Renewables are growing too fast for the grid and batteries. The flagship ECNO report warns Europe of an investment paralysis.

The expansion of electricity grids, large‑scale energy‑storage facilities, and demand‑flexibility systems is drastically failing to keep pace with the explosive growth of wind and solar farms in Europe. The flagship 2026 report of the ECNO institute warns that without immediate coordination of investment plans among EU member states, the Union’s energy transition will become stuck in an infrastructural bottleneck.

The share of renewables is growing too slowly

The newly published document from the European Climate Neutrality Observatory paints a troubling picture of EU energy. Although in 2025 rapidly installed renewable sources (wind and solar) reached a combined 30% share of total electricity generation in the EU, the pace of this growth between 2020 and 2025 is described as decisively too slow.

At the current rate, the European Union may face a major challenge in achieving its target of a 58% share of renewables in the energy mix by 2030. Why is this happening, given that the statistics for newly connected capacity look impressive on paper?

The main culprit is grid constraints and so‑called curtailment — the forced shutdown and wasting of green energy by transmission system operators during periods of overproduction. The infrastructure simply cannot absorb such large volumes of energy at once.

“Our analysis clearly shows the need for faster and better‑coordinated grid expansion, including drastically shortening the waiting time for connection conditions. These investments must cover not only the highest‑voltage transmission networks but above all regional distribution grids,” – warns Eike Velten, climate program director at the Ecologic Institute and lead author of the report.

Distribution grids need billions

Although financial spending on grid infrastructure in Europe has been rising since 2020, the pace of these investments remains insufficient. The ECNO report indicates that in the distribution‑grid sector alone, annual investment growth should range from 12% to as much as 25%.

The current model of grid management in the EU is highly fragmented. Planning and financial decisions lie with individual member states, making integration difficult. Experts place high hopes in the White Paper on the integration of the European electricity market, scheduled for the second half of 2026. It is expected to help reduce system costs and improve market‑flexibility management.

Lack of smart meters blocks consumers

Another delayed element of the puzzle is the rollout of smart metering. Without modern meters, it is impossible to fully unlock demand‑side flexibility.

The report calls on governments to immediately complete meter‑replacement programs and simultaneously introduce dynamic tariffs (in which electricity prices change hour by hour). Only the combination of these two elements allows companies and consumers to achieve real savings — by automatically shifting energy consumption (e.g., charging cars or running industrial processes) to hours when the wind blows and the sun shines, and electricity is cheapest on the market.

The capacity market still favors gas over batteries

Equally alarming are the findings regarding energy storage. Although the European BESS market is growing, the pace of new capacity additions is below the European Commission’s expectations for 2030.

An analysis of capacity‑market data from 2020–2024 reveals an uncomfortable truth — support systems in many countries still strongly favor flexible gas power plants over clean battery technologies. Gas units more easily meet continuity‑of‑supply criteria, while energy‑storage systems and demand‑response solutions still do not receive financial incentives on a scale that would allow a lasting shift away from fossil fuels. A positive trend has only been visible since 2023, when the capacity of new batteries finally began to exceed new gas investments.

ECNO’s conclusions align with Ember’s recent report

A recently published report by Ember shows that across the EU there is a massive gap — as large as 120 GW — between planned and contracted renewable‑energy expansion and the actual transmission capacity of European electricity grids.