Europe Is Not Short of Grid. It Is Short of Queue Discipline.

Two proposals that need co-decision, two guidance documents that do not

The European Commission presented the European Grids Package on 10 December 2025 under the reference COM/2025/1005. It is not one instrument. It is four, and the distinction between them decides when anything actually changes.

The first is a proposal to repeal and replace the Trans-European Networks for Energy Regulation, which would also amend the ACER, Electricity, and Gas and Hydrogen Regulations. The second is a proposal for a Directive to accelerate permit granting, amending the Renewable Energy Directive, the Electricity Market Design rules and the Gas Directive. Both are legislative, so both now move through the European Parliament and the Council of the EU. Cyprus, holding the Council presidency, has said it will prioritise the file, and a senior Commission official has indicated agreement is expected toward the end of 2026 or early 2027.

The third and fourth documents are Commission guidance, addressed to member states: guidance on efficient grid connections (C/2025/8473) and guidance on the design of two-way contracts for difference (C/2025/8479). Guidance is not binding, which is why it is easy to skip in a summary. It is also not waiting for anyone. A national regulator that wants to move on connection queues can act on it now, and several are under enough pressure to do exactly that.

A third guidance document on anticipatory investment, presented on 2 June 2025, sits behind the package and deals with the harder question of letting network operators build ahead of demonstrated demand. Together the set is best read as an attempt to attack the same bottleneck from the planning end, the permitting end, the connection end and the financing end at once.

Project 54Technicians working beside a pipe rack with transmission lines behind them. Under the Commission connection guidance, the evidence that a project is ready to connect is largely produced by its suppliers.

A queue position stops being a right and becomes a conditional claim

For most of the last decade a European grid connection request behaved like a ticket. You applied, you joined a line, you waited, and your position was essentially a function of when you applied. That is tolerable when the line is short. It is destructive when the line is longer than the network will ever be able to serve, because the queue stops sorting projects by quality and starts sorting them by the administrative reflexes of whoever filed first.

The numbers say the line is far past that point. Beyond Fossil Fuels estimated that about 1,700 GW of renewable projects were stuck in queues across 16 countries in 2024, a figure more than six times Germany's entire installed generation capacity as of December 2025. The Commission's own material notes queues in at least 16 EU countries as of mid 2026. Ember puts roughly 120 GW of mature renewable projects, plus 1.5 million household installations, at risk of not getting timely grid access by 2030.

The connection guidance attacks this directly. It recommends allocating capacity on a first ready, first served basis rather than first come, first served. It recommends transparent maturity criteria so that readiness is assessed against published tests rather than case by case judgement. It recommends project development milestones with penalties for non-compliance, reservation fees that make holding a position expensive, and regular monitoring and cleaning of the queue so that dormant requests are removed.

Read that list as a supplier rather than as a developer. Every one of those measures asks a project sponsor to produce evidence, on a schedule, that its project will physically exist. Evidence of that kind is almost never generated inside the developer. It is generated by the people who will build, supply and commission the thing: the equipment vendor with a factory slot, the contractor with mobilised crews, the engineering firm with a grid code compliance study, the connection asset owner with an energisation date.

The practical shift is that a supplier's delivery commitment acquires a second buyer. The first buyer is the project, which wants the equipment. The second is the regulator, which wants the proof. A quotation that satisfies only the first is now worth measurably less than one that satisfies both.

It removes a step rather than speeding one up, which is a different kind of reform

ENTSO-E reports that more than half of the transmission projects needed by 2030 are still awaiting permits. That is not a backlog that can be cleared by working harder inside the existing process, because the remaining time to 2030 is shorter than the historical permitting cycle for a large transmission line in most member states.

The proposed Directive therefore does something more aggressive than streamlining. It would allow governments to exempt grid, storage and repowering projects from environmental impact assessment. That is a real transfer of risk, and it is the provision most likely to attract legal challenge and political resistance during the Parliament and Council stage. It is also the one that most changes project timelines if it survives.

There is a second-order effect worth naming. If permitting genuinely accelerates while manufacturing capacity does not, the binding constraint moves from paperwork to hardware. Andreas Schierenbeck, chief executive of Hitachi Energy, told S&P Global Commodity Insights in an interview published on 5 January 2026 that large transformers currently carry waiting times of up to 40 months and that the gap between demand and supply is not really closing. He also welcomed the EU Grid Package and said he hoped it would bring faster permitting, and noted that the main European concern he hears from customers is regulatory uncertainty rather than energy supply.

Both statements can be true, and together they describe the trap. Europe is about to remove the constraint it controls and run harder into the one it does not. We looked at the supply side of that in our companion piece on Hitachi Energy and the capacity that is already sold, published the same day as this piece.

Treat the following as an estimate rather than a measurement: if permitting reform lands as drafted and equipment lead times stay where they are, a non-trivial share of projects that clear permitting in 2028 will find that the earliest credible energisation date is set by a transformer or switchgear slot booked years earlier. That is a scheduling problem that only suppliers can answer, which is precisely why it becomes a commercial advantage.

It is already being paid, in curtailment, in missed interconnection and in fragmented security of supply

Around 72 TWh of mostly renewable electricity was curtailed in 2024 because of grid bottlenecks, with curtailment costs and compensation reaching 8.9 billion euros on Aurora Energy Research figures. That is money paid for electricity that was never delivered, and it lands on bills.

On interconnection, Ember expects roughly 80 per cent of the EU power system to miss the 2030 target of import capacity equal to 15 per cent of installed generation. ACER puts the cost of fragmented security of supply at almost 11 billion euros in 2024. Five think tanks, in work associated with Agora Energiewende, estimate that a joint EU level scenario could require 505 GW less back-up capacity, with potential savings reaching 750 billion euros. ENTSO-E's Ten Year Network Development Plan found that additional interconnectors could cut costs and curtailment by 30 TWh a year by 2030.

The figure most often attached to European grids, 584 billion euros of investment, comes from the Commission's Grid Action Plan of November 2023, not from this package. It is useful as an order of magnitude and misleading as a headline for the Grids Package, which is mostly about allocation and process rather than about a new spending envelope.

Dan Jørgensen, the Commissioner for Energy and Housing, framed the package in terms of scale rather than cost, saying that Europe's energy transition demands that we think beyond national borders. Bernard Gustin, who heads the Elia group, put the operational case more bluntly: our rules were built for yesterday's system, and we must adapt them to today's challenges.

The condition of the asset base supports him. The EU network spans over 11 million kilometres, and around 40 per cent of distribution grids are more than 40 years old.

Eight named bottlenecks that acquire political cover, and therefore a different risk profile

The Energy Highways initiative singles out eight bottlenecks for EU level prioritisation, fast track support and permit streamlining. They are the Iberian Peninsula Pyrenean crossings 1 and 2, the Great Sea Interconnector between Cyprus and continental Europe, Harmony Link in the Baltic States, the TransBalkan Pipeline gas flow reversal, Bornholm Energy Island, a South East Europe cluster including storage, the SouthH2 Corridor running through Tunisia, Italy, Austria and Germany, and the Southwest hydrogen corridor from Portugal to Germany.

Naming a project at EU level does not build it. What it does is change the political cost of letting it stall, and that changes the risk profile for anyone deciding whether to hold capacity against it. A supplier choosing which of several possible 2029 projects to reserve factory capacity for now has a published, politically defended shortlist to weight that decision with.

Note the composition. Three of the eight are gas or hydrogen corridors, not electricity. The package is frequently described as an electricity grid reform and is not only that, which matters for vendors whose addressable scope sits in gas, hydrogen or conversion rather than in power transmission.

The Bornholm Energy Island agreement was reached on 26 January 2026, which is a useful tell: the list is not purely aspirational, and movement on individual projects is running ahead of the legislative file.

Sell a defensible date, not a competitive price

Start with the quotation. Under first ready, first served with maturity milestones, your customer's problem is not your price. It is whether your delivery commitment is good enough to survive scrutiny by a regulator who is looking for a reason to move someone else up the queue. A quotation that says lead time 24 to 36 months, subject to confirmation, is actively unhelpful to that customer. A quotation that names a reserved slot, a confirmed factory, an expiry date on the reservation and the conditions under which it is released is a different product, and can be priced as one.

Second, build the evidence pack as a deliverable. Grid code compliance documentation, type test certificates, factory acceptance test scheduling, interface drawings and a commissioning plan are things you probably already produce late in a project. Producing them early, in a form a developer can hand to a regulator, moves you from supplier to enabler and is very hard for a lower-priced competitor to replicate quickly.

Third, reprice optionality honestly. Reservation fees are coming into connection queues precisely because free options are being abused. The same logic applies to your own order book. If customers are holding your capacity with soft commitments while they wait for their own queue position to firm up, you are financing their option. Make that explicit, charge for it, and you will learn quickly which of your pipeline is real.

Fourth, follow the money that moved. The requirement for TSOs to allocate 25 per cent of congestion income to projects on the EU list creates a funding channel attached to a specific list of projects. If your scope is relevant to any of the eight Energy Highways, the buyer, the timetable and the funding mechanism are all now identifiable, which is rare enough in European infrastructure to be worth a dedicated account plan.

Fifth, change who you talk to. Queue management sits with transmission and distribution system operators and national regulators, not with the developer's procurement function. Suppliers whose commercial relationships are entirely with developers are a layer away from where the new rules are being written and applied.

Three ways the thesis fails

The first is dilution in co-decision. The legislative half has to survive the European Parliament and the Council. E3G, CAN Europe and BDEW have all warned against reopening existing legislation on the grounds that it could jeopardise an agreed consensus, ENTSO-E has raised concerns about the governance proposals, and some member states have signalled headwinds. A package that emerges with the centralised planning provisions softened and the environmental impact assessment exemptions removed would be a far weaker instrument.

The second is that guidance stays guidance. Nothing compels a national regulator to adopt first ready, first served. If only a handful of member states implement the connection recommendations, the effect is a patchwork, and a supplier building a pan-European evidence-led sales motion will find it lands in three markets and bounces in twelve.

The third is timing drift. Agreement toward the end of 2026 or early 2027 is an expectation voiced by a Commission official, not a commitment. European energy files have slipped before. A supplier that re-engineers its commercial model on the assumption of a 2027 entry into force, and is wrong by two years, will have spent money early on a proposition the market is not yet asking for.

There is a fourth, quieter risk that runs the other way. If permitting accelerates faster than manufacturing, the queue discipline reforms will simply relocate the bottleneck into equipment lead times, and the political pressure that is currently aimed at regulators will be aimed at vendors instead. That is an uncomfortable place to be discovered holding capacity you have already sold.

Four moves that cost little and position early

Audit your standard quotation for queue-readiness. Specifically, can a customer lift a delivery commitment out of it, unaltered, and put it in front of a regulator as evidence of maturity? If the answer is no, that is a document change, not a strategy change, and it can be done this quarter.

Map your pipeline against the eight Energy Highways and against the member states most likely to move early on the connection guidance. You are looking for the overlap between scope you can supply, projects with political cover and jurisdictions with regulators under acute queue pressure. That overlap is where evidence-led selling will work first.

Put a price on capacity reservation. Even a nominal, creditable fee changes customer behaviour and gives you a forecast you can trust. It also mirrors the reservation fee logic the Commission is now recommending be applied to connection queues, which makes it an easy conversation rather than an awkward one.

Open a relationship with at least one transmission or distribution system operator and one national regulator in your two largest markets, on a technical rather than a commercial footing. The rules about who gets connected and when are being drafted and applied there. Suppliers are almost entirely absent from those conversations, which is both the risk and the opening.