Advancing Europe’s grid performance: why Europe must digitalise its grids

“Europe accounts for 27% of global cleantech patents, showing our leadership in the grid-enhancing and clean energy technologies that will define a competitive net-zero economy. But innovation leadership will only matter if we can deploy these solutions at scale. With 40% of Europe’s grids over 40 years old, grid productivity is now a competitiveness imperative: by digitalising the network, we can unlock more capacity, flexibility and resilience from the infrastructure we already have.” 

Cecilia Bonefeld-Dahl, Director-General, DIGITALEUROPE 

“Digitisation is essential to unlocking the full performance of Europe’s electricity grids. The priority now is to accelerate deployment at scale and build the smart grids Europe urgently needs by addressing remaining regulatory bottlenecks and providing incentives for grid digitisation. Moving to a TOTEX approach will be essential to enable more efficient investment and incentivise digital innovation in grid management.”

Peter Weckesser, Chief Digital Officer at Schneider Electric and President of DIGITALEUROPE 

“Europe doesn’t just need more grid – it needs a smarter one, and it needs it now. This white paper shows how digitalisation can unlock grid capacity through increased grid productivity and why better aligned performance indicators, incentives and rules are key for Europe’s competitiveness. By smartening the electricity grid, we can deliver on affordability, sustainability and resilience.” 

Sabine Erlinghagen, CEO of Siemens Grid Software 

“For Europe, the digitalisation of grids is not just a technology upgrade — it is a strategic imperative for the energy transition. By harnessing data, intelligence, and predictive capabilities, Europe can build grids that are not only more resilient, efficient, and flexible, but also capable of integrating the complexity of a decarbonised energy system. As data becomes the operating system of the grid, digitalisation will be central to securing Europe’s competitiveness, sovereignty, and sustainable growth.” 

 Juha Pankakoski, Executive Vice President, Global Functions, Siemens Energy 

The Challenge: Europe’s grid problem is performance, besides expansion 

At a time of renewed geopolitical tensions in the Middle East and continued energy price volatility, Europe’s energy security, sustainability and competitiveness increasingly depend on strengthening its homegrown and electrified energy system. 

Three problems stand out:  

First, rising electricity demand is putting growing pressure on grids that rely on conservative ratings and security standards designed for rare peak scenarios. As a result, grids run at 50% load on average, leaving an estimated 30–40% of existing capacity unused.

Second, integrating clean energy has arguably become harder than generating it. Grid connection queues are growing rapidly. Around 1.7 TW of renewable capacity is currently waiting for grid access across Europe. This is three times what is needed to meet the 2030 national energy and climate plan targets.

Third, congestion-management costs in Europe, meaning the costs of keeping electricity networks balanced and avoiding grid overloads, are soaring due to weak visibility and limited flexibility. These costs reached €8.9 billion in 2024 and could exceed €26 billion by 2030.

The Opportunity: Digitalisation can unlock today’s capacity while grids catch up 

The good news is that many of these challenges can already be addressed with existing technology that can help Europe’s grids carry more electricity while new grid capacity is built. 

Grid-enhancing technologies can increase transmission line capacity from existing grids by 20% to 40%. Smart demand management and technologies like batteries can also reduce pressure during peak hours. 

Digital tools also strengthen resilience. They enable utilities detect faults in minutes instead of hours, reducing outages and preventing blackouts. Flexibility solutions are often proving both quick and cost-effective: over 50% of microgrid investment projects recover their investments in 5 to 10 years, while some solutions can optimise hardware investment needs by up to 45%.