Renewable energy developments continue at break-neck speed, with US$644bn to be spent on new capacity in 2024, but outdated and inadequate power grids could prove to be a significant stumbling block to the energy transition, says Rystad Energy.

In that scenario, an additional 18 million kilometres of grid network would be needed to keep pace with the electrification underway across cities and countries, including new renewable energy capacity and the rapid adoption of electric vehicles. This would take the total length of all power grids worldwide to 104mn kilometres in 2030, expanding to 140mn kilometres in 2050 – almost the same distance from Earth to the sun. The immediate expansion by 18mn kilometres would necessitate nearly 30mn tonnes of copper, a commodity already in short supply.

Growing global power demand is the main factor driving the need for grid enhancements. This rise is driven by population expansion, industrialisation and urbanisation in developing countries, and efforts to mitigate climate change through electrification. Cybersecurity, geopolitics and the increasing priority for securing reliable national energy supply also contribute to the need. Yet, inefficient regulatory frameworks could significantly delay grid developments and, in turn, the energy transition.

The rapid expansion of the power grid will require vast volumes of raw materials, especially copper and aluminium. Copper is primarily used as the conductor in underground distribution, transmission and subsea cables, while overhead lines use aluminium. Although aluminium is predominantly used in overhead lines, it can be substituted as a conductor in underground lines. Demand for copper and aluminium is expected to surge by almost 40% by the end of the decade, but grids are not the main driver. They are also vital to myriad other applications within the construction, transportation, renewables and consumer products industries. Grids only account for roughly 14% of copper demand globally, or about four million tonnes in 2024.

Lengthening the network is necessary to support intermittent and remote renewable power generation and to connect new industrial, commercial and residential areas, but alternatives to meet growing power demand also exist. Implementation of large-scale battery storage can address intermittency issues associated with renewables and allow for higher average grid loads, reducing the need for new lines. Overhauls and upgrades of the existing grid can increase the capacity per kilometre and digitalisation can free up capacity by solving flexibility issues. At the same time, distributed energy sources such as rooftop solar can reduce the need for new lines. What is clear is that the world’s current grid infrastructure does not meet the demands of the future energy system.

Tortuous permitting processes are already causing bottlenecks in many countries, including the US and the UK. Adopting large-scale battery storage solutions and grid digitalisation can address some grid intensity issues, but the electrification of society will spark greater attention and efforts to streamline regulatory frameworks and encourage investments so grids can become an enhancer rather than an inhibitor of the energy transition.