Before passing the baton to Ireland, the EU’s Cypriot Presidency has reached an agreement among EU member states, taking key steps to deliver lower energy prices, boost the bloc’s resilience and push decarbonization.
EU energy ministers agreed on June 26 the European Council’s negotiating position on the European Grids Package, comprising a revision of the trans-European energy infrastructure (TEN-E) regulation and a permitting directive. The package aims to address the urgent need to modernize and expand Europe’s energy infrastructure in order to accelerate electrification and decarbonization.
Under the Irish presidency, the Council will initiate negotiations with the European Parliament, once the latter adopts its position. The aim is to reach a final agreement on the legislation as soon as possible in 2026.
The Council said in a press release that its position focuses on improving cross-border energy infrastructure planning, streamlining and accelerating permit-granting, and ensuring a more secure and resilient energy network.
“Today’s agreement paves the way for Europe’s electrification towards achieving climate neutrality,” Cyprus Minister for Energy, Commerce and Industry Michael Damianos said. “By fast-tracking permitting and enhancing interconnections – including ending energy isolation for member states – we are securing affordable, clean energy and bolstering energy security for all European citizens,” he added.
Improved cross-border infrastructure
The Council supports a common framework for network development planning across the electricity, hydrogen and gas sectors. This would involve a central scenario to be developed by the European Commission and based on input from member states and stakeholders, in order to identify and address long-term infrastructure gaps and bottlenecks.
The Council’s position clarifies that the central scenario will consider national energy and climate plans, regional specificities, and disparities in energy prices. It will be accompanied by sensitivity analyses conducted every two years to address market developments and pressing needs in energy infrastructure.
EU Member States agreed to reinvest a portion of unspent congestion income – funds from grid bottlenecks between different areas where electricity is traded, also known as bidding zones – into cross-border projects aimed at reducing congestion, in order to ensure their predictable funding.
According to the Council’s position, this rule does not apply to income from bidding zone borders within a country or funds collected before the regulation enters into force. A phased increase in the congestion income allocation is also introduced (five percentage points per year), starting at 10 percent as of January 1, 2028, until it reaches 25 percent by 2031. If not spent, such funds will be made available after eight years for member states to use them according to EU existing rules on the electricity market.
EU Energy and Housing Commissioner Dan Jørgensen said the decision that the Ministers made was extremely important noting that European states need far more grid capacity and energy storage than it is available today. “We have brought together governments (22 Member States have signed), storage developers and manufacturers, renewable energy developers and energy consuming industries, that have signed a paper that will spark the spread of storage technology and increase the capacity in the short and medium term which is desperately needed,” he said in his speech.
Stronger protection for critical infrastructure
Recognizing the increasing number of intentional disruptions (sabotage, physical or cyber-attacks), energy ministers established a new category of priority projects dedicated to security and resilience of the existing electricity infrastructure. This will enable funding for critical components for emergency repairs of electricity interconnectors.
Faster permitting for projects
Energy ministers endorsed the need for faster and more transparent permitting procedures, including the creation of digital portals for simplified applications and designating electricity and renewable energy projects as being of overriding public interest (unless proven otherwise), prioritizing their approval.
To further expedite the process, member states may decide that a lack of reply from authorities in intermediary steps of permit granting is deemed as tacit approval.
According to the EU Council, Member States will endeavor to avoid the exclusion of renewable energy development in large areas, to accelerate the rollout of renewables through a streamlined and simplified procedure.
The Council’s position also includes measures on citizens engagement in renewables projects, such as promoting dialogue through an independent facilitator and benefit-sharing to nearby local communities.
