IEA: More T&D Needed to Decarbonize Global Electric Systems

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global annual spending on electric transmission and distribution (T&D) projects needs to more than double--to an estimated $600 billion per year--by 2030, said a new report from the International Energy Agency (IEA) (Paris, France). The IEA believes this will allow more renewable-energy generators to connect with the electric grid as part of the world's fight against global warming.

Money isn't the only major change advocated by the agency in its first report on T&D grids, Electric Grids and Secure Energy Transitions, released October 17. Major changes in how grids are permitted and regulated also are needed to shorten the long permitting process for siting transmission projects, it 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 accompanying the release of the report. "This report shows what's at stake and needs to be done. We must invest in grids today or face gridlock tomorrow."

In its work to fight global warming, the agency has focused on building renewable-energy generation, chiefly solar and wind, to lower carbon dioxide (CO2) emissions. It also has highlighted the deleterious impact of continued construction and operation of coal-fired generating capacity. Worldwide spending on so-called "clean" electricity has surged in recent years, though the IEA has said even larger investments are needed to meet the goal of the Paris Agreement of 2015, which sought to limit the world's long-term temperature gain to 1.5 to 2 degrees Celsius over pre-industrial times. For more on this, see May 25, 2023, article - IEA Reports Surge in Clean Energy Spending, Says Even More is Needed.

But all of that planned and current renewable electricity still needs a way to get from where it is generated to where it will be used. That's the critical link IEA explores in its new report. The agency said 80 million kilometers, or about 50 million miles, of T&D lines will need to be built or refurbished by 2040 to meet the needs of an increasingly electrified economy.

That 80 million kilometers is equal to the total amount of T&D lines currently in service around the world. It took the worldwide electricity business over a century to build that many miles of T&D lines; now, the IEA said, it needs to double that mileage in less than two decades.

Click on the image at right to see the growth of the world's T&D mileage since 1971, both in emerging and mature economies.

The report identified a large and growing queue of renewable-generation projects awaiting the green light. Nearly 1,500 gigawatts (GW) of this generation are in advanced stages of development. This is five times the amount of solar photovoltaic (PV) and wind capacity that was added worldwide last year. While the global installed capacity of renewables has surged, and is expected to continue surging, the report noted that the same cannot be said for the world's T&D infrastructure.

Not only does the world need a significant amount of new T&D lines, but aging lines must be refurbished or replaced, the agency said. Most of the world's transmission lines (more than 69 kilovolts in capacity) are over a decade old. The same is true for the world's distribution lines (69 kilovolts or fewer). With each passing year, those existing T&D assets get closer to reaching their expected lifespan.

Click on the image at right to see a graphic of the relative age of transmission and distribution lines in various countries around the world.

The IEA report said that efforts to tackle climate change and ensure reliable supplies of electricity could be at risk, unless policymakers and companies quickly improve and expand the world's electricity grids. Investment in T&D assets is not keeping pace with the rapid growth of key clean-energy technologies such as solar and wind generation, electric vehicles and heat pumps, it added.

Investment in T&D assets in mature economies like the U.S., Canada and Japan reached an average of about $170 billion per year over the 2020-2022 period, up from slightly less than $140 billion per year during the 2014-2016 period. However, annual T&D spending in China and other emerging economies declined over that period.

Click on the image at right to see average annual investments in T&D assets by mature economies, and by China and other emerging economies, over the 2014-2022 period.

The report took a detailed look at what certain countries invested in transmission assets in 2022, and what they need to invest each year in the future to meet their pledged annual reduction in CO2 emissions. Sizable increases are needed in China, the European Union, Japan and Brazil, it found.

Click on the image at right to see actual spending on transmission assets in 2022, and what level of spending those countries would be needed to fulfil their CO2 reduction pledges.

A new scenario developed for the report, the Grid Delay Case, examines what would happen if grid investment is not scaled up quickly enough and regulatory reforms continue to drag. Cumulative CO2 emissions between 2030 and 2050 would be almost 60 billion tonnes higher due to increased 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 degrees Celsius, with a 40% chance of exceeding 2 degrees Celsius.

One key to meeting the world's T&D challenges is to streamline permitting and siting practices. New grid infrastructure often takes 5 to 15 years to plan, permit and complete, the report said, far more than the one to five years needed to permit and build new renewable-generation projects.

In the U.S., the permitting and siting process for transmission lines has long been a headache for companies developing renewable generation or transmission projects, as well as for utilities seeking to purchase those green electrons. In an announcement unrelated to the IEA report, the U.S. Department of Energy (DOE) (Washington, D.C.) on October 18 said it would make available about $3.5 billion in federal funding for 58 transmission projects across 44 states so that renewable generation can be connected to the grid and the grid resilience and reliability can be increased. The funding comes from the Infrastructure Investment and Jobs Act, enacted in 2021, and is expected to be matched by more than $8 billion of public and private investments.

For more information, see October 20, 2023, article - U.S. to Fortify T&D Grid with $3.46 Billion in Federal Grants.

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