OECD-IEA: Unlocking transmission grid finance and investment for the clean energy transition in emerging markets and developing economies, 17 January 2024, Virtual meeting

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Electricity Grids and Secure Energy Transitions:
Enhancing the foundations of resilient, sustainable and affordable power systems
Virtual OECD-IEA Workshop: Unlocking transmission grid finance and investment for the clean energy
transition in emerging markets and developing economies
17 January 2024
Pablo Hevia-Koch, Head of Renewables Integration and Secure Electricity Unit

2. IEA 2023. All rights reserved. Page 2
Special report on ELECTRICITY GRIDS launched on 17th October
2023
• Importance of electricity grids is growing as demand
for clean electricity grows
• First-of-its-kind global stocktake of the world’s grids
as they stand now​
• Assesses risk of them becoming a bottleneck to
clean energy transitions and electricity security​
• Examines the urgent upgrades required not only to
physical infrastructure but also to the way grids are
planned and managed – quantifying the costs of
delayed action
• Provides key recommendations for policy makers,
highlighting what is necessary in areas such as
investment, regulation and planning

3. IEA 2023. All rights reserved. Page 3
0%
10%
20%
30%
40%
50%
60%
Wind and solar PV share of electricity supply
0
20 000
40 000
60 000
2010 2020 2030 2040 2050
TWh
The nature of electricity systems is changing
Electricity is the beating heart of modern economies and demand is set to grow fast, with new demand types growing,
Traditional demand
Electric vehicles
Hydrogen production
Electricity demand
2022
2022
2022
2022
2022
2022
2030
2030
2030
2030
2030
2030
EU US China India Japan World
while wind and solar PV are re-shaping electricity supply and are set to be 80% of new capacity additions

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There are increasing signs of grid congestion and bottlenecks in
connecting renewable projects in many places

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Solar PV Wind Bioenergy Hydro
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
GW
Capacity of advanced stage projects in queues
0
500
1 000
1 500
2 000
Advanced stage projects
Grids are becoming a bottleneck for energy transitions
We estimate at least 1500 GW are wind and solar projects around the world are in an advanced stage of development.
While investment in renewables has almost doubled in the last decade, investment in grids has remained stagnant.
Capacity of renewable energy projects in connection queues
United States Europe
Japan Others
Advanced stage Early stage/unlikely
GW

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calling for grid investment to double by 2030, in step with renewables, raising material needs.
Over the next two decades, 80 million km need to be added or replaced, as much as the global grid length today,
0
10
20
30
40
50
60
70
80
Million
km
0
200
400
600
800
Billion
USD
Grid development needs to accelerate to keep up with transitions
Grid development in the Announced Pledges Scenario
2001-2021 2022-2040
Expansion Replacements
Grid lengths
At recent
growth rate
Gap to
APS
Renewables
2022 2030
Grid investment

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Electricity grid development is complex, involves many stakeholders and can take many years,
Long lead times for grids call for advanced planning
requiring decisions well in advance to support electrification and renewables that can be deployed more quickly
Decision timelines to complete typical projects by 2035
Extra-high voltage transmission
High voltage transmission
Distribution line
EV charging
Wind
Solar PV
China
India
Advanced
economies
2035
2023 2030

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0
2
4
6
8
10
12
14
16
Gt
2010 2030 2050
Power sector
CO2 emissions
-80%
-60%
-40%
-20%
0%
20%
40%
Change in electricity generation
from 2020 to 2050
0%
10%
20%
30%
40%
50%
60%
70%
2010 2030 2050
Solar PV and wind share
of electricity generation
Clean energy transitions depend on robust electricity grids
and lead to greater use of coal and natural gas, raising fossil fuel import bills by USD 500 billion and CO2 emissions
Impacts of failing to accelerate grid investment and modernisation
Coal Natural gas
APS
Grid Delay
Case
Failing to step up the pace of grid investment and modernisation would stifle the growth of renewables,

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A call to action
▪ Bring planning up to date – Strategic and integrated planning across sectors
▪ Unlock investment – Improve how grid companies are remunerated
▪ Address barriers – Regulatory overhaul towards proactive grid development
▪ Secure supply chains – Firm & transparent project pipelines to enable resilient supply chains
▪ Leverage digitalisation – Digitalise infrastructure and advance distributed resources
▪ Build a skilled workforce – Create a pool of talent with digital and electricity skills

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IEA 2023. All rights reserved.