On June 26, 2026 in Luxembourg, the EU weakened its network plans for cross-border network expansion and cut the planned joint financing. The trigger was the resistance of several member states to access to national bottleneck revenues, particularly from Sweden. The compromise still calls for more central planning for power lines because renewable energies, data centers and electric cars place greater strain on the networks. However, financing remains crucial because old lines slow down the flow of electricity between regions and states. Consumers and industry therefore continue to face high network costs, regional price differences and delays in important connecting lines.
EU allows member states to retain more congestion income
The European Commission had originally intended to earmark 25 percent of unused congestion income for European infrastructure projects. However, energy ministers significantly watered down this requirement. Revenues generated at borders between domestic bidding zones remain exempt. Furthermore, the new levy will not take effect until 2028. Initially, ten percent of unused cross-border congestion income is to be allocated to EU projects; this share will rise gradually to 25 percent by 2031.
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Congestion revenues arise when transmission lines cannot transport sufficient electricity between price zones. This leads to price disparities, while grid operators generate additional income from the scarcity. Sweden recently generated 30.5 billion kronor in this way; consequently, Stockholm has vigorously defended these revenues. Energy Minister Ebba Busch hailed the compromise as a “major victory.”
Grid plans clash with aging infrastructure
However, the scaled-back grid plans highlight a central challenge of the European energy transition. While the EU is expanding wind and solar power capacity, the development of transmission lines, storage facilities, and control systems is lagging behind. This creates bottlenecks that drive up electricity prices and occasionally force power plants to curtail output. The Commission estimates that around €1.2 trillion in investment will be required for electricity grids by 2040. Distribution grids alone account for approximately €730 billion of this total, with significant additional costs required for transmission networks.
Cross-border grid expansion is a critical factor in determining whether electricity can truly flow freely within the internal market. Interconnectors are designed to transport surplus energy from one region to areas facing shortages. However, several projects are stalling due to financing issues, permitting hurdles, and national interests. This is particularly relevant for Germany, as imports are becoming increasingly important during periods of low wind generation. Without additional transmission lines, price spikes remain likely, while households and industry bear the cost of these bottlenecks through levies and grid charges.
Brussels Plans More, but Capitals Retain Control
However, the EU is gaining greater influence over planning. Going forward, the Commission is to develop a common scenario for cross-border energy infrastructure, incorporating national energy and climate plans, regional price disparities, and emerging consumption patterns. Additional analyses will be conducted every two years to assess whether market conditions have changed. Energy Commissioner Dan Jørgensen likened the current situation to a puzzle where 27 players are working without a shared picture.
Nevertheless, national capitals are securing significant control rights. National authorities are to review assumptions, data, and priorities; while this can prevent planning errors, it may also delay decisions. The package also includes provisions for faster digital permitting processes. In certain procedural steps, an authority’s silence may even be deemed as approval, provided a member state opts to apply this rule.
A new category addressing security and resilience has also been introduced. It aims to facilitate the financing of critical grid components, repairs, and protective measures. The importance of this aspect is growing as sabotage, cyberattacks, and extreme weather place increasing strain on power infrastructure. The grid plans are now moving into negotiations with the European Parliament. Only then will it become clear whether the EU can mobilize sufficient funding and momentum for cross-border grid expansion.
Author: Blackout News
Sources: Reuters (06.06.26) – European Concil (26.06.26) – Finnisch Goverment (25.06.26) – AOL (17.06.26) – Goverment Offices of Sweden (11.05.26)