Planning for tomorrow: making EU power system planning fit-for-purpose

Europe’s power system is transforming fast.

In the next fifteen years, electricity will grow from supplying 23% of Europe’s energy needs to around 50%, and from 71% clean power sources to about 95%. This puts enormous weight on getting power system planning right. 

Policymakers are aware of this – and that the current approach is falling short of what Europe needs to deliver on its energy and security goals. The European Grid Package – an upcoming file being worked on by the European Commission – will include proposals for how to improve the planning process. The EU must seize this opportunity to bring power system planning into the future.

The cost of siloed planning

As Europe’s system shifted from a limited number of large power plants serving national demand to a diverse mix of decentralised generators moving electricity across borders, it has gained resilience and security – but also complexity. 

Over time, the planning approach used by EU countries has grown into a patchwork of overlapping processes to cover these changes, with each catering to different parts of the power system – generation, grids, flexibility and so on. The framework is now juggling multiple moving parts – but without bringing them together to coordinate the development of a coherent system. 

The overarching goal of planning is to identify what actions need to be taken to ensure countries will meet their electricity demand at any hour of the year. There are many ways to do this – and the problem is that individual planning processes, detached from each other, cannot provide a single, aligned vision of the best way to get there. 

This is best illustrated through an example: integrating 10 GW of new wind and solar in the northeast of a country. This challenge could be met in several ways – building new transmission lines, extending the lifetime of nearby gas turbines, adding flexibility through demand-side response or battery storage, or a combination of all three. Only an integrated assessment can identify which mix of actions is the most cost-effective option.

But today, each element of the power system is planned by different actors – TSOs, utilities, local authorities and retailers – producing results that are rarely reconciled. Even where long-term models optimise technology portfolios, emerging solutions such as battery value stacking or flexible demand are not always fully captured. This fragmentation can create inconsistent investment signals and the risk of misallocating resources.

Different starting points means results will point in different directions

Simply stitching the planning processes together at the end will not fix the fragmentation. Each exercise is built on different models and different assumptions. If the inputs don’t match, the outputs will never line up. The result is a set of plans that look connected on paper but are misaligned in practice.

Although all processes have the same starting point – the national scenarios underpinning the National Energy and Climate Plans (NECPs) – they diverge quickly. Planners need to make a lot of assumptions themselves to turn NECPs into the detailed data that is needed for grid modelling – particularly when many NECPs still lack data on key energy metrics. Since each process is handled by separate entities, or different teams within the same entity, the assumptions and modelling software used are always different. 

The result is a set of outputs that are no longer aligned, compromising the validity of the planning processes. For example, if a national TSO preparing its network plan assumes commodity prices will fall over the next ten years, but the European Network of Transmission System Operators (ENTSO-E) assumes they will rise when undertaking its European assessment of interconnection needs, the two exercises will be catering for very different futures. This risks sending inconsistent and unreliable signals to investors, regulators, or policymakers. 

Why timing matters

Planning processes run on different schedules, making them harder to align. NECPs are updated every five years, national network development plans every two, and capacity assessments every year. These mismatched cycles force planners to fill the gaps with additional assumptions while waiting for the next update from other processes. The result is that no part of the planning cycle is ever fully based on what is happening in the rest of the system, so outputs risk pointing in different directions.

Planning for yesterday rather than tomorrow

The policy cycle itself, from setting an EU target to defining national objectives, takes years. For example, the Fit for 55 package was proposed in July 2021, but the revised NECPs reflecting its higher ambition were only published in June 2024 – three years later.

This lag means planning carried out in the meantime was based on outdated, less ambitious scenarios, producing outputs that were obsolete from the start. Ember’s analysis shows how serious this gap can be: in 2024, 11 of 26 national network plans were out of step with national wind and solar targets. This means the planned future grids would fall short of supporting the renewable capacity envisioned by current policies. The same is true for assumptions around demand growth, electrification, flexibility deployment, or even GDP and demographics.

This disconnect doesn’t just slow down the energy transition. It also weakens wider goals like industrial policy, energy security, and resilience. No country can deliver on its commitments if the planning assumptions don’t match its own political commitments.

A smarter way forward

Momentum for planning reform is already building in Europe. The UK recently overhauled its framework, moving to an integrated approach that covers multiple energy vectors, with the goal of providing independent advice on how to plan and run the entire energy system. It stands as a best-practice example of how planning can be comprehensive and coherent. 

The European Grid Package presents a similar opportunity to streamline, align and integrate planning processes. This means:

• Combine assessments where possible. For example, flexibility is planned separately from assessing how much capacity is needed to meet peak demand – even though flexibility technologies like batteries can provide exactly that service.
• Create a centralised, transparent database at national level for harmonisation of inputs and assumptions. This would be in a standardised and accessible format to enable aggregation at EU level. Regular updates should be encouraged to reflect policy shifts and external developments.
• Strengthen links between processes and integrate where possible – including across energy carriers. The UK’s Strategic Spatial Energy Planning provides a concrete example of how this can be accomplished.  

The ultimate aim must be a single, coherent view of Europe’s power system. Only by planning the system as a whole can policymakers identify the most cost-effective pathway to a clean, resilient, and affordable future.

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Acknowledgement

With thanks to Pawel Czyzak, Alison Candlin, Rini Sucahyo, Reynaldo Dizon and Claire Kaelin for their contributions. 

Image credit: Mykola Pokhodzhay / Getty Images

About Ember

Ember is an independent, not-for-profit energy think tank that aims to shift the world to clean electricity using data. It gathers, curates and analyses data on the global power sector and its impact on the climate, using cutting edge technologies and making data and research as open as possible. It uses data-driven insights to shift the conversation towards high impact policies and empower other advocates to do the same. Founded in 2008 as Sandbag, it formerly focused on analysing, monitoring and reforming the EU carbon market, before rebranding as Ember in 2020. Its team of electricity analysts and other support staff are based around the world in the EU, UK, Türkiye, India, China and Indonesia.