Driving Growth Through Renewables and Sustainable Energy Infrastructure

The European power generation and transmission market encompasses the infrastructure used to generate, transmit, and distribute power across Europe. The European Union (EU) has established ambitious climate targets for net-zero emissions by 2050. This necessitates substantial investments in renewable energy projects and supporting infrastructure.

Urbanization and electrification also drive the demand for enhanced power generation and transmission capabilities. As urban populations rise and electricity consumption increases— especially from industries, residential buildings, and electric vehicles (EVs)—there is a growing need for reliable electricity supply. New infrastructure projects, including smart grids and microgrids, are being developed to meet this demand.

Additionally, regulatory and policy support plays a crucial role in this growth. European governments and the EU have implemented various regulatory frameworks and financial incentives to stimulate investment in renewable energy projects and grid modernization. Initiatives like the European Green Deal aim to facilitate the transition to a sustainable energy system, promoting the development of new transmission and distribution infrastructure.

Despite these initiatives, the intermittency of renewable energy sources and the ageing power transmission infrastructure in many countries pose a major challenge for governments. At the same time, while integrating a unified European grid is beneficial for energy security, differences in regulatory frameworks between countries can complicate cross-border power transmission projects. Harmonizing regulations and coordinating investments across borders remain challenging.

In response to these challenges, recent developments within the industry include deploying high-voltage transmission lines, especially HVDC technology, to connect offshore wind farms and other remote renewable energy sources to the mainland grid.

The adoption of smart grid solutions is also rapidly increasing, driven by the need for greater grid flexibility and realtime monitoring capabilities. This is accompanied by integrating energy storage technologies like battery storage systems to address the intermittency of renewables. Likewise, while overhead transmission lines dominate the market, underground lines are gaining popularity, especially in densely populated urban areas with limited space.

At present, companies like Siemens AG, ABB Ltd., General Electric (GE), and Alstom SA continue to dominate the European power generation and transmission market due to their expertise in high-voltage transmission, grid modernization, and renewable energy integration, along with strong portfolios in smart grid technologies and electrical equipment solutions.

Contemplating the future of the European power generation and transmission market evokes a picture of stable growth and progress. The power transmission market was valued at USD 13.5 billion in 2022 and is anticipated to grow at a CAGR of 5 per cent. This expansion is crucial as it addresses rising electricity demands while enhancing infrastructure resilience and sustainability.