News

May 2025

In a recent session hosted by the Industrial Practice Group at Pedersen & Partners, Gerhard Christiner, Chief Technical Officer of Austrian Power Grid (APG), shared his perspective on the pressing challenges and systemic changes underway across Europe’s electricity infrastructure.
 

The discussion, moderated by Michael Larsen, Client Partner at Pedersen & Partners and Sune Christiansen, Equity Partner and Global Head of the Industrial Practice Group at Pedersen & Partners, highlighted the sector’s urgency in adapting to energy system transformation. 

Christiner focused on the critical role Transmission System Operators (TSOs) play in enabling the continent’s energy transition. As Europe pushes towards full decarbonization by 2050, the electricity grid must adapt rapidly to accommodate massive renewable integration and new demand from electrification in transport, heating, and industry.

“We have lived off the infrastructure built by previous generations. Now, with the rapid expansion of renewables, the grid has already reached its limits. The transformation won’t be a reform – it will be a revolution that requires a system-wide approach,” Christiner stated.

He emphasized that while renewable energy generation is accelerating, grid development is not keeping pace. Delays in permitting, infrastructure bottlenecks, and lack of investment coordination are hindering the system's ability to deliver secure, affordable, and sustainable electricity in an optimal way.

TSOs as the Backbone of the Energy Transition
Christiner emphasized that TSOs are more than grid operators who operate and maintain the physical infrastructure. In fact, they are responsible for managing the entire system of increasingly decentralized and volatile renewable energy sources, ensuring real-time demand-supply balance, and enabling a well-functioning integrated electricity market. Their strategic role also includes long-term grid development planning to accommodate the push towards electrification of industry, transport and the heating sector as well as new markets for flexibility through innovative digital technologies.

Europe’s Grid Faces Structural and Regulatory Bottlenecks
Christiner highlighted the widespread issue of transmission bottlenecks, particularly at cross-border connections and within high-demand regions. These are exacerbated by delayed grid expansion due to protracted permitting processes. In some cases, infrastructure projects have taken more than two decades to implement, leading to inefficiencies, price disparities, and constraints on renewable energy deployment.

Investment Scale: The Austrian Example
Meeting Austria’s 2040 renewable energy targets will require roughly €100 billion of investments into new energy infrastructure. This includes investments in renewable generation, as well as new grid infrastructure (transmission, distribution, district heating and hydrogen), and flexibility and storage solutions. Christiner stressed that decarbonization is not just about adding renewable energy - it must be matched appropriately by investments in grid and system flexibility.

Seasonal Mismatches and the Need for Flexibility
The grid must be able to manage major seasonal and daily imbalances. For instance, Austria is expected to see a significant electricity surplus in summer from solar and wind, while facing deficits in winter. This mismatch underscores the need for grid-strengthening, storage capacity, and cross-border transmission to distribute renewable power when and where it is needed.

Talent and Supply Chain Challenges
Europe is facing a growing shortage of qualified engineers and technical specialists. Christiner noted a sharp decline in electrical engineering graduates in Austria, with APG now focusing on in-house training and new partnerships with universities to address the talent gap. Simultaneously, supply chain constraints - especially for transformers and other critical components - are leading to delays and cost increases, with delivery times now exceeding five years in some cases.

Hydrogen and Nuclear: Uncertain Yet Inevitable
While hydrogen is seen as a long-term solution, Christiner emphasized the absence of a viable business case in the short term. High production costs and lack of infrastructure are delaying industrial adoption. 
Similarly, small modular reactors (SMRs) are gaining traction in some countries, but remain politically infeasible in Austria, where nuclear power is not considered a strategic option.

Regulatory Reform and the Case for Digitalisation
Current regulatory frameworks prioritize CapEx (investments in infrastructure assets) over OpEx (operational expenditure). Christiner stressed the need for a more balanced regulatory approach that supports innovation and operational efficiency especially through digitalization. Digitalising grid operations -through sensors, real-time data, and AI - will be critical in managing increasing complexity and volatility in the system.

The session concluded with a dynamic Q&A, with participants raising questions around cybersecurity, talent development, cross-border planning, and how to reconcile national energy goals with the broader European vision. Despite the scale of investment and systemic challenges ahead, Christiner’s outlook remained grounded in realism and urgency. Christiner closed with a reflection on the speed of change:

“There are decades when nothing happens, and then there are weeks where decades happen. That’s the kind of moment we’re in now.”
His message was clear: the energy transition is not simply a technical upgrade, but a fundamental shift in how Europe produces, manages, and consumes electricity - requiring coordinated action across governments, investors, industry, and the talent pipeline. 

The grid is no longer just infrastructure; it is the foundation on which Europe’s energy future will be built. Without it, the system cannot evolve. With it, the path to a decarbonized, resilient, and integrated energy economy becomes achievable.

Pedersen & Partners will continue to facilitate industry discussions as part of an ongoing effort to connect market insights with leadership priorities. Understanding the practical requirements of the energy transition is essential for supporting clients in strategy, execution, and long-term planning.