Only then will Europe be able to boost competition in a body-wide market, energy security, climate protection and the share of renewable energy generation, Energy Commissioner Guenther Oettinger said in a statement.
"Energy infrastructure is key to all our energy goals," he said. "It is therefore essential that we pull together our resources and accelerate the realization of EU priority projects."
The money will come from the EU and the industry, which would have to shoulder at least $100 billion of the total costs. It was unclear how much money the EU would chip in but Oettinger said he would ask for nearly $1.1 billion in EU funding per year until 2016 to provide incentives to help finance the body's new energy infrastructure.
Brussels wants to strengthen cross-border connections to link isolated member states, such as the Baltics or nations in Eastern Europe, to the Western European energy markets.
"A transport (of power or gas) from West to East or from North to South is not yet technically possible in Europe," Oettinger told a news conference Wednesday in Brussels.
It highlighted several priority projects it wants to pursue over the next years, including:
-- A North Sea offshore grid to deliver renewable power to consumers in big cities. The commission wants the grid to integrate hydro-electric power storage plants in the Alps and the Nordic countries, to balance the fluctuating renewables.
-- Interconnections linking Spain and France, and southern and northern Germany, to transport power generated from wind, solar, hydro to the rest of the continent.
-- Interconnections linking the Baltics to the European power and natural gas markets.
-- A gas pipeline linking the Caspian Sea gas reserves to Europe: This so-called "southern corridor" is the route of the planned EU-backed Nabucco pipeline. "Oil has been transported from Azerbaijan to Europe for the past 140 years. It should be possible to also transport gas to Europe," Oettinger said.
-- A north-south gas link to remove bottlenecks in Western Europe.
Brussels will identify concrete projects in 2012 and suggest to the 27 member states to enable the fast-tracking of key energy infrastructure investments, Oettinger said.
The commissioner likened the transformation from the aging European grid to a smart energy infrastructure to the communications sector, which has long switched from analog to digital.