LONDON, July 10, 2024 /PRNewswire/ — Public grid capacity constraints risk slowing the energy transition toward net zero, with fast-growing distributed renewable energy assets such as solar micro-grids and battery storage increasingly failing to connect to the grid, needed to take full advantage of unpredictable renewable generation. According to a new report from global technology intelligence firm ABI Research, aggregated global investments in public grid digitalization and transmission network capacity expansion will need to reach over US$4 trillion by 2030 to maintain the energy transition toward net-zero energy targets.
“To maintain the integration of exploding renewable energy capacity, public grids need to be expanded urgently in terms of adding huge amounts of sheer transmission capacity (think cabling and substations) but also modernized in terms of both far-reaching digitalization and a more decentralized energy network topology,” explains Dominique Bonte, VP End Markets and Verticals at ABI Research.
According to a recent announcement from the International Energy Agency (IEA), global spending on grids is expected to reach US$400 billion in 2024, showing systematic growth compared to flat yearly investments of around US$300 billion pre-COVID-19. However, grid investments will need to accelerate significantly in the coming years to reach the targets mentioned above, requiring new funding mechanisms and more flexible regulation.
A growing share of public grid investments is allocated to digitalization, which is critical for enabling addressing demand-response fluctuations and flexibly redirecting energy from where it is generated to where it is needed, in other words making energy networks more agile. Grid digitalization solutions offered by key smart energy technology vendors such as Siemens, Schneider Electric, and GE Vernova include transmission and distribution automation, networking and communications, analytics for asset performance and quality management, and advanced distribution and energy management systems. Energy digital twins will be critical for improved cooperative network planning and optimization.
“A good example of the severity of the impact of public grid constraints on the digital economy is the limitations imposed on the deployment of new data centers in cities like Frankfurt, which is failing to expand its energy network fast enough to accommodate exploding IT infrastructure, mainly driven by power-hungry AI computing. This risks slowing down much-needed data center capacity expansion and endangering net-zero targets of hyperscalers such as Google, AWS, and Microsoft,” Bonte concludes.
These findings are from ABI Research’s Will Public Grids Become the Bottleneck for the Adoption of Industrial Microgrids, Electrification, and Reaching Net-Zero Targets? application analysis report. This report is part of the company’s Smart Energy for Enterprises and Industries research service, which includes research, data, and ABI Insights.
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