Urban grids are ‘feeling the heat’, IEA reports

Power grids in many cities are being pushed to the edge of their operating limits with increased cooling demand and other climate change impacts, the IEA has reported.

In a new report on the energy transition in cities released for the G7 Climate, Energy and Environment Ministerial May meeting in Turin, Italy, the IEA points to factors such as the increasing demand for cooling as the world becomes hotter and the rapid urbanisation taking place as making a focus on grid modernisation and digitalisation crucial for sustainable urban futures.

For example, the installed capacity of space cooling equipment is projected to nearly double by 2030 from 850GW today and to double again by 2050, with most of it in urban areas.

In China alone, in 2023 a 70% year-on-year increase in air conditioner sales was recorded.

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That demand also drives peak demand, with cooling accounting for over 70% of peak electricity demand in the hottest regions, and a 1^oC increase in temperature globally calculated to lead to an almost 4% average increase in peak demand.

Around 70% of cities are already experiencing the negative impacts of extreme temperatures and frequent storms of increasing intensity, which can push power infrastructure to the edge of its operating limits, states the IEA in its report.

At the same time with the transition away from fossil fuels with renewable energies and the electrification of transport, heat and industry, the grids also will need to become increasingly smart.

As cities become focal points for energy consumption, efficient grid management becomes paramount in addressing urban energy challenges, the report continues, reiterating the need for a more than doubling of global annual investment in the grids to $750 billion by 2030 from around $330 billion today and with about three-quarters of this to the distribution grids.

Urban growth

The report Empowering Urban Energy Transitions indicates that cities currently account for around three-quarters of global energy consumption and 70% of greenhouse gas emissions, and their contribution is set to rise.

By 2050 urban growth is expected to be equivalent to adding the combined land area of Germany, Italy and Japan.

With urban areas contributing more than 80% of global GDP, the power grids needs to adapt rapidly to manage both today’s constraints and tomorrow’s challenges, the report continues.

For example, bottlenecks in power grids delay housing developments, prevent the completion of new renewable energy projects and can put the uptake of customer-owned clean energy resources at risk, such as rooftop PV systems and EVs.

The report points to the need in addition to the physical infrastructure, to take advantage of connected technologies, with cities having the right level of density and granularity for optimisation and aggregation of demand side energy assets at the building, neighbourhood and community levels.

Analysis cited by the IEA suggests that digitally enabled technologies could reduce the curtailment of variable renewable energy systems by more than 25% by 2030, increase system efficiency by 30% and reduce costs by up to 30% for customers.

Improved access to and use of data for decision making would also support faster and more targeted implementation of energy and climate goals and help align city and power system planning.

However, while regulatory and technological barriers stand in the way of maximising the use of data, many of these barriers could be overcome through closer international collaboration, the report indicates.

The report offers four priority areas for policymakers for actions in urban environments – placing people at the centre, supporting data-driven integrated planning, addressing specific areas to create a supportive environment and strengthening international cooperation.