How to accelerate grid infrastructure deployment for an electrified future

The world’s energy systems are at a crossroads. 2024 saw the largest-ever annual increase in renewable energy capacity globally.

Electrification powered by renewable energy is now widely recognized as the most decisive lever for accelerating the energy transition. It supports climate goals, enhances competitiveness and strengthens energy security.

In parallel, after decades of relatively stable consumption, electricity demand is surging across markets globally, increasing by 4% in 2024. Infrastructure that would typically take a decade to plan, permit, finance and build must now happen in far less time to keep pace with load growth and renewables deployment. What took us 100 years to construct must now be doubled in just 15-20 years, making this the most significant global infrastructure undertaking in most of our lifetimes.

The cost of slow action, and decades of underinvestment in grids, is already playing out: delayed grid expansions or upgrades have created bottlenecks that are slowing down renewables deployment and limiting the rate at which we can electrify key sectors such as transport, heating and cooling, and industry.

Increasing connection queues and congestion costs are two clear indicators of this growing challenge. For instance, a recently published capacity map of Spain’s distribution networks reveals that over 83% of access points have zero available capacity for new demand.

We need to rethink our approach to strengthening the power grid as an urgent imperative and an opportunity rather than a cost.

According to the IEA, the global average annual investment in electricity grids was around $300 billion between 2016 and 2023, which rose to around $400 billion in 2024 – still short of the $650 billion projected per annum spend based on current projections by 2035. But there are signs of progress. Utilities at COP30 announced upgraded investment plans that will see them invest $1.24 in networks and storage for every dollar invested in renewable generation – mobilizing around $1 trillion in total energy transition spend to 2030.

There are also gaps in lending that inhibit grid expansion particularly in developing countries. The Green Grids Initiative found that just over half of grid development today is ineligible for climate or development related financing, constraining access to crucial pools of capital. A new set of principles that widen the lens through which multilateral development banks and climate finance institutions view grids was widely supported at COP30 in Belem and should help broaden the finance base. This is just one example of the need for fresh thinking.

Traditionally, regulatory decisions about grid development required firm connection requests, which left networks lagging system needs. What we need is a grid infrastructure built in anticipation of the demand we know is coming.

Long-term planning over 20–25 years, aligned with cross-sectoral demand projections and energy targets, provides visibility and consistency for investors and suppliers. This reduces uncertainty and financing costs. Anticipatory investments ensure new customers can connect quickly and existing capacity scales as electrification accelerates. Strategic planning should also seek to improve the coordination of new sources of large demand (industry, data centres, urban developments, etc.) to ensure that the grid is optimally sized to provide timely and cost-efficient connectivity.

Streamlined and digitized permitting and approval processes can significantly shorten timelines, allowing projects such as grid expansions or new renewable generation to come online sooner. Combined with better management of grid connection queues so that high-value, strategically important and grid-ready projects are prioritized, this accelerates delivery, reduces reliance on expensive generation, lowers wholesale electricity prices, and enables new demand that improves energy system efficiency while cutting emissions.

A program based approach would also help to optimize grid development costs. Adopting programmatic approaches to grid development, such as framework agreements, bulk procurement, capacity reservations, and harmonized specifications, can significantly reduce costs and accelerate delivery compared to a traditional project-by-project model. Digitalization, power electronics and advanced technologies can further enhance efficiency by improving visibility, automation, and flexibility, allowing operators to optimize capital expenditures and extract more value from existing assets.

Delivering the grid infrastructure we need begins with a shift in mindset to reconsider the value of our networks. We must stop viewing electricity networks as unavoidable system costs and recognize them as strategic assets that enable long term, low carbon value creation that delivers clean, secure and affordable electricity to everyone, everywhere, all the time.

We also need to consider the cost of not investing in grids and keep in mind that the longer we leave it the costlier it will be. This change in perspective is what unlocks smarter investment, more proactive planning, faster processes and more programmatic approaches to grid development. These measures are the practical expression of a new narrative that treats the grid as an opportunity for growth, competitiveness and decarbonization.

This mindset change allows significant impact. Smart and well sequenced grid investment minimizes incremental system costs, enables broad electrification and expands the consumer base, which reduces costs per user and per kilowatt hour while lowering emissions. It becomes a cornerstone of sustainable growth, unlocking value across the energy ecosystem and ensuring that the benefits of electrification are widely and fairly shared.

The choices we make today will determine whether our energy systems realize this potential. The time to act on grids is now – we cannot leave it any longer!

TAQA, Iberdrola, and Hitachi are all members of the Utilities for Net Zero Alliance, established at COP28 and supported by IRENA and the UN Climate Change High-Level Champions.