
Grid evolution– from traditional networks to smart, sustainable systems
Empowering tomorrow with intelligent energy networks
Intelligent, interconnected energy networks are the backbone of a successful energy transition, enabling the integration and management of renewable energy sources. As electricity, gas, and heating grids evolve to meet growing demands, they face unprecedented challenges in digitalisation and standardisation. Addressing these complexities is crucial to supporting the decentralisation and electrification of energy, ensuring a reliable and efficient delivery of clean energy. By leveraging advanced technologies and fostering collaborative efforts, energy networks can play a pivotal role in achieving a sustainable future.
Current situation and challenges faced
Energy networks represent the backbone of our societies and have a variety of tasks. A basic distinction must be made between electricity, gas and heating grids. All three of these network types can be divided into those that supply a relatively large number of consumers within a small radius (e.g. electricity and gas distribution networks, local heating networks) or those that transport electricity, gas or heat over a greater distance (e.g. electricity and gas transmission networks, district heating networks). In addition, our societies will increasingly need additional networks for by-products generated during energy production or energy use, such as carbon dioxide. The interaction of all these infrastructures will make it possible to ensure the expansion of renewable generation, the management of volatile feed-in and the supply of CO2- free energy to industries and households.
Electricity grids are facing an enormous growth challenge at all voltage levels in almost all regions. In order to cover increasing demand for mainly electric mobility and electric heating, the world's electricity use needs to grow 20% faster in the next decade than it did in the previous one. The decentralisation, democratisation and electrification of energy are leading to tremendous growth in micro-generators and micro-consumers. The integration of millions of these systems into existing distribution grids requires an unprecedented degree of foresight, digitalisation and standardisation.
Gas grids are at a crossroads
The EU gas network consists of over 200,000km of transmission pipelines and 2,000,000km of distribution networks. Once the energy saviour of the last century in Europe, gas grids are now the most difficult network in entire regions to decarbonise. The production, use and distribution of green molecules are controversially discussed in terms of mass, price and transportation routes. While transportation grids are expected to play a key role for energy-intensive industries beyond 2050, many experts believe that distribution grids are on the brink of extinction due to the electrification of end-user devices, e.g. heating.
European electricity transmission system

While electricity and gas grids have been dominating the discussion in recent decades, more and more players are now realising that society's decarbonisation is much more of a heat transition than a mobility and energy transition.
Today, 67 million citizens in the EU are connected to district heating and cooling solutions, with further growth fuelled by the recent energy crisis. However, space heating and cooling, and hot water supply represent 31% of the EU primary energy demand, with over 75% of it coming from fossil fuels.
Network operators therefore must rethink how to drive forward the new role of heating networks, alongside the growth of electricity networks and the transformation of gas networks.
Looking ahead
In the coming years, energy network operators will have to go even further than just solving problems through sheer investment. In the face of scarce resources, rising prices and uncertain planning assumptions, grid challenges need to be resolved by building infrastructure more intelligently as well as making them more resilient to natural and man-made threats.
While the entire currently existing global electricity grid needs to be refurbished by 2040 (about 80 million km), energy grid operators must increasingly solve challenges related to the continuous management of grid congestion in real time, the optimal use of flexibility and the improvement of risk management in relation to variable renewable energy generation. Such measures include demand-side flexibility solutions, supply-side flexibility or energy-storage solutions. However, more than EUR 1 trillion in Europe alone is expected to be invested in energy networks in the next 10 to 15 years.
Required investments in selected European energy infrastructure (in € bn)

Strategic, flexible solutions for holistic grid planning
Creating a holistic approach to planning, construction and operation while maintaining maximum flexibility at all times is the challenge of the coming decade. Digitalisation is old hat in this context. As time goes by, rolling forecasts from macroeconomic level down to the building level are becoming more and more necessary to foresee decentralised system developments that are important for grid planning. Taking into account this complexity, it becomes more and more important to involve all relevant stakeholders in investment decisions around power production and demand centres to ensure sufficient grid capacity.
On a global level 3,000 gigawatts (GW) of renewable power projects are waiting in grid connection queues. Delays in grid investments thus move the 1.5°C global warming target even further out of reach. Also, Europe is set out to achieve 15% interconnection of Europe's installed electricity production capacity until 2030. In the construction of these grids, the tight supply situation is not expected to ease, neither in terms of personnel nor technical resources. An intelligently managed long-term procurement strategy will therefore be key.
For the European Hydrogen Backbone (EHB), more than 11,000km of gas pipelines need to be built from scratch, requiring investments of EUR 80-143 billion. By 2030, CO2 infrastructure could span 6,700-7,300km and potentially extend to 15,000-19,000km by 2050. The estimated deployment costs range from EUR 6.5 billion to EUR 19.5 billion by 2030, increasing to EUR 9.3-23.1 billion by 2050.
Once the infrastructure is in place, the optimisation of energy grids as a single, large-scale machine and their smooth and secure operation will increasingly work via complex, software-supported and self-learning platforms. At the same time, the use of artificial intelligence to improve health and safety measures is an essential component in this context of increasing pressure.
For network operators, the future therefore brings more uncertainty, greater scarcity, more complex challenges and, with learning software, tools that are not yet part of every company's daily routine.
Insights at a glance
- Regulatory frameworks
Establishing clear regulatory frameworks as grid operators need reliable, long-term and future-oriented investment security for electricity, gas and heating grids
- Bureaucracy
Alleviating bureaucracy for system operators to shorten approval processes for major grid related investments in the electricity sector arising from increasing connection requirements for decentralised renewable energy projects
- Cooperation
Developing a high degree of social interactions between stakeholders as climate transition is complex, particularly in finely structured distribution grids
- Digitalisation
Using software-guided process sections and artificial intelligence to enable scaling, automation and standardisation of decisions that must be repeated millions of time
- Energy companies
Leapfrog in front of the wave as soon as utilities can, by investing heavily in their competencies to manage uncertainties, changes and a massively growing number of requests successfully
- Industrial players
Clarify early on the development and production needs of industrial players with their clients, enhance their long-term procurement competencies and further develop software-agnostic equipment
- Governments
Ensure a robust investment framework with long-term incentives such as tax credits, grants, subsidies or loan guarantees, and reduce bureaucratic hurdles by streamlining the approval processes for network operators
