Ministers have been urged to “open their eyes” to the need to build a vast network of new electricity grids to allow countries to hit climate goals, the chief of the world’s energy watchdog has said.
Fatih Birol, the executive director of the International Energy Agency (IEA), has warned that the equivalent of the entire global electricity grid – 80m km of grid – needs to be added or refurbished by 2040 to hit climate targets and ensure reliable power supplies.
Global investment in energy grids needs to double to more than $600bn (£492bn) a year by 2030 to hit national climate targets after “over a decade of stagnation at the global level”, the IEA said.
Demand for electricity is predicted to surge as many consumers switch to low-carbon alternatives to traditional products, such as heat pumps and electric vehicles. Companies in heavily polluting industries, including steelmakers, are also looking to electrification to help them decarbonise.
The Inflation Reduction Act introduced by the US president, Joe Biden, has encouraged investors to back renewable projects in America, while Europe is attempting to respond. There are fears that these efforts could be hampered by poor connections between where power is generated and where consumers live, as well as a logjam in hooking up to national grids.
Renewable energy developers have repeatedly complained about their struggles to gain connections for their projects to the grid and accused the government of lacking vision. In the UK, some projects face waits of up to 15 years, and National Grid is attempting to cut delays.
The IEA said renewable projects offering at least 3,000 gigawatts of power were waiting for connections to their national grids – five times as much as the solar and wind capacity added globally in 2022.
Birol told the Guardian: “Governments need to open their eyes – if we want clean electricity, we not only need clean electricity generation, but we need to build grids. It has been a blind spot of the clean energy transition programmes of governments.”
There are also concerns over a decline in grid investment in “emerging and developing economies, excluding China”.
The IEA warned that delays in grid investment and reforms would increase the reliance on gas, pushing up carbon emissions and putting a goal of limiting global heating to 1.5C above pre-industrial levels “out of reach”. It said that the world’s electricity use needed to grow 20% faster in the next decade than it did in the previous one to hit stated goals.
The agency said governments needed to support the expansion of supply chains and extra training to upgrade grids, and planning systems needed to be improved.
It recommended better coordination between planners of grid upgrades and renewable projects, improved processes to engage with the public on planning, and the increased use of digital tools to counter intermittency, when renewable power supply does not match demand.
In the UK, National Grid last year laid out plans for a £54bn upgrade of the electricity network to accommodate the growth in the offshore wind industry, the biggest investment since the 1960s. However, last month’s failed energy auction saw no new offshore windfarms secure contracts, prompting criticism of Rishi Sunak’s government.
Birol last month warned that countries and companies planning to expand their fossil fuel production were taking “very unhealthy and unwise economic risks” as their investments may not be profitable.
Oil prices have since risen sharply in the fallout from the Israel-Hamas conflict, to more than $90 a barrel. Birol said: “If we see a physical disruption of oil in the markets, as usual, we are there to comfort the markets.”
