“The legacy of the socialist era is distinct, especially when compared to the steady progress seen in older economies like those in Central and Western Europe,” explains Meesak. “You simply can’t draw parallels between grid advancement in Austria and Poland, or even the Baltic states.”
“It was a highly centralized system,” Meesak adds,highlighting how grid planning was heavily influenced by the economic priorities of the central government. He points to northeast Estonia, a region with a robust mining industry, where the grid was tailored to support this sector. “These nations were incredibly poor—there were no funds available. Investments weren’t directed toward improving the grid but rather maintaining it’s existing state.”
Fresh Investments and a Shift in Outlook
Table of Contents
- 1. Fresh Investments and a Shift in Outlook
- 2. Building a Smarter Grid
- 3. The Evolution of Energy Grids: from Fossil Fuels to Intelligent Systems
- 4. The Rise of Intelligent Grids
- 5. The Psychological Barrier
- 6. The Role of Storage
- 7. Looking Ahead
- 8. The Future of Energy Storage: Beyond Short-Term Solutions
- 9. What are the societal and psychological barriers that must be overcome to successfully implement intelligent grid technologies?
- 10. Key Takeaways:
- 11. Conclusion:
one defining characteristic of Eastern Europe’s energy infrastructure is the prevalence of state-owned assets. Meesak notes that while EU regulations prevent a single entity from controlling both generation and distribution systems, Estonia’s grid remains predominantly state-owned. This has discouraged private investors from entering the sector.
“Grid financing varies across Europe,” Meesak states. “After gaining independence from the Soviet Union in the 1990s, all grid assets were state-owned. In Estonia, this remains true—only 5% of the grid is privately owned. The rest belongs to state-run energy companies. This is a common trend across the Baltic states, where energy generation and distribution assets have historically been under state control.”
“Without additional measures, these challenges will only intensify,” warns Robin Hirschl, CEO of PV-Invest and a speaker at a recent Warsaw conference. He emphasizes the need for increased investment due to the rapidly evolving energy landscape in Eastern Europe. “We’re moving toward a grid with more variable generation—primarily from renewables like wind and solar, which can be unpredictable. At the same time,we’re reducing baseload capacity,which adds to the complexity.”
Recent data from market analyst Aurora supports this view. Between 2022 and 2023,there was a 14.45% year-on-year increase in “remedial actions” across European grids to manage load, including curtailment. This statistic underscores the growing strain on Europe’s energy infrastructure, which struggles to handle the current mix of renewable and non-renewable energy sources, let alone the anticipated surge in renewable power.
“We need to rethink how we approach infrastructure planning and requirements,” Hirschl suggests. “New financial support must be paired with innovative thinking.”
“Investment should focus on making grid endpoints—both generators and consumers—more flexible,” Hirschl continues. “As a solar investor, we still base our business plans on the assumption that our systems will operate at full capacity 100% of the time. We need to move away from that mindset.”
Building a Smarter Grid
At the Warsaw event, Hirschl advocated for the development of a more “intelligent” grid in Eastern Europe. In a private discussion, he elaborated on this vision, describing a system where devices communicate with each other to autonomously balance power supply and demand.
“An intelligent grid would integrate advanced technologies to optimize energy distribution,” Hirschl explains. “This means creating a network where renewable energy sources, storage systems, and consumer demand are seamlessly coordinated. Such a system would not only improve efficiency but also enhance resilience against fluctuations in energy production.”
This approach aligns with the broader shift toward renewable energy, which requires grids to be more adaptable and responsive. by investing in smart grid technologies, Eastern Europe could address its unique challenges while positioning itself as a leader in sustainable energy innovation.
The Evolution of Energy Grids: from Fossil Fuels to Intelligent Systems
As the world transitions toward renewable energy, the traditional energy grid is undergoing a profound transformation. What was once a one-way system—delivering power from large fossil fuel plants to consumers—is now evolving into a dynamic, interconnected network. This shift is driven by the rise of distributed energy generation,such as wind and solar,and the need for smarter,more resilient grids.
The Rise of Intelligent Grids
An intelligent grid is one where generators and consumers communicate seamlessly, adapting to the grid’s needs in real time. As Hirschl explains,“An intelligent grid is [one] where all generators,as well as consumers,talk to each other,and can adapt to the local needs of the grid.” This means even small consumers can contribute versatility to the system. For instance, a dishwasher could be programmed to run at the most optimal time, reducing strain on the grid during peak hours.
This vision of a smarter grid is not just theoretical. In 2023, Jess melanson, COO of Utilidata, highlighted the potential of “distributed AI” to revolutionize energy grids. The U.S.has already made significant strides in this area, with investments like the Department of Energy’s $70 million grant to enhance grid resilience in Arizona. Meanwhile, Eastern Europe is catching up, as Meesak notes, “The grid was very heavily single-directional, from the large fossil fuel power plants to the consumers. With the appearance of the frist wind parks in the mid-2000s, it became clear that the grid needed to evolve to accommodate distributed generation.”
The Psychological Barrier
While the technology for intelligent grids exists, adoption faces a significant hurdle: public perception. Hirschl points out, “I think it’s more of a psychological challenge than a technical challenge. The technical solutions are there, and there are various ways of how these end points can communicate with each other. Even in my little world, there are so many people who are afraid of smart meters because they feel controlled and don’t want to share so much data about themselves.”
Overcoming this resistance is crucial for the widespread implementation of smart grid technologies. Educating consumers about the benefits—such as cost savings, improved reliability, and environmental sustainability—could help bridge the gap.
The Role of Storage
One of the most promising solutions for modernizing energy grids is energy storage. At a recent event in Warsaw,storage emerged as a key topic of discussion. Battery energy storage systems (BESS) not only enhance grid resilience but also reduce the need for costly infrastructure upgrades. Meesak explains, “If we have the storage close to consumption, this might mean that we don’t need, in certain cases, to build additional grid capacity to satisfy the peak loads. With local storage, we might avoid rebuilding the grid; we see storage to be an essential part of the grid.”
This is particularly relevant given the staggering costs of grid upgrades. According to the european Round Table for Industry (ERT), Europe may need to invest €800 billion (US$870 billion) by 2030 to modernize its grid infrastructure. Storage offers a cost-effective alternative, potentially saving billions while improving system flexibility.
hirschl takes this idea further, suggesting that integrating storage into the grid could also drive innovation in battery technology. “We probably need to go beyond [what exists now],” he says,hinting at the potential for longer-duration storage solutions that could revolutionize energy delivery.
Looking Ahead
The transition to intelligent grids is not just a technical challenge—it’s a societal one. From overcoming psychological barriers to investing in cutting-edge storage solutions, the path forward requires collaboration between governments, industries, and consumers. As the world moves toward a more sustainable energy future, the evolution of the grid will play a pivotal role in ensuring reliability, efficiency, and accessibility for all.
The Future of Energy Storage: Beyond Short-Term Solutions
When we think about energy storage today, the conversation ofen revolves around batteries designed for short-term use—systems that provide power for one, two, or four hours. These solutions are essential for quick reserves and stabilizing grid frequency. However, as the world moves toward a more electrified future, the need for longer-term storage solutions is becoming increasingly apparent.
“Probably going forward we need to think [about] longer [times], storage over a week or a month,” says Hirschl, highlighting the potential of technologies like pumped hydro storage systems.These systems, already in use in places like Australia, offer a promising alternative to the chemical batteries dominating the European market. They represent a shift toward more versatile and sustainable energy storage options.
As our reliance on electricity grows, so does the demand for a smarter, more adaptable grid. Meesuk, an expert in the field, emphasizes that the electrification of everyday life—from heating systems powered by heat pumps to electric vehicles reducing carbon emissions—requires a complete reimagining of grid infrastructure. “What we see is that all of our lives are more and more electrified,” Meesuk explains. “With electrification, there might be a need to completely rebuild the grid to add the capacity for the peak loads.”
This transformation isn’t just about adding capacity; it’s about integrating a diverse range of technologies to create a grid that’s both resilient and flexible. The future of energy storage will likely involve a mix of short- and long-term solutions, ensuring that the grid can handle fluctuations in demand while supporting the transition to renewable energy sources.
For those interested in the intersection of finance and renewable energy, the Solar Finance & Investment Europe event in London on February 4–5, 2025, offers a unique opportunity to explore these topics in depth. Attendees can secure a 20% discount on tickets by using the code “PVTPREM20” at checkout. This event brings together infrastructure funds, institutional investors, asset managers, and development platforms driving Europe’s energy transition, making it a must-attend for anyone invested in the future of renewable energy.
As we look ahead, the evolution of energy storage and grid infrastructure will play a pivotal role in shaping a sustainable future. By embracing innovative technologies and rethinking traditional approaches, we can build a system that meets the demands of an electrified world while minimizing environmental impact.
What are the societal and psychological barriers that must be overcome to successfully implement intelligent grid technologies?
Fficiency, and resilience in the face of growing energy demands and the shift toward renewable sources.
Key Takeaways:
- State Ownership in the Baltics: In Estonia and other Baltic states,the majority of grid assets remain state-owned,with only 5% privately owned. This reflects a broader trend in the region where energy generation and distribution have historically been under state control.
- Challenges of Renewable Integration: The increasing reliance on variable renewable energy sources like wind and solar is straining Europe’s energy infrastructure. This has led to a 14.45% year-on-year increase in “remedial actions” such as curtailment to manage grid load.
- Need for Investment and Innovation: Experts like Robin Hirschl emphasize the need for importent investment in grid modernization and smarter technologies to handle the complexities of renewable energy integration. This includes making grid endpoints more flexible and moving away from the assumption of constant full-capacity operation.
- Intelligent Grids: The vision for a smarter grid involves seamless dialog between generators and consumers, enabling real-time adaptation to grid needs. This could include optimizing consumer devices (e.g., dishwashers) to reduce peak load strain.
- Psychological Barriers: Public resistance to smart meters and data-sharing poses a significant hurdle to the adoption of intelligent grid technologies.Education and awareness about the benefits of these systems are crucial for overcoming this resistance.
- Role of Energy Storage: Battery energy storage systems (BESS) are seen as a key solution for enhancing grid resilience and reducing the need for costly infrastructure upgrades. Storage systems located close to consumption points can definately help manage peak loads without expanding grid capacity.
- Cost of grid Modernization: Europe may need to invest up to €800 billion by 2030 to modernize its grid infrastructure. Storage solutions offer a cost-effective alternative,perhaps saving billions while improving system flexibility.
- Future innovations: The integration of advanced storage technologies and distributed AI could revolutionize energy grids, making them more adaptable and responsive to the demands of a renewable energy future.
Conclusion:
The transition to intelligent grids represents a fundamental shift in how energy systems operate, moving from centralized, fossil fuel-based models to decentralized, renewable-driven networks. While technical solutions exist, overcoming societal and psychological barriers, along with significant investment in storage and smart technologies, will be critical to realizing this vision. as Eastern Europe and the rest of the world continue to embrace renewable energy, the evolution of the grid will play a central role in ensuring a sustainable and resilient energy future.
