Grid development and reform needs to speed up – IEA
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The IEA in a new report points to signs that grids are becoming a bottleneck to clean energy transitions and that delayed action means prolonging reliance on fossil fuels.
To overcome this, the report, Electricity Grids and Secure Energy Transitions, calls for “an unprecedented level of attention from policy makers and business leaders to ensure grids support clean energy transitions and maintain electricity security”.
The report, the second in an ongoing series focussed on the grids, is posited to present a first-of-its-kind global stocktake of the world’s electricity grids, finding that grid length has almost doubled over the past 30 years at a rate of about 1 million km/year, driven by expansion of the distribution networks.
They also are ageing and in advanced economies tend to be older, with infrastructure that has sometimes been operational for 50 years or more, mainly due to early electrification.
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To achieve countries’ national energy and climate goals, the world’s electricity use needs to grow 20% faster in the next decade than it did in the previous one.
This means adding or refurbishing a total of over 80 million km of grids by 2040, which is the equivalent of the entire existing global grid.
This in turn also means an increase in investment, for example by 2030 nearly doubling to over US$600 billion per year after over a decade of stagnation at the global level.
IEA executive director Fatih Birol commented in a press conference: “The problem is the investments. In the last ten years, renewable generation investments more than doubled, but the amount of investment in grids remained flat, about $300bn in the last ten years.”
Birol added that to spur investments and increase returns on these investments, governments must deploy strategic planning to grid expansion and must ensure grid operators and companies are incentivized to take the necessary steps.
The report suggests focus should be on modernising distribution grids and establishing new transmission corridors to connect renewable resources – such as solar PV projects in the desert and offshore wind turbines out at sea – that are far from demand centres like cities and industrial areas, the report states.
Pointing to the urgency to address the grids, the report notes that at least 3,000GW of renewable power projects are waiting in grid connection queues – about half of that in advanced stages of development – and equivalent to five times the amount of solar PV and wind capacity added in 2022.
Moreover, a ‘grid delay case’ developed for the report suggests that with slower uptake of renewables and higher fossil fuel use, the cumulative CO2 emissions from the power sector to 2050 would be 58Gt higher than a scenario aligned with national climate targets.
This would mean that the global long-term temperature rise would go well above 1.5oC, with a 40% chance of exceeding 2oC.
Actions to secure grids for the future
Among actions to secure the grids, the report highlights the need for regulation to be reviewed and updated to support not only deploying new grids but also improving the use of assets.
In addition, planning for transmission and distribution grids needs to be further aligned and integrated with broad long-term planning processes by governments.
Strategic actions that can make a difference include expanding and strengthening grid interconnections within countries, between countries and across regions to make electricity systems more resilient and enable them to better integrate rising shares of solar and wind power.
Governments should back large-scale transmission projects and grid developers and operators are urged to embrace digitalisation to enable the grids of the future to be more resilient and flexible.
Building out grids also requires secure supply chains and a skilled workforce, the report states.
Governments can support the expansion of supply chains, which are currently showing tightness, by creating firm and transparent project pipelines and digital skills should be integrated into power industry curricula.
