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Since embarking on a mission to decarbonize its energy system, the European Union (EU) has been spearheading a new wave of green and low-carbon energy projects to tilt the policy and investment landscape from fossil fuels to renewables and reach its net zero targets. The European Commission (EC) recently proposed 166 cross-border energy infrastructure projects to complete its energy system overhaul and achieve climate goals. These new projects entail grid upgrades and the buildout of more hydrogen, green electricity, and carbon capture, utilization, and storage (CCUS).
By adopting the list containing a total of 166 cross-order projects on November 28, the European Commission made another effort to turn the EU’s energy system in the direction of the European Green Deal and usher in a sustainable energy future. While spotlighting the focus on the cross-border energy infrastructure of the future, the list encompasses projects of common interest (PCI) within the EU territory and projects of mutual interest (PMIs), which connect the EU with other countries. These projects have the potential to not only double the European Union’s grid capacity by 2030 but also meet its 42.5% renewable energy target.
Kadri Simson, European Commission’s Energy Commissioner, commented: “We have turned the challenge of an energy crisis into an opportunity to accelerate the clean energy transition and deploy more home-grown renewable energy. We have put all the building in blocks in place to rapidly roll-out renewables and electrified demand: our ambitious targets for renewable energy; our political ambition for offshore renewables; our strategies for solar energy and for hydrogen; and our latest wind power package are just some examples. But with all this comes the need for infrastructure.”
Simson, who is convinced that Europe needs future-proof infrastructure to reach net zero, explains that the lion’s share of the 166 projects are related to electricity, grid projects, and hydrogen with half of these expected to modernize power networks and bring new energy storage facilities. Many of these are expected to be commissioned between 2027 and 2030. In addition, the list entails 12 offshore hybrid and radial projects in the North Sea, Baltic Sea, and the Atlantic.
For the European Commissioner for Energy, these projects hammer home the importance of electrification and offshore grid buildout as decarbonization tools for the EU’s energy sector. A new addition to this list is 65 hydrogen and electrolyzer projects, which Simson explains will enable “the export and transit flows of renewable hydrogen to neighboring member states and allow major industries to decarbonize and stay in the EU.”
Furthermore, the list comes with 14 CO2 network projects that are aligned with the EU’s goal to create a market for carbon capture and storage (CCS). Simson highlights a jump from the existing six cross-border CO2 network projects to 14, which will stretch geographically from the Baltic Sea over the North Sea to the Western and Eastern Mediterranean. The increase is in line with the EU’s target to deploy 50 million tons of CO2 storage capacity by 2030.
Denmark, France, Germany, Sweden, and the Netherlands have already taken steps to build closer CCS cooperation within the EU by signing a declaration that clinches CCUS’s role in the energy transition era, emphasizing the need to scale up CCUS both nationally and at the European level. The European Commission also designated two Danish CCS projects – Norne and Bifrost –as projects of common interest, giving them the status of particularly important infrastructure projects to the entire Europe and allowing them to seek financial support from the EU.
“The Commission will issue a strategy early next year, which will among other things, put forward a coordination mechanism to start planning for CO2 infrastructure. Finally, the new list is also a bridge to neighboring countries which share the same decarbonization vision as our Union. The ten projects of mutual interest will pave the way for electricity, hydrogen, and CO2 networks with Ukraine, the UK, Switzerland, Western Balkans, North African countries as well as Norway and Iceland,” added Simson.
Eni’s CCS project among 14 hand-picked by EC
According to Eni, the Ravenna CO2 storage hub, which the Italian oil major is developing in a JV with Snam, is set to play “a key role in the creation of a high-tech international value chain” in the decarbonization sector. The Callisto Mediterranean CO2 Network integrated CCS project, jointly proposed by the two JV players in collaboration with Air Liquide and anchored on the Ravenna CCS CO2 storage hub, has been selected by the European Commission to join the list of PCIs.
The project aims to develop a CCS value chain in southwestern Europe, focusing on the decarbonization of the Italian industrial areas, starting with those of Ravenna and Ferrara and the Fos-Marseille Hub in France. The Callisto project is led by Eni and Snam in Italy, and Air Liquide for the Fos-Marseille industrial cluster in France. Leveraging the large total storage capacity of the Ravenna CCS hub – estimated at more than 500 million tonnes – the project intends to develop the largest network in the Mediterranean for CO2 capture, transport, and storage by offering a decarbonization solution for hard-to-abate industries, acting as a reference for Southern Europe.
Eni underlines that admission to the PCI projects list will allow the project to be eligible for the Connecting Europe Facility Fund (CEF), aimed at obtaining non-reimbursable funding to support the studies and development of infrastructure for the reception, transport, and storage of CO2. The start-up of the Ravenna Phase 1 CCS project is scheduled for early 2024 with the injection for the purpose of permanent storage of 25,000 tonnes per year of CO2, captured from the oil major’s Casal Borsetti gas power plant.
On the other hand, the industrial development of Phase 2, which is slated to start by 2026, will achieve a storage capacity of 4 million tonnes per year by 2030 while further expansions could bring the volumes up to 16 million tonnes of CO2 per year.
Upping the electricity grid roll-out ante
The European Commission believes that interconnected and stable energy networks are the key to enabling the green transition. Due to this, an action plan has been proposed to ensure electricity grids will operate more efficiently while speeding up the roll-out. As the EU’s electricity consumption is forecasted to rise by around 60% between now and 2030, the EC claims that networks will be required to accommodate “a more digitalized, decentralized, and flexible system with millions of rooftop solar panels, heat pumps and local energy communities sharing their resources, more offshore renewables coming online, more electric vehicles to charge, and growing hydrogen production needs.”
“Europe will only ensure its energy security and deliver on its climate ambitions if our power infrastructure expands and evolves to be fit for a decarbonized energy system. Grids need to be an enabler, not a bottleneck in the clean energy transition. That way we can integrate the vast amounts of renewables, electric vehicles, heat pumps and electrolyzers that are needed to decarbonize our economy. Today’s action plan sets the scene, and I count on the support of all players in the sector to help turn the plan into concrete actions,” said Simson.
The electricity transmission and distribution grids, which represent the veins of the energy system, are seen as “the missing links of the clean energy transition,” by the EC, thus, the action plan identifies tailor-made actions to help unlock the needed investment to get these grids up to speed and fulfill the objective set in the REPowerEU plan to end imports of Russian fossil fuels, and the recently agreed target to reach a 42.5%, with an ambition for 45%, renewable energy share by 2030. Investments amounting to €584 billion are expected to be needed to upgrade grids, as 40% of the EU’s distribution grids are more than 40 years old, and cross-border transmission capacity is due to double by 2030.
Maroš Šefčovič, Executive Vice-President for European Green deal, Interinstitutional Relations and Foresight, stated: “Grids are the backbone of our energy system. Our action plan will ensure better support to infrastructure planning, development and operation, central steps to connect Europe’s growing renewable energy sources to the end-users that need them – from households to hydrogen producers. Through concerted efforts, we can develop more efficient, smarter and more integrated energy infrastructure, thereby making sure that we deliver the clean energy that we need to succeed in the green transition.”
Simson reveals that the EU plans to unlock over half a trillion euros in investments to address grid challenges since the energy transition cannot be unleashed in full without these investments in the expansion of the transmission and distribution networks to integrate vast amounts of green electricity. The European Commissioner for Energy underlines that grid bottlenecks are delaying the EU’s clean transition.
While pointing out that the Commission’s European Action Plan for Grids tackles this with 14 actions in seven different areas, Simson lists the seven areas, which focus on accelerating the implementation of projects of common and mutual interest; improving long-term transmission and distribution of network planning; enabling regulatory incentives through anticipatory investments and offshore cross-border cost sharing; creating smarter, more efficient networks and innovative technologies; improving access to private finance and EU funding for grid projects; making permitting faster; and strengthening grid supply chains.
“Over the past four years, we’ve come a long way, accelerating the clean energy transition faster than expected and going above and beyond on renewables. Having the right infrastructure in place is the last piece of the puzzle. And we need to get this right,” emphasized Simson while adding that this will enable the EU to get “a clean, affordable, and reliable” energy system.
Three hydrogen projects for Baltic Sea region on EC’s PCI list
Finland’s state-owned company and transmission system operator, Gasgrid, has welcomed the news about three hydrogen infrastructure development projects for the Baltic Sea region – Nordic Hydrogen Route, Nordic-Baltic Hydrogen Corridor, and Baltic Sea Hydrogen Collector – being included on the PCI list by the European Commission. The Finnish player promotes hydrogen projects and the development of international infrastructure collaboration in the Baltic Sea region together with eight other gas transmission system operators and two industrial enterprises operating in the region.
Sara Kärki, Senior Vice President, Hydrogen Development, from Gasgrid, noted: “We’re very proud of all three of our international hydrogen projects being included on the list and regarded as important at the EU level. Inclusion on the Commission’s projects of common interest list cannot be taken for granted. We’re pleased to see that Finland and the Baltic Sea region are regarded as such a key component of the European energy infrastructure.”
Gasgrid underscores that the next planning stages and routing plans of these projects will be refined when the processing of the PCI list of the European Parliament and the European Council has been completed. The Nordic-Baltic Hydrogen Corridor project examines the hydrogen infrastructure being built from Finland to Germany via Estonia, Latvia, Lithuania, and Poland while the Nordic Hydrogen Route project explores the hydrogen infrastructure between Finland and Sweden on the coast of the Baltic Sea. Last but not least, the Baltic Sea Hydrogen Collector project looks into the undersea hydrogen infrastructure that will connect Finland and Sweden to Central Europe.
“This is a major step towards the hydrogen economy. Pipeline infrastructure makes it possible to attract investments and new jobs to Finland. The realization of the investments will improve Finland’s energy self-sufficiency and security and, indirectly, generate well-being for the entire country through new high-value products and by enabling export industry growth. In addition, the construction of international hydrogen transmission connections expands the hydrogen market and creates new business opportunities in the various stages of the hydrogen value chains,” emphasized Kärki.
Finland’s government adopted a resolution in spring 2023, which outlines that the country is well placed to become a forerunner in the hydrogen economy, producing 10% of the EU’s green hydrogen. As a result, Gasgrid is supporting the implementation of this resolution with its national hydrogen projects.
“The development of the national hydrogen network is built on extensive stakeholder consultations. For example, we’ve explored the interest among industrial actors and project developers to join the national and international hydrogen network. We’ve also looked into the role of regions and municipalities in enabling the Finnish hydrogen economy. Based on these explorations and consultations, we will refine the hydrogen infrastructure project routing plans and continue project development,” concluded Kärki.
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