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

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

With the fulfillment of the environmental objectives set by the European Union on the horizon, the report “The contribution of electricity grids to the energy transition” puts on the table the investment needed to adapt the electricity grid based on electricity generation criteria renewable.

The report has been prepared by Deloitte in conjunction with the main Spanish transmission and distribution network companies:

• Endesa Distribución.
• Iberdrola Distribución Eléctrica.
• Unión Fenosa Distribución.
• Hidroeléctrica del Cantábrico.
• Viesgo Distribución Eléctrica.
• REE.
• In addition to the sector associations ASEME and CIDE.

Investment needed to adapt electricity grids

With the decarbonization of the economy as an objective, 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 electricity 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 this also subject to international electrical interconnection. In addition to the connections between the peninsula and the Spanish island systems.

Thus, the study sets out the need to invest up to 34 billion euros in adapting the electrical grid towards an efficient model with a view to the integration of renewable energies. For this purpose, it sets the time horizon at 2030.

Of this, around 15 billion would be allocated to the modernization and updating of electrical grids based on new technologies. Of which approximately half would focus on the low-voltage network.

In addition, between 5 and 6 billion euros of the total investment would be allocated to the digitalization and automation of networks, smart grids. This would reduce costs and create a service more tailored to the user.

Electrical networks and quality employment

As a direct consequence of this investment in electrical networks, the report sets the number of jobs created during the period 2018-2020 at 40,000. All of them high quality and qualified.

In addition, the national manufacture of network equipment, software, computer applications and advanced communication systems would be greatly strengthened. Since it is estimated that 95% of the investment would be monopolized by the national capital goods industry.

Such is the case that “The contribution of electrical networks to the energy transition” cites the importance of electrical networks for the Spanish economy. Companies that contribute around $30 of the total Gross Added Value. And 40% of the jobs that the entire electrical sector provides to the state economy.

Improved service and lower electricity bills

On the other hand, the report focuses on the benefits that the user would receive with the modernization of the electrical networks. Thus, it specifies that this commitment would result in a reduction in the electricity bill. Which could reach 35% in 2030 thanks, in part, to the disappearance of the tariff deficit.

That is why 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 expected rate of return.

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

Download here the full report