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On 10 December 2025, the European Commission unveiled the European Grids Package, a sweeping initiative to tackle structural bottlenecks in Europe’s energy system and accelerate the transition to clean, affordable power. At its core, the package seeks to strengthen and modernize Europe’s electricity infrastructure, ensuring that grids can integrate high volumes of renewables, support electrification, and deliver energy security. The package seeks to reduce permitting delays, boost cross-border interconnections, and make smarter use of existing networks through digitalization. In addition to legislative proposals, the package also contains guidance on grid connections and contracts for difference to help EU Member States and operators implement these reforms effectively.
Key elements include:
Amendments to Renewable Energy Directive - RED (2018/2001)
Approvals and permitting
The proposal significantly accelerates permitting procedures for grid connections, renewable energy projects, and storage projects.
Solar installations and (co-located) storage with a capacity below 100 kW will no longer require any administrative permits other than grid connection.
Larger solar installations on artificial structures (e.g. rooftops) will have a maximum permitting time of three months.
Similarly, the proposal states that the permit-granting procedures, including grid connection permits and, where required, environmental assessments, shall not exceed six months for stand-alone energy storage with a total installed capacity above 100 kW, while smaller units are exempt from administrative and environmental permits.
Grid connections for solar and co-located storage are streamlined under the proposal for RED and are set at one or three months, depending on the complexity of the installation. System operators must either grant connection where capacity allows or propose flexible connection solutions where capacity is insufficient.
The proposal for RED also establishes a tacit approval concept, stating that if authorities fail to respond within the legally defined timeframe, certain steps in the permitting process are automatically considered approved, except for environmental decisions and grid connection permits.
Environmental flexibility
The proposal for RED also sets out a number of exemptions from Environmental Impact Assessments (EIAs) and the Habitats Directive.
Repowering of wind energy installations without using additional land is exempt from all environmental screening and impact assessment requirements.
It exempts solar installations above 100 kW on artificial structures from EIAs.
The proposal also provides for more flexibility in relation to the Habitats Directive. Developers will (still) need to assess the consequences of their renewable installation or plant on the environment (e.g. the nitrogen depositions because of the construction works or the impact on birds). However, in the context of the ADC Test Assessment under the Habitats Directive the scope of the overriding public interest will be extended in the sense that renewable installations and plants, the grid, storage assets and recharging stations are to be prioritized when balancing interests in permitting procedures. In addition, it will be determined that authorities should consider alternatives only if they achieve the same renewable energy objective within a similar timeframe and cost. If compensatory measures are necessary, there will be possibilities to carry out these measures in parallel with the development of the installation.
Digital and transparency
The proposal for the amendment of RED requires Member States to establish a single national digital portal for all steps of the permitting procedure for renewable energy, storage, and grid projects. This portal will allow developers to submit applications electronically, track progress in real time, and check compliance with deadlines.
Amendments to Electricity Directive (2019/944)
The proposal revamps Article 8 (Authorizations) of the Electricity Directive. A time limit of two years applies to grid authorization procedures, extendable up to one additional year in duly justified extraordinary cases. It also states that requests for additional information from project promoters must be made within three months of application. Finally, tacit approval applies where authorities fail to act within the deadline, except for environmental decisions.
Amendments to Gas Market Directive
Unlike permitting for renewables or grid infrastructure, hydrogen projects do not have a maximum permitting period set, and they cannot benefit from the above-mentioned flexibility under the Habitats Directive either. Nevertheless, the proposal introduces a three-month deadline for requesting additional information and establishes the concept of tacit approval, which applies based on nationally defined time limits.
New TEN-E Regulation
The new TEN-E Regulation establishes central scenario development by the Commission, mandatory consideration of non‑wire and digital solutions, and streamlined permitting for Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs), with a maximum of 42 months across the pre‑application and statutory phases. Tacit approval may apply for missed administrative deadlines only where recognized in national law and always excludes environmental decisions. It also requires TSOs to ring-fence 25% of congestion income for PCI investments.
Guidance on efficient and timely grid connections
A legally non-binding document outlines the Commission's recommendations for Member States, National Regulatory Authorities (NRAs), Transmission System Operators (TSOs), and Distribution System Operators (DSOs) on how to reduce grid connection queues and accelerate electrification.
The guidance states that while EU law does not require the first-come, first-served principle for grid connections, it remains applied by the vast majority of Member States, either because connection queues are a relatively recent phenomenon, or because of uncertainty on what the legal framework allows. However, the guidance states that NRA’s and system operators should implement mechanisms to prevent speculative behavior where capacity is locked in early for immature projects, often with the aim of selling the connection rights or keeping several options available for the location of the asset. As an alternative, the guidance proposes several different options for the allocation of transport capacity:
First-ready, first-served (prioritizing projects that meet maturity criteria like permits, proof of financing, or obtaining land rights).
Milestone‑based queue management and “use‑it‑or‑lose‑it” rules to remove speculative or non‑progressing applications and prevent hoarding practices through the introduction of a non-refundable capacity reservation fee.
Prioritization frameworks based on objective, non-discriminatory criteria, such as grid friendliness, climate benefits, social value, security needs.
It should be noted that for large connection requests of heavy-grid users, such as data centers, high-power EV recharging pools, electrification of the industry, a change in grid connection procedure would not be sufficient. Therefore, the guidance recommends TSOs and DSOs engage with these heavy-grid users to ensure their needs are reflected in grid planning sufficiently in advance and to fully use their flexibility potential for a more efficient grid operation. It also encourages considering direct lines to relieve pressure on main grids and shorten timelines for large consumers.
Guidance on two-way contracts for difference (2w-CfDs)
A legally non-binding document provides recommendations to Member States on designing 2w-CfDs for renewable and nuclear generation, as required under the revised Electricity Regulation. The guidance highlights that poorly designed CfDs can distort bidding behavior, increase system costs, and reduce incentives for efficient investment. To address this, the Commission recommends:
Avoid bidding distortions. Do not remunerate production during negative price periods and maintain incentives to react to day-ahead, intraday, and balancing signals.
Preserve efficient maintenance incentives. Use long reference periods or production-independent payments, so maintenance occurs when system needs are low.
Maintain forward market participation. Design reference prices and periods to avoid undermining hedging and liquidity in forward markets.
Ensure optimal investment decisions. Keep sufficient exposure to market prices. Introduce locational incentives where needed to reduce congestion and curtailment.
Combine CfDs with PPAs carefully. Allow partial capacity reservation for PPAs but mitigate risks of cross-subsidisation and liquidity reduction through competitive processes.
Next steps
The proposal will be submitted to the European Parliament and the Council (EU Member States) under the ordinary legislative procedure, during which a number of changes and amendments will likely be proposed. The compromise agreement between the two co-legislators will then be adopted as the final legislation.
In relation to the Guidance on efficient and timely grid connections, the Commission states that NRA’s and system operators can implement these recommendations into their procedures relatively fast.
