Can Europe’s power grid cope with the green transition?

“More Energiewende, more business for us,” says Leonhard Birnbaum, chief executive of E.ON, a German power-grid operator that enjoys a near monopoly in Europe’s biggest economy. The set of policies and timetables to which he is referring (and which translates to “energy turning-point”) was first unveiled in 2000 with the aim of making Germany a net-zero emitter of carbon by 2045. It is meant to increase the demand for and the supply of green power exponentially. And it can only work so long as that power can reliably flow from wind and solar farms to users in Germany and the rest of Europe.

This presents an enormous opportunity for E.ON—and an equally formidable challenge. The energy transition requires huge investments in German and European grids, and it requires them right now. That will only happen if the government and regulators fundamentally change the way they deal with power-grid projects, notably by cutting red tape and speeding up permitting for grid expansion and reinforcement. “The limits of infrastructure are the biggest obstacle of Europe’s green transition,” says Mr Birnbaum. At the moment, he explains, the grid expansion can barely cope with the huge surge of producers of renewable energy trying to connect to it.