This paper presents a new power sector module, called EUTGRID, which is coupled with the long-term energy model POLES to deliver a suitable framework for considering grid aspects in energy modelling allowing for more distinct analysis of energy technology development and energy policy. It includes a mechanism of investment in transmission grids based on nodal prices together with a DC-load flow and a more detailed description of the European transmission grid. The methodology goes beyond “conventional” energy systems modelling, where the electricity grid is usually represented as a copper plate. The results show that within a climate policy scenario, the grid investment needs reach 454b$ for 2010–2080 as regions with high share of VREs require new interconnections. The role of the transmission grid in reducing variable system costs and VREs curtailment is also assessed. Delaying the investments may result in non-distributed energy and the need of more back-up carbon technologies.