The IEA’s latest report has found signs that electricity systems are not keeping pace with the rapid growth of key clean energy technologies such as solar, wind, electric vehicles (EVs) and heat pumps. Without greater policy attention and investment, shortfalls in the reach and quality of grid infrastructure could put the goal of limiting global warming to 1.5°C out of reach and undermine energy security, the report warns.

Achieving all national climate and energy goals will require adding or replacing 80mn km of power lines by 2040 – an amount equal to the entire existing global grid – according to a country-by-country analysis carried out for the report. Major changes to how grids operate and are regulated are also essential, while annual investment in grids needs to double to more than $600bn/y by 2030, the report notes.  

The IEA has identified a large and growing queue of renewables projects waiting for the green light to be connected to the grid, pinpointing 1,500 GW worth of these projects that are in advanced stages of development. This is five times the amount of solar photovoltaics (PV) and wind capacity that was added worldwide last year.

‘The recent clean energy progress we have seen in many countries is unprecedented and cause for optimism, but it could be put in jeopardy if governments and businesses do not come together to ensure the world’s electricity grids are ready for the new global energy economy that is rapidly emerging,’ commented IEA Executive Director Fatih Birol. ‘We must invest in grids today or face gridlock tomorrow,’ he said.  

The role of electricity is set to continue growing strongly, increasing the demands on grids. The adoption of new technologies such as EVs and heat pumps means electricity is expanding into realms previously dominated by fossil fuels. Meanwhile, countries are adding renewable energy projects at a fast rate – requiring more power lines to connect them to electricity systems and high-functioning distribution grids to ensure reliable supplies for end customers. This includes the digitalisation of distribution grids and enabling more flexibility through demand response and energy storage.

A new scenario in the IEA’s report, The Grid Delay Case, examines what would happen if grid investment is not scaled up quickly enough and regulatory reforms for grids are slow. It finds that cumulative CO₂ emissions between 2030 and 2050 would be almost 60bn tonnes higher due to a slower rollout of renewables resulting in higher fossil fuel consumption. This is equivalent to the total CO₂ emissions from the global power sector over the past four years. It would put the global temperature rise well above the Paris Agreement target of 1.5°C, with a 40% chance of exceeding 2°C.

The report identifies several actions that can make a difference, including expanding and strengthening grid interconnections within countries, between countries and across regions to make electricity systems more resilient and allow them to better integrate rising shares of solar and wind power. The report recommends that governments back large-scale transmission projects to ensure grids are prepared for further strong growth in renewable power. It also urges grid developers and operators to embrace digitalisation to enable the grids of the future to be more resilient and flexible.

The need for decisive action is urgent because of the long lead times for modernising and extending grids, the report warns. New grid infrastructure often takes 5–15 years to plan, permit and complete – compared with 1–5 years for new renewables projects and less than two years for new charging infrastructure for EVs.

Improving and expanding grid infrastructure in countries worldwide will require stronger international collaboration. Emerging and developing economies, excluding China, have seen a decline in grid investments in recent years, despite robust electricity demand growth and ongoing efforts to meet energy access goals, the report concludes.  

US investment plans  

Meanwhile, US President Joe Biden’s administration has announced $3.46bn in funding for 58 projects across 44 states to strengthen electricity grid resilience and reliability across the US. As the largest ever direct investment in the grid, the grants are to protect it from extreme weather and fires and to connect transmission systems with more electricity from renewable energy sources, the US Department of Energy announced.