Keeping the lights on: How power infrastructure gaps risk energy security

The energy transition used to be about climate. Now it’s also about energy security, reindustrialization and affordability.

Everything that can be electrified should be electrified. Huge investments will have to go into renewable power generation capacity, massive grid developments and all the flexibility needed to balance a renewable energy system. Success means securing locally generated, low-cost energy to power new and transitional industries, to make energy more affordable and to reach net zero by 2050.

The world has already made remarkable progress in deploying renewables. Solar and wind now account for over 90% of new global electricity capacity and clean power provides 40% of total global electricity generation. But the backbone of this transformation is failing because power infrastructure that was designed for a different era is struggling to keep pace with demand.

During my time at Norway’s transmission system operator Statnett, I saw grid infrastructure rise up the priority list in debates on energy security. But ambition is not yet being matched by action from governments, policy-makers, investors and businesses.

In the past year alone, the impact of blackouts and grid failures have been stark reminders that energy systems are under strain. And recent crises have only underscored the urgency of this issue. In Europe, an energy shock following the war in Ukraine helped drive impressive action that saw renewables grow from 38% to 47% of EU electricity generation in just four years. But grid bottlenecks and ageing energy infrastructure now threaten further progress.

In Asia, surging demand and electrification are driving unprecedented energy infrastructure investment needs, according to research from the Asian Development Bank and the World Economic Forum. The Asia-Pacific (APAC) region is responsible for 60% of global carbon emissions and 60% of the world’s population, making its energy system investments pivotal for the planet’s future health.

China is setting the pace for power infrastructure innovation. It invested $625 billion in clean energy in 2024 – surpassing that spent by Europe and North America. And, crucially, such investments in clean energy are matched by investments in grid infrastructure.

China’s ultra-high voltage (UHV) transmission network is designed to integrate vast renewable resources and delivers green energy across thousands of kilometres with minimal energy loss. For example, the Ningxia-Hunan UHV line, operational since August 2025, can supply 10 million homes and is powered primarily by solar and wind.

Europe needs to catch up. The continent could look to the Nordics’ more than 40 years of renewable energy systems development for inspiration. During this time, the region has built interconnectors across borders, made robust grid investments and focussed on developing flexibility and digital automation.

But this requires huge investments in energy infrastructure. The Draghi Report on EU competitiveness recommended the region invest €300 billion a year in the energy transition, including grid infrastructure and renewables. Progress is being made, with EU grid investment set to exceed €70 billion in 2025 – double the amount spent a decade ago. The UK’s Great Grid Upgrade shows the level of infrastructure transformation needed at a country scale.

Overall, however, grid investments still lag renewable deployment, placing significant strain on energy systems around the world.

Power infrastructure failures are the leading cause of severe blackouts worldwide, with cascading effects on economies and societies. Ageing infrastructure, underinvestment and grid overload have led to several major outages recently, such as the April 2025 blackout in Spain and Portugal.

The IEA also estimates that the world needs to at least double its existing grid capacity in the next 15 years in order to meet climate goals. Without sufficient grid investment, up to 1,500 GW of renewables projects will be delayed as they wait to be connected to the energy grid. This leaves countries at risk of missed decarbonization targets, lost reindustrialization opportunities and high energy prices caused by importing fossil fuels.

Grid bottlenecks drive up energy prices, slow industrial growth and undermine public trust through lack of affordability. Rising energy prices during recent crises have shown how vulnerable economies are when infrastructure trails ambition. In Europe, grid constraints are directly affecting energy prices and curtailing renewables use. In APAC, inadequate grids would stall electrification and leave millions without reliable power.

Without timely investment in grids and flexibility, the cost of integrating renewables will escalate. Affordability must be treated as a core pillar of the transition – an energy system that is clean but unaffordable will fail to gain public support and undermine long-term climate goals.

Successful grid transformation demands coordinated action. Denmark’s early wind energy success, Germany’s Energiewende and state-led initiatives in the US have all relied on public-private partnerships (PPPs) that blend policy incentives with private innovation. Green banks, blended finance and PPPs have mobilised billions for grid upgrades.

Regulatory sandboxes and flexible tariff designs are also expediting grid modernization. The US, Germany and the Nordics have used such initiatives to pilot new models to test advanced energy technologies, encourage distributed flexibility and align incentives for utilities and consumers.

Public support is essential. In 2024, Spanish utility Iberdrola used a gamified strategy to highlight the challenge of the clean energy transition among its customers. Such immersive, transparent engagement can drive understanding and acceptance. Early and inclusive engagement, clear communication of benefits and trust-building are key.

Affordability is also vital to public support for energy system investment. This means reconsidering current regulated tariff models that place investment costs directly on consumers’ shoulders.

Governments and investors gathering at the World Economic Forum's Annual Meeting 2026 at Davos have the opportunity to work together and drive change when it comes to energy infrastructure investment. They need to:

The energy transition will only succeed if its underpinned by a holistic energy system perspective, with immediate investment in infrastructure and much-needed flexibility. Bold, holistic and anticipatory actions will build the affordable, resilient and flexible energy systems that will power a net-zero future.