Investing in resilient and efficient grids can deliver sustainable energy for all

Healthy electricity grids, both long distance centralized grids and mini-grids, are critical for achieving sustainable energy for all. Countries have an opportunity to provide leadership on resilient and efficient electricity grids by committing to the Global Energy Storage and Grids Pledge, led by the COP29 Presidency. This pledge is an action that supports achieving country commitments pledged at COP28 to triple renewable energy capacity and double energy efficiency progress by 2030. 

Achieving the renewable energy capacity milestone alone will not be possible if the grids are not improved in parallel. Transmission and distribution networks, which are the backbone of power systems, are increasingly limiting the timely delivery of renewable energy and causing new renewable energy generation to wait for grid connection. Building resilient and efficient grid systems at speed is needed to expedite renewable energy deployments that can deliver on climate goals and country commitments to limit warming to near 1.5°C.

The need for resilient grid also stems from the sheer scale and pace necessary to achieve the tripling renewable energy capacity, which will increase global renewable energy capacity from 3,870 GW in 2023 [1] to reach at least 11,000 GW by 2030 or an average of more than 1,000 GW of renewable energy additions per year. This scale requires more than twice the record high 473 GW of renewable energy annual capacity additions in 2023, which was already a 60% increase from the 295 GW additions in 2022. 

Considering the remote nature of many renewable power projects, rapid development of grid infrastructure and transformation of the existing grids to accommodate higher capacity of fluctuating outputs from solar and wind projects are pre-requisite for achieving the pledge. Human settlements are also often remote, making it challenging to extend the centralized grid in a cost-effective manner and mini-grid expansions are needed to power remote communities particularly across Africa and island nations. Mini-grids can increase resiliency of centralized grids by modularizing disaster recovery when connected to larger grids and financial viability has improved through cost reduction of PV modules, inverters, batteries, inverters and smart meters.[2] However, recent renewable energy growth is quite uneven globally, [3] posing a significant risk to achieving global ambitions and risks making new inequality in terms of receiving clean energy benefits. To deliver sustainable energy to all people, renewable energy deployments and grid and mini-grid expansions are needed across all countries. 

Transmission network limitations to deliver renewable energy power and the inability of the existing distribution network to absorb rapidly growing distributed renewable projects are beginning to form a strong bottleneck in many places. Globally, there is already more than 3,000 GW of renewable energy capacity, waiting to be connected to grid. [4] Overcoming grid bottlenecks require developing new grid infrastructure, modernizing the existing grids and changing the grid operation.

Grid operation is getting more complex. While electricity grids have historically dealt with unidirectional power flow from large power generators to consumers, renewable energy flows are often bi-directional and intermittent. Yet, planning for innovative technologies, digitalized grids, demand shifting, energy storage, neighboring grids interconnectors, and regional interconnectivity can ease handling of these complexities, expedite the transition and reduce overall investment. 

Investing in greater demand flexibility and energy efficiency will pave the way for quicker renewable energy uptake across geographies. Matching electricity demand with available renewable energy generation and reducing demand peaks, will reduce the overall cost of achieving net zero for all consumers while assuring energy security. 

With each challenge the common link is that resilient and efficient electricity grids will undoubtedly be the foundation and backbone of a decarbonized world. This need for efficient and resilient grids will require countries to once again join hands, at COP29, to pledge grid investment and expansion to deliver on the energy and climate goals.

Beyond coming together with a global commitment, the pledge must be supported with action on the ground. The very first action, by countries, is to assess the health of the grid in their respective geographies to plan where, when and how much is needed to build resilient grid while using available resources wisely. More than USD 600 billion of annual investment is required to replace or add over 25 million kilometers of transmission and distribution grid worldwide by 2030. [5]

A grid pledge at COP29 can set a specific and time bound target for electricity grid development and investment, commensurate with the renewable energy capacity expansion goals, and encourage global collaboration and learning. Subsequently, countries can update their Nationally Determined Contribution (NDC) goals to enable actions consistent with the full set of country commitments. 

Enabling policies and regulations should incentivize modern grid technologies and services by lowering investment risks, updating technical standards, expediting permitting processes and creating incentives to lower the cost that enable innovation, efficiency and resilient grid networks and operations that accommodate more renewable energy. 

Investing in grid and mini-grid infrastructure will support countries build a resilient energy future and enable sustainable economic growth. Countries are likely to benefit from improved resilience against climate shocks disrupting power supply, enhanced energy security, and improved grid flexibility offering reliable access to clean and affordable power. Resilient and efficient grid networks are future proof, able to withstand and recover from shocks arising because of the extreme weather events and shifting electricity demand patterns, while also flexible enough to adapt to growing share of renewable capacities.

With leadership from countries, COP29 can be another pivotal moment in empowering the future of renewable energy globally. Let COP29 be remembered as the summit established the foundation for resilient and efficient grid infrastructure.

References

1 IRENA (2024), Renewable capacity statistics 2024, International Renewable Energy Agency, Abu Dhabi. 

2 Mini-grids Partnership (2024), State of the Global Mini-Grids Market 2024, Sustainable Energy for All, Vienna. 

3 IRENA (2024), Renewable capacity statistics 2024, International Renewable Energy Agency, Abu Dhabi. 

4 IEA (2023), Electricity Grids and Secure Energy Transitions, IEA, Paris. License: CC BY 4.0

5 IEA (2024), From Taking Stock to Taking Action, IEA, Paris , License: CC BY 4.0