Growing demand puts EU electricity grid under pressure

Europe’s power grid is under pressure, faced with growing demand from electric vehicles and heat pumps as well as lagging investments in new infrastructure. Is a blackout imminent?

Klaus Müller, the president of Germany’s Federal Network Agency – the Bundesnetzagentur – is a worried man.

“If many new heat pumps and charging stations continue to be installed, then overload problems and local power cuts in the distribution grid are to be feared,” Müller told FAS on Sunday (15 January).

Earlier that day, the grid operator in Southern Germany, TransnetBW, launched an appeal on citizens to reduce their energy consumption during the evening in order to avoid a blackout.

“Help us out!” the company said in a message posted on social media. 

As Russian gas flows to Europe near zero, Germany is speeding up the deployment of clean energy alternatives – new wind farms, rooftop solar panels, and heat pumps – which have seen demand booming over the past months. 

European EV sales were up 27% in November 2022 compared to the previous year. And the same goes for heat pumps, which grew at a rate of more than 20%, after a strong 2021 with 34% growth, said Thomas Nowak, secretary-general of the European heat pump association (EHPA).

Altogether, this is adding pressure to the country’s electricity grid.

“The grid faces three main challenges: integrating heat pumps, electric vehicle charging and the increasingly decentralised production of electricity,” says Bram Claeys, a senior associate at the Regulatory Assistance Project (RAP), a clean energy think-tank. 

Germany is not alone having issues with its power grid. 

In 2022, the electricity grid in the South of the Netherlands experienced some difficulties with balancing demand and integrating new sources of energy, which both exceeded the grid’s administrative capacity, says Jaap Burger, a senior expert at RAP.

Power infrastructures are complex systems. Because electricity cannot be stored at scale, demand and supply need to be kept in balance at all times, otherwise the grid collapses.

But as power generation becomes more decentralised and intermittent due to the deployment of renewables, ensuring there is enough capacity to meet demand is becoming increasingly challenging.

With the winter approaching last year, EU countries agreed on new emergency measures to tackle the energy crisis, including a mandatory target to reduce electricity consumption by 5% at peak hours.

Across Europe, people were told to limit their consumption to prevent the grid from collapsing. In Finland, motorists were urged to avoid heating their cars in the morning. And British consumers were requested to lower their electricity consumption between 16.00 and 19.00 pm.

Power grid flexibility vital to 'avoid blackouts', EU's Sefcovic says

Batteries and hydrogen can provide the necessary flexibility for Europe’s electricity grid to avoid blackouts in an energy system increasingly dominated by intermittent wind and solar, said Maroš Šefčovič, the European Commission vice-president in charge of foresight.

Under pressure

As European consumers buy more heat pumps and EVs, can electricity grids keep up?

In the Netherlands last year, grid operators were caught by surprise. Due to much quicker than forecasted electrification in industry and transport, the grid operator in the South of the country soon became overwhelmed with demand, RAP’s Burger said.

The administrative bottleneck caused significant delays for larger new installations. This, in turn, “sparked something of a gold rush” as developers began flooding the distribution grid operator with requests, which worsened the situation.

As a result, companies wanting to install large industrial heat pumps or fast-charging infrastructure for cars were forced to wait for months, to prevent overburdening the grid.

In Germany, local low voltage lines are especially at risk of running short of transmission capacity.

Grid agency chief Müller is expected to enact an electricity rationing scheme as of 1 January 2024. The scheme will specifically target EV charging stations and heat pumps, although a minimum supply will be guaranteed.

“We’re still in a situation where we significantly need to ramp up the investment in modernisation and increased resilience in the distribution grids,” explains Kristian Ruby, the secretary-general of Eurelectric, the European power industry association.

However, investments in new infrastructure are lagging behind.

“We saw a 10% increase in investments in distribution grids between 2020 and 2021,” Ruby told EURACTIV. “What we should have seen would have been a 40% increase,” he stressed.

In early 2021, Eurelectric estimated that making the grid fit for the new age of electrification would require €375-425 billion in investments. 

But that estimate probably needs to be revised. Electrical equipment “has become more expensive” while “the climate challenge has proven more immediate and is triggering more need for resilience investments,” Ruby noted.

While Russia’s war in Ukraine “commanded a significant increase in ambition” on renewables deployment and electrification, “the increase in grid investments is really the missing piece here,” he continued. 

As Europe’s renewable energy targets keep being increased, related investments in power grids “tend to be overlooked” despite the fact that for every euro invested in renewables, 50 cents should go towards grid reinforcement, Ruby warned.

Europe's electricity industry calls for €400bn investment in distribution grids

Jean-Bernard Lévy, the chairman and CEO of French utility EDF and current president of power industry association Eurelectric, has urged EU countries to invest in distribution grids in order to sustain Europe’s move towards climate neutrality.

‘No risk’ of imminent collapse

Is a collapse imminent? “No, there is no such risk,” says Andreas Jahn, a senior associate at RAP.

However, “certain regions are more burdened than others,” he conceded, saying this could lead to regional bottlenecks and grid congestion in the medium term if grid investments continue lagging behind.

Nowak, the heat pump industry representative, admitted that there could be “some hiccups as a result of the very strong increase in heat pumps and the supply shortages in grid infrastructure.”

For some heat pump makers, talk of electricity rationing are worrisome. 

“Consumers must be able to trust their choice in favour of a heat pump,” said Alix Chambris, vice-president of global public affairs at Viessmann, the German manufacturer of heating and refrigeration equipment. “When we’re asking millions of households to invest, we must create predictable framework conditions,” she said.

Not all is doom and gloom for Europe’s electrical grid, though. 

In the Netherlands, the 2022 grid strain incited a “broad coalition of stakeholders” to call for greater involvement from the state in driving forward grid reinforcements, says RAP’s Burger.

That resulted in a government action plan in December, which included “faster upgrading of the grid, smarter use of existing capacity and more incentives for flexible consumption,” he explains. 

For individual heating, hybrid heat pumps that can run on gas when electricity is scarce can also help balance seasonal demand peaks, says Viessmann’s Chambris.

Flexible electricity tariffs based on a “grid-serving approach” can also be used to avoid “everyone charging their electric vehicles and turning on the heat pump all at once,” Jahn notes for Germany.

Work on that front has already begun. Germany, a country that has long slept on smart grids, recently adopted a new law to boost the installation of smart meters and introduce flexible electricity tariffs for consumers.

In 2021, EU utilities co-signed a letter that promised that Europe’s grid could handle 50 million heat pumps. 

The letter was “still absolutely true and topical, even in the current context,” stressed a spokesperson for French energy giant EDF, one of the signatories. Other signatories communicated a similar position to EURACTIV.

Industry: European electricity grid can handle 50 million heat pumps

Electric heat pumps can be deployed on a large scale in Europe without jeopardising grid stability while allowing greater integration of renewable energy sources and improving energy efficiency in buildings, according to the CEOs of major energy groups, including Spain’s Iberdrola, Italy’s Enel and France’s EDF.

[Edited by Frédéric Simon]

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