Wood Mackenzie Highlights Growing Grid Stability Risks As Coal And Gas Plants Retire And Synchronous Condensers Return To Focus

As coal and gas plants continue to retire, most discussions about the energy transition focus on how to replace the electricity they produce. What often receives far less attention are the physical characteristics these traditional generators provided automatically: the inertia that helps maintain grid frequency, the fault current that supports voltage during unexpected events, and the reactive power that keeps voltage stable across the network.

These functions were delivered naturally by large spinning machines connected to the grid, reacting instantly through their own physics without needing sensors, software, or control systems. As inverter-based technologies replace them, this built-in mechanical support system disappears, just as the grid faces new pressure from AI data centres capable of swinging their electricity demand by hundreds of megawatts within seconds.

It is a challenge Wood Mackenzie notes as increasingly urgent for system operators worldwide.In this episode, host Bridget van Dorsten speaks with Kristina Carlquist, General Manager of Synchronous Condensers at ABB, and Christian Payerl, Sales Manager of Synchronous Condensers at ABB, to explore why a technology that has existed since the early days of the grid is re-emerging as a critical solution.Christian outlines the three key grid services now being lost: inertia, short-circuit current, and reactive power.

He explains why inverter-based generation does not naturally replace them. While grid-forming batteries can be programmed to mimic the effect of inertia, doing so has limitations: charge-discharge cycles reduce lifetime, overload capability only lasts for microseconds, and the detailed models required for grid simulations are often restricted by manufacturer intellectual property.

Synchronous condensers, by contrast, provide these services purely through physical response, in both directions, without degradation and without uncertainty in how they behave during disturbances. Christian notes that the recent blackout in Spain is an example of what can happen when this gap in system strength is not addressed.

Kristina shares the commercial perspective and the rapid growth in demand. ABB’s collaboration with VoltaGrid began with an unexpected enquiry in late 2024 regarding synchronous condensers for isolated data centre microgrids. That partnership has since expanded significantly, with dozens of units delivered.

On larger grid-connected systems, the Faroe Islands have already installed four synchronous condensers, with a fifth planned, as part of their transition toward 100% renewable energy—an ambition already showing results, with several multi-day periods powered entirely by renewables. ABB is also supporting Korea’s Jeju Island on its first project that incorporates a flywheel-equipped synchronous condenser.

The range of customers is widening, from island grids integrating renewables to transmission system operators strengthening weak grid regions, mining operations shifting to electrification, and now data centre developers who had not previously considered the need for grid-stability equipment.The conversation concludes with a look at policy and standards.

Christian, who is involved in international standards work through CIGRE, points out that there is still no global standard for flywheel safety. He also notes that the way inertia is treated varies widely by jurisdiction: the UK recognises it as a paid service, while in Sweden it is considered free, meaning rotating machines providing it do not receive any compensation.

With data centre demand rising faster than regulatory frameworks can adapt, both guests agree that ensuring grid stability will require a mix of technologies. The challenge, they argue, is achieving alignment across industry, utilities and policymakers on what the grid actually needs to function reliably in a rapidly changing environment.

The episode is sponsored by GridBeyond. The company supports energy asset owners facing the growing challenge of optimising performance in increasingly competitive and fast-moving power markets. Using AI-driven forecasting, energy trading and real-time optimisation, GridBeyond helps operators unlock new value from their assets.

Its platform offers precise market forecasting, intelligent access to multiple revenue streams, instant control responses to system conditions, and optimisation that blends AI insights with human expertise. Whether managing batteries, gas peakers, hybrid systems or complex multi-asset portfolios, GridBeyond enables customers across the energy sector to boost returns and accelerate their energy transition.