Want a clean energy transition? Better start putting cash into electrical grid
Spending needs to double to $600B by 2030 if we want to stay within 2°C warming
Renewable energy investments continue to rise, but a key component of our planned zero-carbon future is being ignored, and could endanger the future of Earth: Energy grids.
The International Energy Agency (IEA) concluded as much in a report it put out yesterday. The intergovernmental group found that some 80 million kilometers (49.7 million miles) of power lines will need to be replaced or added globally by 2040 – an amount the IEA said is equivalent to the entire existing global grid.
In order to do that, annual global grid investment needs to double to more than $600 billion a year by 2030, and the alternative isn't great: If the world fails to get its grid in gear, limiting long-term global temperature increases to 1.5°C will be impossible, and there's a 40 percent chance global temperature rise would surpass 2°C.
"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," said IEA executive director Fatih Birol.
The progress Birol is referring to are IEA findings that global investment in renewable energy has nearly doubled since 2010. In the US, renewable energy has become cheaper than coal across much of the nation, and 2023 is predicted to be the first year that investment in solar energy projects surpasses new fossil fuel spending.
That said, the IEA found that there are more than 3,000 gigawatts of renewable energy projects in pipelines across the globe, and around half of those are in advanced stages of development. Regardless of their status, none of the 3,000 GW of renewables have found a grid connection. Per the IEA, "this shows that grids are becoming a bottleneck for transitions to net zero emissions."
Too little, too late?
We had better get with the program – new grid infrastructure usually takes between five and 15 years to complete, the IEA said, while renewable energy projects take just one to five years on average.
In other words, we're already way behind where we need to be. The IEA has recommendations for policymakers to address the shortfall in grid investment, like securing supply chains that have been weakened since the COVID-19 pandemic and increasing digitalization, but whether the world can make such a drastic leap in such a short time is unclear at best. We asked the IEA for its thoughts on the matter but haven't heard back.
The IEA said that grid investment around the world has declined in recent years (with the exception of China), but this shouldn't catch anyone by surprise.
- 2050 carbon emission goals need nuclear to succeed, says International Energy Agency
- The US grid is ready for 100% renewables, says DoE
- Energy efficiency, staffing keep datacenter operators awake at night
- The alternative to stopping climate change is untested carbon capture tech
We've known for a while that increased grid strain from electric vehicles, heat pumps and even smart thermostats are a growing problem. At the same time, datacenter construction is booming due to increased computing requirements to the point where Northern Virginia and Washington, DC, the most congested datacenter region in the US, is unable to transmit enough power to keep up with additional construction.
The UK hasn't been able to escape the bit barn crunch either, with power transmission problems arising in the London area that have caused moratoriums on new housing construction to prioritize electricity for datacenters.
Keep in mind none of the grid stress from more power-hungry datacenters accounts for increased electrification from other sources. In short, our aging grids are a problem.
All the while, the Biden administration has allotted just $13 billion to modernize the US electrical grid. Whether that'll be enough is unclear, and the energy strain only continues to build. Without new grid capacity to add in all the distributed renewable energy projects, more electricity means more fossil fuels being burned - another problem we're well aware of.
2023 is the first year solar investments might exceed fossil fuel spending, yet it's not because oil and gas is on the way out: Investment in fossil fuels rose 15 percent from 2021 to this year, and while it's outpaced by renewable investments the IEA said that level of spending means the world's not on course to meet 2030 net zero goals. The only way to change that, the IEA concludes, is to get the grid expanded.
"This report shows what's at stake and needs to be done. We must invest in grids today or face gridlock tomorrow," said Birol. ®