Trillions of euros will need to be invested on Europe's aging power system and lack of energy storage capacity in order to handle the growing demand for electricity and green energy production while preventing blackouts.
Spain and Portugal saw their worst blackout a week ago. Although authorities are looking into the cause, business organizations and analysts say infrastructure spending is crucial regardless of the results.
Half of the electricity lines in the European Union are more than 40 years old, and the majority of the system was built in the last century. Growing demand from data centers and electric vehicles, along with rising generation of low-carbon energy, necessitates a redesign of the grids, which also require digital protection to fend off cyberattacks.
While grid spending has hardly changed at about $300 billion annually, worldwide investment in renewables has nearly doubled since 2010. The International Energy Agency estimates that in order to pay for the required overhauls, the amount must increase by 2030 to more than $600 billion annually.
Spain has requested that European Union regulators and its own investigators look into the outage that occurred last Monday.
Red Electrica, the grid operator, stated that two distinct incidents were the cause of the significant power outage, albeit the fundamental problems are yet unknown.
It comes following a surge in the usage of renewable energy, particularly in Spain, as EU efforts to lessen reliance on fossil fuels were heightened by Russia's invasion of Ukraine in February 2022 and the ensuing interruption of gas and oil supply.
According to research from the think tank Ember, the proportion of renewable energy in the EU's power mix increased to 47 percent last year from 34 percent in 2019, while fossil fuels fell to 29 percent from 39 percent.
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Nuclear and coal will be phased out in Spain. In 2024, renewable energy accounted for 56 percent of Spain's power mix, a record high.