Rystad Energy Report: Addressing Global Grid Challenges with $3.1 Trillion Investment for a Sustainable Energy Transition by 2030

Renewable energy development continues to surge, with a projected investment of $644 billion in new capacity for 2024. However, outdated and inadequate power grids pose a significant challenge to the energy transition. To limit global warming to 1.8 degrees Celsius above pre-industrial levels, Rystad Energy research suggests that $3.1 trillion in grid infrastructure investments is needed by 2030.

In this scenario, an additional 18 million kilometers of grid network would be required to accommodate the electrification trend in cities and countries, including the integration of new renewable energy capacity and the rapid adoption of electric vehicles. This expansion would bring the total length of power grids worldwide to 104 million kilometers by 2030 and 140 million kilometers by 2050 – a distance comparable to the Earth’s distance from the sun. Meeting this immediate need would necessitate nearly 30 million tonnes of copper, a commodity already facing shortages.

The primary driver for grid enhancements is the growing global power demand, fueled by population growth, industrialization, urbanization in developing countries, and efforts to combat climate change through electrification. Other factors contributing to the urgency include cybersecurity concerns, geopolitical considerations, and the need for reliable national energy supply. However, inefficient regulatory frameworks could significantly delay grid developments and impede the energy transition.

Grid investments are predicted to reach $374 billion in 2024, with Asia leading in expansion investments, particularly China and India. Other regions, like the US and Europe, are also ramping up efforts to upgrade and expand their power infrastructure. However, the rapid expansion of the power grid will require vast amounts of raw materials, particularly copper and aluminum.

Lengthening the grid network is crucial to support renewable power generation and connect new areas, but alternatives such as large-scale battery storage and grid digitalization can also address issues associated with intermittency and capacity. Streamlining regulatory frameworks and encouraging investments will be essential to ensure that grids can facilitate, rather than hinder, the energy transition.