cost comparisons have been completed.
