From the desk of Luke Nelson:

Europe is heading into winter with its weakest gas storage buffer in 15 years, and benchmark gas prices are more than double what they were a year ago. At the same time, around 500 gigawatts of renewable projects are waiting in line. Solar farms and wind parks that could be generating power today are sitting idle because the network cannot carry what they produce. Leading the work of our Centre for Energy and the Environment across Europe, I often see projects stall because there's no grid capacity to connect them.

European governments have already spent nearly 18 billion euros protecting households and businesses from higher energy costs. That support will help families through a challenging winter, but without investment in energy infrastructure, Europe risks facing a similar squeeze next year. A lasting response includes the cables, substations and connections that let Europe use more of the power it produces at home.

EU policymakers are now negotiating the Grids Package, which addresses planning, permitting, cost-sharing, and greater use of flexibility and technology. Agreeing to this package and putting it into practice quickly across EU member states can help strengthen Europe's energy security and competitiveness, while supporting efforts to lower household electricity costs.

The cost of waiting

Europe still imports more than half of its energy, and gas price shocks show up on household bills. Each wind farm, solar park and battery built in Europe can help reduce that exposure, as long as it can connect to the grid. Right now, too many cannot. Ireland lost a tenth of its renewable electricity in 2025 because the grid couldn't carry it. Without enough capacity on the grid, more generation can mean more congestion, preventing available power from reaching consumers. Across Europe, managing grid congestion cost nearly 4 billion euros in 2023, and that bill often ends up falling on the consumers.

Europe's grids need an estimated 1.2 trillion euros of investment by 2040, and governments can fund only a part of it. Private investors can help supply much of the rest, including JPMorganChase through our $1.5 trillion, 10-year Security and Resiliency Initiative. Rules set in Brussels and national capitals over the next year will partly shape how much governments can contribute and at what price. Cheaper, steadier capital generally means faster connections, a stronger grid, and smaller bills.

Three things Europe should do now

• Put permitting reform into practice. The proposed Permitting Directive brings digital portals, faster procedures and priority status for strategic infrastructure. Each member state can benefit by implementing these reforms; timely implementation across all 27 would help extend those benefits throughout the EU. Governments should also offer flexible connections, which let projects plug in before every network upgrade is finished, where technically feasible and safe.
• Get more out of the grid we already have. A new high-voltage line can take around ten years to build. Sensors and software that show how much power a line can safely carry, and that reroute electricity around congestion, can be installed in months. Before approving major investments, planners should weigh these tools, along with storage and flexible demand, against new construction. They can also use them to free up capacity while the new lines are built.
• Make grids easier to invest in. Grid assets offer regulated returns over decades, which can align with the long-term investment needs of pension funds and insurers. The EU is moving in the right direction by exploring the Operator Securitisation Facility, which would turn a portion of grid operators' regulated income into assets investors can buy, helping free up grid operators' balance sheets. Further work is also needed to improve the access to financing of smaller and municipally owned operators running local networks. The U.S. shows how securitisation can be used to finance utility costs, with recovery bonds continuing to attract investment and the model expanding across states. Europe, meanwhile, already has a deep securitisation market, but no established asset class for grid-operator revenues. A standard framework for energy receivables could help channel that market toward long-term grid investment.

Public-private collaboration is critical

Policy can help address permitting delays, grid congestion and barriers to financing, but rules alone will not deliver the cables, substations and connections Europe needs. Pairing policy reform with private finance can bring the capital, expertise and long-term investment needed to turn planned infrastructure into operating projects at scale.

Recognising this, JPMorganChase is supporting an independent programme led by the Green Finance Institute, which brings public and private partners together to design and pilot financing solutions for smaller distribution operators, innovative grid technologies, and cross-border transmission. We believe that working together, the public and private sectors can turn better rules into stronger grids, greater energy security, and more affordable power.

The bottom line

Europe has diagnosed the problem and drafted the rules. The coming year will show whether those rules become projects. Stronger grids are where Europe's energy ambitions meet reality. We will keep working with policymakers to help make sure the grid holds up.

Related reading:

• The Race to Resilience: Balancing the energy security equation
• Demand is here, time to build the grid of tomorrow
• European Grids Package (European Commission)
• Green Finance Institute: Grids & Networks