Global annual investments in energy grids need to double to more than $600 billion a year by 2030 if the world is to achieve the national climate and energy goals, the International Energy Agency (IEA) said in a report on Tuesday.
The world needs major changes to the grid and reaching net-zero targets will also require adding or replacing 80 million kilometers of power lines by 2040 - an amount equal to the entire existing global grid - according to IEA's new report Electricity Grids and Secure Energy Transitions.
To achieve countries' national energy and climate goals, the world's electricity use needs to grow 20% faster in the next decade than it did in the previous one, the Paris-based agency noted in the report.
The IEA warned that grid expansions and upgrades globally are not keeping pace with the surge of clean energy technologies including solar, wind, electric cars, 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 agency says.
Grids could be the weak link in the energy transition as they have started to become a bottleneck for the expansion of renewable energy sources.
At least 3,000 gigawatts (GW) of renewable power projects, including 1,500 GW in advanced stages of development, are waiting in grid connection queues. This is equivalent to five times the amount of solar PV and wind capacity added in 2022, the IEA said.
"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," IEA Executive Director Fatih Birol said in a statement.
"We must invest in grids today or face gridlock tomorrow."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More