Energy Outlook 2025: Energy Networks and Grids

2025 will be a pivotal year for the EU’s energy network. Key developments, including the full implementation of REMIT and the EU Electricity Market Reform, will significantly impact TSOs and grid users. These changes will increase transparency, foster flexibility, and mitigate energy price crises. 

Additionally, the publication of the Offshore Network Development Plan (ONDP) sets ambitious goals for offshore wind energy and transmission infrastructure. TSOs will face significant challenges in connecting offshore wind farms and ensuring a reliable and sustainable energy supply. 

The EU’s focus for 2025 

Energy networks will face major developments in 2025 as a result of the key milestones reached this year: the adoption of REMIT and of the EU Electricity Market Reform as well as the publication of the ONDP.

The entry into force of REMIT: new obligations for TSOs and clarifications to be expected at the end of 2024/ early in 2025. 

Important changes to REMIT entered into force on 7 May 2024, imposing new obligations on market participants, including TSOs. These new obligations include:

• Inside information – all market participants are now required to publish inside information (II) on registered and authorised inside information platforms (IIPs). ACER’s REMIT Guidance already strongly recommended publication on IIPs, but it now becomes mandatory. Publication on TSOs’ websites will not be sufficient unless, as some already are, they are registered as IIPs. Also codifying existing guidance and case-law, TSOs are now required to publish details of “intermediate steps in a protracted process”, e.g. updates on evolving outages and returns from outage, where that amounts to II. 
• Algorithmic trading – TSOs are now required to have in place “effective systems and risk controls” if engaging in “algorithmic trading” as defined in REMIT, as some may be in the case of some balancing and other activities. This includes ensuring that trading systems are resilient, have sufficient capacity, and are subject to appropriate trading thresholds and limits etc. 
• Reporting of balancing products – as a result of the modification of the definition of organised market places, TSOs’ procurement of balancing energy and capacity, and capacity markets, are now likely to fall into this category and TSOs may therefore be required to report balancing capacity and energy contracts, when the revised REMIT Implementing Regulation is adopted in 2025. 

The EU Electricity Market Reform: new horizons for TSOs and consumers 

Earlier this year, the EU Parliament and Council adopted legislation revising the electricity Regulation and Directive. This reform introduces several changes relevant to TSOs and grid users, notably with the view to enhancing transparency, developing flexibility and mitigating the energy prices in times of crisis. 

• Enhanced transparency regarding connections – both TSOs and DSOs are now subject to higher levels of transparency with regard to connections. They must publish in a transparent manner clear information about the capacity available for new connections, and must provide system users with clear information about the status of their connection requests. Whereas this obligation is directly applicable to TSOs (as provided under the amending Regulation), Member States have until January 2025 to transpose the obligation for DSOs (as provided under the amending Directive). 
• Flexibility and network development plans – while the EU Network Code on demand response is currently being developed and should be submitted to the EU Commission by March 2025, the EU Electricity Market Reform further developed the overall EU framework of ‘flexibility’, i.e. the ability of an electricity system to adjust to the variability of generation and consumption patterns and to grid availability, particularly for the purposes of congestion management, balancing and better integration of renewable resources. More specifically, the reform requires the preparation of national reports on longterm flexibility needs. Among other things, these reports should consider the capabilities of nonfossil flexibility solutions, such as demand response, energy storage, aggregation and interconnection to meet flexibility needs. TSOs are likely candidates for being instructed to produce these reports, using a methodology to be developed by ENTSO-E and EU DSO by April 2025 and approved by ACER. Upon the completion of this report, ENTSO-E, TSOs, and DSOs will be required to update their respective network development plans accordingly. 
• Peak-shaving product limited to energy crises situations? – In situations of electricity price crises, Member States may ask their respective TSOs to propose and activate peak-shaving products to decrease demand during peak hours. By 30 June 2025, ACER is required to consult with stakeholders to evaluate the potential effects of creating peak-shaving products beyond crisis situations, provided that they do not unduly distort the functioning of the markets and cause a redirection of demand response services.

Offshore Network Development Plan (ONDP): looking ahead to the next 25 years 

The ONDP, a new component of the well-established Ten-Year Network Development Plan (TYNDP), falls within the framework provided by the TEN-E Regulation. This Regulation aims to promote a comprehensive approach to offshore infrastructure planning, moving away from a project-by-project approach, and to support the 2050 climate neutrality objective. The ONDP was published in January this year by ENTSO-E and turned Member States’ 2023 non-binding agreements on offshore goals into concrete transmission equipment needs and costs per offshore corridor. The plan is ambitious, providing for a total of 496 GW of generation capacity to be deployed in European waters and connected through the offshore transmission infrastructure by 2050. This means 15 GW/year per country, compared to an average 2.5 GW/year during the last 10 years. This represents a challenge for the wind industry but also for TSOs to ensure connection of offshore systems to their transmission systems (i.e. the so-called “corridors”). Indeed, by 2030, this would represent 11,000 km of cable route for radial connections.

This suggests massive investments, estimated at around €400 bn for the period 2025-2050, which include costs for hybrid transmission corridors, connecting some of the offshore RES clusters to different national systems. TSOs raised the importance of providing incentives to stimulate investments, for example by developing their procurement strategies to ensure clarity, replicability and speed-up processes. Supply in critical raw materials is also one of the challenges raised by TSOs. 

The ONDP also takes into account environmental impacts of grid infrastructure on the marine environment, e.g. habitat disturbances, underwater noise and vibration, electromagnetic fields, and heat emissions etc. and provides mitigation measures. 

The ONDP will be updated in January 2026, making 2025 a key year to observe how the plan provided in this first edition will be implemented.