IEA report finds investment in smart grids needs to more than double through 2030

Published
February 28, 2023
Last Updated
March 15, 2023
A city with smart grids at night

According tothe latest report release by InternationalEnergy Agency (IEA), investment in electricity grids saw a significantrise of 6% in 2021, with developed countries increasing their investments tofacilitate and encourage the use of electricity for buildings, industries, andtransportation, as well as to accommodate the variability of renewable energysources in the power system. Even though there has been some economic recoveryfollowing the disruption caused by the Covid-19 pandemic, there is still a needto more than double the investment in smart grids by 2030 to align with the NetZero Emissions by 2050 Scenario. This is particularly crucial for emergingmarkets and developing economies.

The increasing demand of clean, reliable and resilient electricity networks creates more urgent need for smart grids

The report explains that smart grids are crucial to secure and reliable power systems and are set to capture an increasing share of power sector investment in recognition of their role in supporting modern power systems and clean energy transitions. However, some regions are facing strains and pressures in their power systems due to the faster growth of variable renewables and electrification than smart grid construction. This has led to frequent grid overload, renewables curtailment, and limits to accessing electricity. Long grid planning and permitting times are also causing insufficient transmission capacity, leading to higher renewables curtailment and redispatch costs.

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A city with smart grids connectivity at night
A city with smart grids connectivity at night

The increasing demand of clean, reliable and resilient electricity networks creates more urgent need for smart grids

The report explains that smart grids are crucial to secure and reliable power systems and are set to capture an increasing share of power sector investment in recognition of their role in supporting modern power systems and clean energy transitions. However, some regions are facing strains and pressures in their power systems due to the faster growth of variable renewables and electrification than smart grid construction. This has led to frequent grid overload, renewables curtailment, and limits to accessing electricity. Long grid planning and permitting times are also causing insufficient transmission capacity, leading to higher renewables curtailment and redispatch costs.

Read Full Report
Three people seating on the roof talking with each other

The continuous growth of grid modernization and digitalization

According to the report, around 75% of investment in digital infrastructure is dedicated to the distribution sector, which includes the deployment of smart meters and automation of various elements through sensors and monitoring devices. Digital investment in distribution also covers network digital twins and alternatives like flexibility services and distributed stand-alone storage systems. Lastly, investment in electric vehicle public charging infrastructure increased by over 20% in 2021, but it still accounts for less than 5% of total distribution investment.

Resilience and sustainability play important roles in electricity grids

Last but not least, the report discusses the need for power utilities to develop resilience against potential hazards such as extreme weather events, wildfires, and cybersecurity risks. This can be achieved through measures such as weather-predictive services, sensor deployment, and cybersecurity risk assessments. Additionally, electricity grid operators should focus on achieving the UN Sustainable Development Goals by reducing raw material usage, adopting sustainable materials, implementing circular solutions for dismantled grid assets, and protecting biodiversity. These measures can reduce environmental footprints and increase safety, especially in the context of scarce and geographically concentrated mineral resources.

Read Full Report
A city connected with smart grids at night
A city connected with smart grids at night

Resilience and sustainability play important roles in electricity grids

Last but not least, the report discusses the need for power utilities to develop resilience against potential hazards such as extreme weather events, wildfires, and cybersecurity risks. This can be achieved through measures such as weather-predictive services, sensor deployment, and cybersecurity risk assessments. Additionally, electricity grid operators should focus on achieving the UN Sustainable Development Goals by reducing raw material usage, adopting sustainable materials, implementing circular solutions for dismantled grid assets, and protecting biodiversity. These measures can reduce environmental footprints and increase safety, especially in the context of scarce and geographically concentrated mineral resources.

Read Full Report

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