The EU is overhauling its energy system to bolster security of supply, lower prices and accelerate decarbonization. To support these efforts and to accelerate permitting procedures for grids, renewables, storage and recharging infrastructure, the European Commission recently published – among others – the European Grids Package and the “Energy Highways” initiative. The proposal will now be reviewed by the European Parliament and the Council under the ordinary legislative procedure.
Context and areas of focus
In December 2025, the European Commission presented the European Grids Package and the so-called Energy Highways initiative, that has been previously announced by President von der Leyen.
The European Grids Package mainly contains several proposed amendments to existing European regulations that have been adopted under the name Trans-European Networks for Energy (TEN-E), providing the legal framework for cross-border energy infrastructure. The aim of this package is to strengthen the infrastructure, as approximately half of cross-border electricity transmission capacity needs by 2030 (66 gigawatt) are currently not addressed (32 gigawatt of 66 gigawatt) and demand for electricity is expected to increase even further in the next years, according to the text of the proposal.
Furthermore, the idea of the proposal is to increase the electricity interconnectivity level, as several EU Member States are not expected to meet the 15% target by 2030.
The Commission’s proposals and plans can be structured into three key areas: (1) strengthening EU-wide cross-border infrastructure planning, (2) accelerating infrastructure development, with special focus on accelerating permitting, and (3) eight priority projects (the “Energy Highways” initiative).
Infrastructure planning
- The Commission emphasizes the need to establish an EU cross-border energy infrastructure planning network. In this context, the Commission plans to develop a central EU scenario within two years of the enactment of the European Grids Package, based on input from Member States and all relevant stakeholders.
- Building on this, the European Network of Transmission System Operators (ENTSO) and the European Network of Network Operators for Hydrogen (ENNOH) are supposed to identify the infrastructure needs.
- The Commission emphasizes to also consider non-wire solutions (such as dynamic line and transformer rating, advanced power flow control systems or digital twin platforms) or digital solutions.
- Where identified capacity needs remain unmet, a “gap filling process” (which includes relevant actors such as system operators and project promoters) should apply, directed at proposing projects addressing these needs.
Infrastructure development
The proposed revision of the TEN-E would add new infrastructure categories concerning electricity, hydrogen, electrolyser facilities and carbon dioxide (see Annex II) compared to the current TEN-E regulation with the aim of ensuring strengthened safety, security and efficiency of existing networks.
- The planned proposal also aims to facilitate investments with a cross-border impact. It foresees principles that national regulatory authorities must apply when allocating costs across borders. The proposed revision stipulates that if 10% or more of a project’s estimated benefits occur in a Member State, the EU member state concerned must take part in the cross-border cost allocation (CBCA) process. The CBCA is based on ex-ante cost-allocation agreements, whereas the possibility of ex-post adjustments exists under certain conditions. Pursuant to the planned proposal, multiple Projects of Common Interests (PCIs) and Projects of Mutual Interest (PMIs), which already benefit from faster planning and permit approvals and increased visibility to investors, may be bundled for the purpose of cost discussions on cost-sharing and the CBCA decisions by the concerned competent authorities.
- In terms of energy independence, the Grids Package includes integrating security considerations, among others through “resilience by design” for new infrastructure, security enhancements for existing infrastructure (through Connecting Europe Facility (CEF)-financing), and ownership transparency to avoid dependencies on unreliable foreign entities. In addition, the proposal earmarks a significant rise of the budget of Connecting Europe Facility for Energy (CEF-E), the EU funding program to support investments in building, rehabilitating or upgrading cross-border energy infrastructure from EUR 5.84 billion for 2021–2027 to EUR 29.91 billion for 2028–2034. Significant funding is also proposed to be deployed through the European Competitiveness Fund and the National and Regional Partnership Plans. Furthermore, the Commission announces that the Clean Energy Investment Strategy will “propose concrete actions to ensure […] private sector investment, including from institutional investors, as well as support from the [European Investment Bank]” (Communication European Grids Package, COM(2025) 1005, page 6).
- The Commission wants to simplify and accelerate permitting procedures. and announces to establish an EU level framework to simplify and accelerate permitting procedures. According to the Commission this applies to grid infrastructure, renewable energy projects, storage projects and recharging stations. The goal is limiting permitting processes to two years and to no more than three years for the most complex projects.
- The paper involves the proposal that certain electricity projects of common and mutual interest benefit from an automatic presumption of overriding interest and, when included in a National Development Plan subjected to a strategical environmental assessment, from assessments under the Environmental Impact Assessment Directive and the Habitats Directive (Article 7 of the proposal).
“Energy Highways” initiative
According to the Commission, the “Energy Highways” address the most urgent energy infrastructure needs. The idea behind these highways is to enhance energy security, reduce reliance on fossil fuels, integrate more renewables into the grid, promote electrification and decrease energy prices (Communication European Grids Package, COM(2025) 1005, page 7). The initiative focuses on eight corridors:
- Two Pyrenean Crossings (targeting 8 gigawatt total interconnection capacity between Spain and France by 2040)
- The Great Sea Interconnector (ending Cyprus’ isolation from European electricity grid and involving the world’s longest submarine power cable with a length of nearly 900 km)
- Harmony Link (interconnector between Lithuania and Poland, completing the full integration of the Baltic electricity markets)
- TransBalkan Pipeline (TBP) reverse flow (“enabling the maximized use of existing natural gas transmission capacity in the reverse direction, from South to North”)
- Bornholm Energy Island (hybrid offshore project)
- South-East EU Price Stability Corridor (aimed at improving “price stability and energy security in southeastern Europe, including through storage”)
- SouthH2 Corridor (the South hydrogen corridor – Tunisia, Italy, Austria and Germany)
- Southwest Hydrogen Corridor (Portugal, Spain, France, Germany)
What matters now and next steps
The above-mentioned proposed changes and priority areas provide investment opportunities for network operators, investors and developers and industrial consumers alike. Potential funding options and faster permitting can create a favorable environment for investors. Therefore, it is advisable to closely monitor the upcoming developments (e.g. the Parliament and Council discussions and decisions) to see to what extent the proposals will be adopted.
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