As electricity demand rapidly increases, the International Energy Agency (IEA) has identified a bottleneck in connecting new generation facilities to the power grid. The IEA suggests that alongside building new infrastructure, digital technologies, artificial intelligence (AI), and advanced grid technologies should be utilized to enhance the efficiency of existing networks.
On September 24, the IEA released its report titled 'Modernising Grids in the Age of Electricity,' highlighting the urgent need to modernize transmission and distribution networks as a key challenge for global energy systems. This need arises from rising electricity demand and changes in energy sources.
According to the IEA, global electricity demand has increased at nearly twice the rate of overall energy demand over the past decade. Factors driving this surge include the electrification of industries and transportation, increased cooling needs, and the expansion of data centers.
If current trends continue, the IEA projects that global grid capacity will need to expand by at least 30% by 2035. It estimates that approximately 25 million kilometers of new power lines will be required for replacing existing facilities and constructing new ones. This indicates that without simultaneous investment in the grid to transmit the generated electricity to actual demand locations, the expansion of power supply could be constrained.
Currently, there is a significant number of generation and storage projects awaiting grid access. The IEA reports that as of 2025, at least 1,700 GW of renewable energy projects are in advanced stages of development but are still waiting for grid connection. Additionally, around 600 GW of large-scale energy storage system (ESS) projects are also in a state of waiting for connection.
The costs associated with grid congestion are also rising. The IEA estimates that in 2024, congestion costs in the United States will reach approximately $12 billion, while the European Union is expected to incur about €4.3 billion in similar costs that year.
The IEA emphasizes the need for continuous construction of new power grids to meet rising electricity demand, but it also points out that simply increasing capacity will not solve all issues. Building grids to accommodate peak demand may result in significant transmission capacity remaining unused during normal conditions.
As an alternative, the report suggests technologies that can assess the actual transmission capacity of existing grids in real-time and efficiently manage power flows. By applying 'grid enhancement technologies' such as dynamic rating, system configuration optimization, and advanced power flow control, the efficiency of existing infrastructure can be improved without the need for new large-scale grid construction.
The IEA estimates that utilizing these technologies could allow for the connection of an additional 330 GW of generation and storage capacity to existing global power grids, equivalent to the combined capacity of France and South Korea. Achieving the same level of connection capacity through traditional grid expansion would require an investment of about $100 billion.
AI is also being utilized as a means of modernizing power grids. However, its application varies across different sectors. A survey conducted by the IEA of 25 global transmission and distribution operators found that while 70% reported extensive use of AI in maintenance and repair, only 23% applied it in real-time system operations. This is crucial as real-time operations are directly linked to stable power supply, making the explainability and accountability of AI decision-making processes essential.
The IEA warns that if power grids cannot keep pace with the growth of generation facilities and demand, the speed of energy transition and electrification could be hindered. It stresses the need to increase investments in grid construction while maximizing the efficiency of existing infrastructure through digitalization, grid enhancement technologies, and AI.
* This article has been translated by AI.
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