Call for coordinated global action on grid development

Grid readiness is the biggest single threat to realising net zero in the power sector, TAQA and Bloomberg report in a new study.

The ‘Future of Utilities’, which was published by the Abu Dhabi utility (Abu Dhabi National Energy Company, TAQA) and Bloomberg Media to coincide with the World Economic Forum meeting, found that confidence in achieving 2030 targets is low in the utilities sector based on the current trajectory and there needs to be immense transformation.

Poor partnerships with technology providers and low awareness of the latest technology alternatives are the largest impediments to innovation.

And the top threat is the complexity of integrating renewables, with others including the vulnerability of supply chains and lack of access to capital.

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“The utilities sector is on the frontlines of the global energy system, and it is therefore uniquely placed to shape the transition to a low carbon future,” says Jasim Husain Thabet, Group CEO and Managing Director of TAQA, one of the largest listed integrated utilities in Europe, the Middle East and Africa, commenting on the findings.

“As the utilities community responds to that challenge with increased urgency, the insights from this report can serve as a lens to guide decision making and validate perspectives.”

The study was based on a survey of almost 600 experts from across the energy sector worldwide, with the majority, 80%, agreeing that utilities are actively pursuing a future geared towards net zero.

However, with less than half confident that 2030 targets would be met with the status quo, almost all felt that a profound change is not only required but also imminent.

With calls for decentralised energy systems accelerating, consumer empowerment is considered vital for the success of utilities in 2030, with evolutions in operating models and customer relations as consumers increasingly adopt self-generation.

The study found that regulation is largely seen as an enabler of net zero, with facilitating renewable integration seen as the top benefit, and only 5% reported that their regulatory environment is a hindrance.

The complexity of integrating renewables as a top threat to achieving net zero goals was cited by half of the respondents, although there are variations both by region and role.

For example, investors considered regulatory challenges while policy advisers cited threats to digital security and cyberattacks.

Nevertheless, this indicates the need for a stronger focus on innovation with more effective collaboration and communication.

To put this into context BloombergNEF in its New Energy Outlook 2022 projected a $21 trillion investment by 2050 to expand and refurbish the global electricity system.

Additionally, its Energy Transition Investment Trends 2023 expects electrified transport, renewable energy and grids to dominate investments to 2030, comprising almost three-quarters of the annual combined share – a trend set to escalate in the 2030s with an estimated annual investment of $6.88 trillion and a further increase to $7.87 trillion by the 2040s.