The energy transition to renewables will require significant investment in electricity grids.

A Deloitte report estimates that between 29 billion and 34 billion euros in investment is needed in electricity networks to achieve the environmental objectives set by the European Union.

With the fulfillment of the environmental objectives set by the European Union on the horizon, the report “The contribution of electricity networks to the energy transition“puts on the table the necessary investment toadapt the electrical gridbased on the criteria for renewable electricity generation.

The report was prepared by Deloitte together with the main Spanish transport and distribution network companies:

• Endesa Distribución.
• Iberdrola Electric Distribution.
• Union Fenosa Distribution.
• Cantabrian Hydroelectric.
• Viesgo Electric Distribution.
• REE.
• In addition to the sector associations ASEME and CIDE.

Investment needed to adapt the electrical networks

With the decarbonization of the economy as the goal, the report specifies that up to 35 GW of new power, associated with new renewable generation sources that would replace polluting generation, would require connection to an electrical grid adapted to future realities such as the electric car and its charging needs, or the management of the demand of millions of homes that could produce their own energy.

All of this is also contingent upon international electrical interconnection, as well as the connections between the Spanish mainland and island systems.

So, The study outlines the need to invest up to 34 billion euros in adapting the electricity grid towards an efficient model for the integration of renewable energies.For which it sets the time horizon at the year 2030.

Of this amount, approximately 15 billion would be allocated to modernizing and upgrading the electrical grid using new technologies. About half of that would be focused on the low-voltage network.

Furthermore, between 5 and 6 billion euros of the total investment would be allocated to the digitalization and automation of networks, smart grids. This would allow for cost reductions and the creation of a service better tailored to the user.

Electrical networks and quality employment

As a direct result of this investment in electricity networks, the report states that 40,000 jobs were created during the period 2018-2020. All of them are high-quality and require high qualifications.

Furthermore, domestic manufacturing of networking equipment, software, computer applications, and advanced communication systems would be significantly strengthened. It is estimated that95% of the investment would be captured by the domestic capital goods industry.

So much so that “The contribution of electricity networks to the energy transition“He cites the importance of electricity networks to the Spanish economy. Companies that contribute nearly 30% of the total Gross Value Added. And the 40% of jobs that the entire electricity sector provides to the state economy.”

Improved service and a reduction in your electricity bill

On the other hand, the report focuses on the benefits that users would receive from modernizing the electricity grid. It specifies that this investment would lead to a reduction in electricity bills, potentially reaching 35% by 2030, thanks in part to the elimination of the tariff deficit.

This would translate into an approximate 10% reduction in the network component of the tariff, always taking into account the investments to be made and the stated rate of return.

In global terms,The total cost of transporting and distributing electricity to the consumer’s home could be reduced by 30-35%.Going from a cost of €130 per MWh to €85-90 in 2030. A reduction to which we would have to add an improvement in the quality of supply thanks to efficient and intelligent electricity networks.

Downloadherethe full report