The world’s electricity systems could dump an extra 58 billion tonnes of carbon dioxide into the atmosphere between 2030 and 2050 unless countries double their grid renewal investments to more than US$600 billion per year, the International Energy Agency (IEA) concludes in a special report issued this week.
The added emissions are “equivalent to the total CO2 emissions from the global power sector over the past four years,” enough to put average global temperature rise well above the 1.5°C target in the 2015 Paris climate agreement, the IEA warns.
To support countries’ climate and energy security targets, power grids around the world will have to build or replace an estimated 80 million kilometres of power lines by 2040, the equivalent of all the transmission capacity now in place around the world. That ambitious target makes grid renewal a major challenge on the road to a low-carbon future, the Paris-based agency says, in what it describes as a “first-of-its-kind stocktake” of global grid capacity.
At present, grid renewal is “not keeping pace with the rapid growth of key clean energy technologies such as solar, wind, electric cars and heat pumps,” the IEA says in a release. “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.”
Doubling Grid Investment to $600B
The buildout prescribed in the country-by-country analysis would require annual grid investment to double to more than US$600 billion per year. The report also calls for changes in the way grids are managed and regulated.
“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 release. “We must invest in grids today or face gridlock tomorrow.”
That gridlock is already happening, the report concludes, with 1,500 gigawatts of renewable energy projects waiting to be connected to transmission. “This is five times the amount of solar PV and wind capacity that was added worldwide last year,” the IEA says.
In the United States alone, congestion cost the grid $13 billion in 2021 and an estimated $22 billion in 2022, according to [pdf] an estimate by Grid Strategies LLC.
Even so, an early October analysis by the Ember climate consultancy showed climate pollution from the global power sector levelling off in the first half of this year with emissions growing only 0.2%, “thanks largely to the planet-spanning embrace of wind and solar,” Canary Media wrote. The numbers showed emissions falling significantly in the European Union, the United States, Japan, and South Korea, while increasing in China and India.
“Power production may be dirty, but it’s a mess we have learned how to clean up: replace fossil fuel generation— in particular, coal— as fast as possible with wind, solar, batteries, and possibly even nuclear reactors or hydropower, if you can get them built,” the news story stated. “That formula has helped create the current plateau in power sector emissions,” with carbon-free sources delivering 40% of global electricity in the first half of the year and solar and wind supplying 14%.
‘Grid Delay’ Could Threaten Emission Gains
But capacity bottlenecks are still emerging as key energy end uses continue to electrify, leading to new and heavier demands on legacy power grids. “The adoption of new technologies such as electric cars and heat pumps means electricity is expanding into realms previously dominated by fossil fuels,” the Paris-based IEA writes. “Meanwhile, countries are adding renewable energy projects at a fast rate—requiring more power lines to connect them to electricity systems and high-functioning distribution grids to ensure reliable supplies for end customers.”
Those prospective gains are at risk, and another 58 billion tonnes of needless CO2 emissions are the result, under a new scenario the IEA developed for this report. The Grid Delay Case projects the result if grid investment falls short or regulatory reforms move too slowly.
The scenario “shows transitions stalling, with slower uptake of renewables and higher fossil fuel use,” states the executive summary of the report. “At a time of fragile natural gas markets and concerns about gas supply security, failing to build out grids increases countries’ reliance on gas,” while increasing the risk of “economically damaging outages” that already cost countries about $100 billion per year, or 0.1% of global GDP.
“The most important barriers to grid development differ by region,” the IEA says, ranging from the financial health of utilities, to limited access to capital, to public acceptance of projects and the need for regulatory reform. But while the solutions may not be easier, they aren’t unknown.
“Financial barriers can be addressed by improving the way grid companies are remunerated, driving targeted grid funding, and increasing cost transparency,” the agency writes. And policy-makers can “speed up progress on grids by enhancing planning, ensuring regulatory risk assessments allow for anticipatory investments, and streamlining administrative processes.”
Straining the U.S. Power Supply
In the weeks leading up to the IEA report, grid operators were on Capitol Hill in Washington, DC to brief legislators on the challenges of decarbonizing the sector while ensuring a reliable power supply. “Appearing before the Energy, Climate, and Grid Security Subcommittee of the U.S. House of Representatives, officials from all seven of the country’s grid operators said multiplying electricity demand will strain the power supply as the sector shifts from burning fossil fuels towards renewable sources,” Reuters reported.
“We are seeing the potential for the rate of electricity demand to significantly increase in the future due to the electrification of transportation and heating sectors,” said Frederick Bresler, vice president of market services for PJM Interconnection. Even with renewable technologies and battery storage coming online, operators said they couldn’t see maintaining reliable operations without continued reliance on coal and natural gas, with Midcontinent ISO’s Senior Vice President Todd Ramey warning that reliability will be “compromised” if polluting generators are retired before they can be replace with clean capacity.
But electricity systems are already up against the accelerating impacts of those energy choices. “Once almost unthinkable, we must now plan for ‘once in a century’ extreme weather events on a continual basis,” said Paul Suskie, general counsel of Southwest Power Pool.
Renewables to the Rescue
About a week later, Sara Baldwin, senior director of the Electrification Program at Energy Innovation, had some advice on how to counter operators’ concerns about the transition off carbon. “Just as the introduction of the first smart phone prompted skepticism about its future in a world dominated by landlines, so do these new resources,” she wrote, in an opinion piece for Utility Dive. “This is especially true when it comes to their ability (and incentives) to provide essential reliability services, or ERS.”
In the era now ending, when grid operators could count on large coal-fired, nuclear, or hydroelectric plants for power generation, “the physical attributes of those machines provided the grid services needed for an AC grid,” Baldwin explained. “Their large, spinning mass provides inertia, which contributes to stability.”
Resources like solar and wind behave differently, connecting to the grid via inverters that convert their output from direct to alternating current. While the change in approach makes many operators nervous, U.S. grids with more renewables and energy storage fared well earlier this year, during the hottest summer on record. “These resources helped balance the grid when demand for cooling combined with extreme temperature stress on grid infrastructure.”
Baldwin said those capabilities will need further study before renewables can replace the aging coal and gas plants on the system. “We need greater focus on strategies to integrate renewables into markets and compensate them in a way that reflects their ability to respond,” she wrote. But “ideally, a combination of carrots and sticks can influence grid reliability and performance by reflecting real-world operating characteristics of various technologies, allowing and encouraging resources to ‘show up’ with the requisite grid services."
This article originally appeared in The Energy Mix
