Image credit: Plexigrid
Europe needs a ‘grid deal’ as a coordinated effort to make the distribution grid flexible, data-driven and dynamic in order to deliver the Green Deal.
The demand for electricity is surging at an unprecedented rate, driven by the shift from fossil fuels to electrification and the rapid integration of renewable energy sources. This transformation is fundamentally reshaping the once-centralised, predictable energy landscape, with distribution grids now facing growing complexity as they adapt to these changes.
As the share of variable renewables such as solar PV and wind grows, power systems must become more flexible to handle rapid changes in output. The recent blackout in Spain highlighted the risks when grids lack sufficient flexibility and resilience to absorb sudden disturbances. According to the European Environment Agency (EEA) and ACER, Europe’s need for system flexibility will double between 2022 and 2030.
To complete the energy transition, Europe must succeed in managing the grid transition first. From a ‘Grid 1.0’ architecture built around fossil-fuelled, centralised, dispatchable supply designed to serve inelastic demand, to a ‘Grid 2.0’ architecture powered by renewables, distributed and intermittent supply, combined with storage and intelligent demand flexibility.
This represents the most significant re-regulation and control system transition in over a century, comparable to the telecom shift from analog to GSM, 3G, 4G and 5G. For Europe, it is also a strategic accelerant: a pathway to move from abundant renewable production to efficient renewable consumption, building the infrastructure for a competitive clean economy and reclaiming energy independence.
While investment in renewables has been increasing rapidly, nearly doubling since 2010, global investment in grids has barely changed, remaining static at around $300 billion per year. According to the International Energy Agency, grid investment needs to nearly double by 2030 to over $600 billion per year after over a decade of stagnation at the global level, with emphasis on digitalising and modernising distribution grids.
It’s no longer going to be solely about bringing money towards the energy transition but how smartly do we allocate it.
Europe needs a grid deal
The grid is the transmission chain of the Green Deal. Without a modern distribution network, electrification, decarbonisation and affordability will stall.
EU Directive 944/2019 gave Europeans the right to flexible contracts and recognised new market actors. The 2024 Electricity Market Design reform reinforced this, but without a grid deal as a coordinated effort to make the distribution grid flexible, data-driven and dynamic, the Green Deal cannot be delivered.
TSOs already operate with visibility, automation, and flexibility markets, achieving 35–40% utilisation. On average distribution grids in Europe operate below 10% of capacity. These are the same areas where EVs, rooftop solar, heat pumps and batteries connect.
Flex-grid technologies can reverse this. By using digitalisation, smart meters and real-time data analytics, grid operators can actively manage the network with tools like conditional connections, dynamic tariffs and flexible load integration. This smooths demand peaks and troughs, reducing the need for additional infrastructure.
Three core capabilities of the Grid 2.0
- End-to-end grid visibility:
Distribution grid operators manage critical information scattered across multiple systems. The GIS maps the location and characteristics of tens of thousands of kilometres of cables, while ERP systems contain asset and economic data. SCADA systems provide visibility down to 20kV but not below, where feeders power streets and households. Next-gen grid management technology is bringing all this information together in real time, offering the most complete visualisation of a distribution grid to date. - Real-time grid analytics:
Without low voltage visibility, operators rely on millions of protective devices – fuses, switches and relays – to prevent overloads and over-dimension networks, often adding 100% or more capacity. Through real-time analytics across low voltage networks, DSOs are able to detect overloads, bottlenecks, imbalances and other constraints. This allows operators to manage grids efficiently and prevent issues before they occur. - Flexibility management:
Rooftop solar and EV chargers create fluctuating generation and consumption, causing temporary over-voltages and overloads. Using AI forecasting, DSOs are able to identify constraints and resolve them through market mechanisms or direct control signals, keeping the grid stable and efficient amid rapidly changing energy demand.
About the author
Alberto Méndez Rebollo, CEO of Plexigrid, brings 20+ years of leadership at Vattenfall and Siemens Gamesa, driving digital grid innovation to enable a flexible, sustainable and cost-efficient energy transition.
About the company
Plexigrid is a technology provider that develops software to optimize the planning and operation of electricity grids at the distribution level. Plexigrid’s solutions increase grid utilisation and free up capacity by using demand flexibility to integrate more renewable energy, charging infrastructure, heat pumps and energy storage. Website: https://plexigrid.com/overview/
