Grid Investment Is Surging. Regulators Are Catching Up.

EU energy regulator ACER issues 10 recommendations to fix planning gaps as Europe's grid investment hits record levels

4 Jun 2026

Grid spending across 25 EU member states and Norway reached €35.3 billion in 2024, up from €23.5 billion in 2021. By 2027, that figure may hit €46.7 billion. The money is arriving. The oversight, less so.

ACER's first report on how national regulators set revenues for distribution system operators, published in April, draws on data from 191 large networks. Its findings are awkward. Nearly two-thirds of EU distribution operators face no obligation to prepare formal network development plans. Over 5% of European electricity customers are served by operators with no infrastructure planning requirement at all. In six member states, smart meter penetration sits below 30%, blunting the data visibility that efficient grid management now demands.

Underlying this is a structural bias that regulators have long tolerated: operators tend to build new infrastructure rather than deploy cheaper flexibility solutions. Spending caps, designed to control costs, often leave utilities exposed to overruns they cannot recover. The incentive to plan well, and plan openly, remains weak.

EU electricity rules that came into force in 2024 expanded what distribution operators are expected to do. Beyond moving power from one place to another, they are now formal participants in energy markets, managers of data systems, and buyers of flexibility from households and businesses. The gap between those ambitions and the regulatory frameworks governing them is what ACER's ten recommendations attempt to close.

The agency wants national regulators to extend planning obligations to smaller operators, remove spending caps that create unrecoverable cost exposure, and require mid-term expenditure plans to be published. Consolidation among operators is also flagged as useful: Italy reduced its distribution sector from 126 to 114 operators between 2019 and 2024, a trend ACER views as conducive to better compliance and service quality.

Distribution grids are the last physical link before electricity reaches a home, factory, or charging point. Without regulatory alignment, the investment pouring into them may not produce the outcomes Europe's clean energy targets require.