Make the most of existing grids rather than just waiting for new cables: our message to the EU on network charges

With the roll-out of renewables, transport electrification and the surge in data centres, more electricity is flowing into the grid across Europe. This means that Europe’s electricity grids are increasingly under pressure and in dire need of an upgrade.

This is why the European Commission’s has proposed to amend the Electricity Market Design Directive, aiming to improve how Europe’s electricity system is organised. As the European Parliament and Council debate their positions, Energy Cities is calling for a better use of the infrastructure we already have, alongside investment in new capacity.

Why it matters

Expanding the grid with new cables and transformers alone is too expensive and too slow. We also need to optimise the use of existing grids through greater flexibility, smarter tariffs and digitalisation. Failing to do so threatens the entire transition towards a secure, affordable and sustainable energy system for people and the economy. Energy Cities has repeatedly showcased how local stakeholders are essential in shaping this future system, flexible and fossil-free.

What the Commission proposes

• Network tariffs: charges that reflect the costs of an efficient operator, with time-of-use elements, a capacity component to reduce peak load and locational signals, plus more transparency and performance indicators for operators.
• Grid connection: where capacity is scarce, regulators may deter speculative requests, require project maturity and prioritise categories of users, including the public sector, households and SMEs. Flexible connections and non-wire solutions must also be applied.
• Smart meters: at least 50% of customers by end-2030 and 75% by end-2033.
• Electricity taxation: electricity may not be taxed at a higher rate than gas.

What we are asking for

1. Data centres must not pass their grid costs on to other users. Data centres need significant grid capacity and electricity that is sometimes far from where clean power is produced: in Italy, Milan hosts 68% of data centres while new renewables are mostly in the south. We ask to clarify that the connection and integration costs of large new loads must be fully reflected in the charges they pay and not passed on to households and SMEs.
2. Injection tariffs only after a cost-benefit analysis. If applied, they must aim to reduce re-dispatching and congestion. Otherwise, they risk harming renewable business models and raising electricity prices.
3. CAPEX and OPEX neutrality should be implemented. Tariffs should not unduly favour grid expansion over cheaper alternatives such as flexibility services, non-wire and digital solutions.
4. Local authorities must be integrated in cross-sectoral network planning. They control spatial planning, building permits and charging infrastructure concessions, and so shape demand and grid needs.

Read our full amendments here.