Analysis, Electric Power

Gridlock: how a lack of power lines will delay the age of renewables

A backlog of wind and solar projects is waiting to connect to infrastructure built for another era, threatening net zero plans

The Couture wind farm in Poitou-Charentes, south-west France, is in limbo. Despite having planning permission, construction of the 33.3-megawatt wind farm, which could power 30,000 houses, is on hold. The problem: gridlock on the grid. The project’s developer BayWa RE says the wind farm is facing an eight-year wait before it can obtain a connection to the grid — the network of cables, substations and transformers that takes electricity around regions, countries and across borders to power our homes, offices and factories.

The project’s developer BayWa RE says the wind farm is facing an eight-year wait before it can obtain a connection to the grid — the network of cables, substations and transformers that takes electricity around regions, countries and across borders to power our homes, offices and factories.

It is a lengthy delay, but not exceptional. Around the world, developers of renewable energy infrastructure are being told they must wait anything from a couple of years in parts of the US to up to 15 years in the UK before they can plug projects into grids that are struggling to keep pace with shifts in electricity generation.

There is a dawning realization that these connection delays could have a calamitous impact on global efforts to cut greenhouse gas emissions.
Scientists say the world must rapidly transform the global energy system, ditching fossil fuels in favour of cleaner sources of power such as wind and solar in order to limit global warming and avoid the catastrophic effects of climate change.

But this switch can only happen if renewable projects can connect to electricity grids, which are state owned in some countries but privatized in others.

Power generation needs to triple by 2050, with a massive switch to renewables

Gross electricity generation (PWh), 2050 bar represents what needs to happen to meet 1.5C target

Two decades ago, the grid was just one way to get energy. There were also other options, such as petrol and gas. “But now the grid is becoming the main way to get energy,” says Frédéric Godemel, executive vice-president of power systems and services at Schneider Electric, the French energy management company. “The grid needs to be upgraded. It needs to be changing league.”

Matthias Taft, chief executive of BayWa RE, which has operations in more than 30 countries, says grid connection delays are now the “major obstacle” to the rollout of the renewable projects not just in Europe, but in the US and Australia among other countries.

“We are facing a very real situation where we have to wait five, 10 years [for grid connection]. We have a permit [to build projects], but the physical grid connection is not available,” says Taft. It “really is a threat” to the energy transition, he adds.

Politicians across the world have clamored to back renewable energy projects, both to improve energy security by reducing reliance on fossil fuels that are often imported, and as part of efforts to cut emissions in the wake of the Paris agreement. Parties agreed to limit global temperature rises to below 2C and ideally 1.5C above pre-industrial levels.

To keep the 1.5C target alive, the renewable power generated must more than triple from 3,000GW today to more than 10,000GW in 2030, according to the International Renewable Energy Agency, or Irena

Infrastructure demands expected to increase sharply

Cumulative installed length of global electricity grid cables

Countries have been busy setting ambitious green energy targets. In March, the EU a provisional agreement to require at least 42.5 per cent of electricity to come from renewable sources by 2030. Then in April, the G7 group of rich countries pledged to increase offshore wind capacity by 150GW by 2030 and solar capacity to more than 1 terawatt. A global goal for renewables may be formalized at this year’s UN COP28 climate summit in December in Dubai.

But underneath the noise, few politicians are talking about the grid, the infrastructure vital for achieving the ambitious targets and net zero plans.

“Grids are not part of public consciousness,” says Stephanie Bätjer from the Renewables Grid Initiative, a non-profit promoting the development of grids. “We are all aware that for our energy future, we need wind, solar, renewables. But grids aren’t often part of the conversation.”

Problems with the electricity network are so entrenched that even the British prime minister paid for a private upgrade to the local grid to heat a swimming pool at his home. Greenpeace activists held a protest outside the Yorkshire property in March where, dressed in swimwear and holding banners, they called for Rishi Sunak to update the country’s grid to provide green energy for all.

As the world moves to increased electrification, such as the switch to electric vehicles and heat pumps, we will “need to transport more electricity than we did in the past”, adds Bätjer.

“I don’t know of any country where the grid is not currently some level of obstacle to the energy transition,” says Mark Hutchinson, director for Asia at the Global Wind Energy Council, the international trade association. One of the big issues, he adds, is there is “not enough grid” infrastructure to meet the needs of the changing energy system. Bloomberg NEF, a data provider, estimates that 80mn km of new grid is needed by 2050, more than enough to replace the entire global grid today.

In much of the western world grids were developed after the second world war to serve big power stations burning fossil fuel such as coal or gas. The electricity generated at the power station was then sent via a network of power lines and cables to our homes.

Investment in power grids on the rise in advanced economies


The green transition will require an overhaul of the current set-up. Several wind and solar farms are often needed to replace a large power plant, partly due to the intermittent nature of renewable energy; the wind doesn’t always blow. These farms all need grid connections, yet typically they are in remote areas or off coasts, where grids are patchier.

“The grid is in the wrong place to deliver the power from [renewable energy] to economic centers,” says Peter Crossley, a professor of power systems at Exeter university.

Alongside this obstacle, the rollout of solar panels on homes and businesses that feed into the grid — plus the shift towards electric vehicles and heat pumps — has increased the complexity of managing electricity networks. Grid operators face a tricky balancing act — they must keep the lights on and expand the network without ramping up costs for consumers, while increasingly considering their role in cutting greenhouse gas emissions.

Right now, a huge bottleneck is emerging. Grid operators globally are overwhelmed by the sheer volume of projects requesting a connection.

“We see massive short-term bottlenecks that stem from grid operators not having enough people to do the processing jobs needed, owing to a chronic lack of investment,” says Harald Overholm, chief executive of Swedish solar company Alight. “It’s a huge problem, to the extent I think we could double the pace of the global renewables rollout if these bottlenecks were not the case.”

In the UK, Spain and Italy more than 150GW of wind and solar projects are stuck in grid connection queues in each country, according to figures from Bloomberg NEF.

Queues on the rise as clean energy projects seek to connect

Power capacity, US only (GW)

In the US, grid connection requests grew by 40 per cent in 2022, a led by Lawrence Berkeley National Laboratory found. The researchers discovered that nearly 2,000GW of solar, wind and storage projects were in queues to connect to transmission grids — the long-distance, high-voltage electricity network — far more than the installed capacity of the entire US power plant fleet.

Many of these projects will never be built. Developers often submit speculative applications, says lead author Joseph Rand. His research looking at connection requests submitted between 2000 and 2017 found that typically only a fifth of projects were built.

One of the reasons for the fall-off in construction is that developers have limited information about grid capacity — or the ability to accept a new project — prior to submitting an application. Potential issues and additional costs only emerge when the operator carries out a study on the possible connection.

Developers back away from projects when they find out their development triggers a huge bill for a grid upgrade or reinforcement. Nick Pincott, a partner at TLT, a law firm, says a project in the UK was scrapped when the developer was told they would face a £19mn “reinforcement charge” to upgrade the grid — more than the project was worth.

Even when projects get a connection, “more and more there are restrictions on when you can use that connection”, such as constraints on when they can sell electricity, says Pincott, leaving some projects less commercially viable.

Clean energy poised to grow in all US regions, but strongest in the west

Regional distribution of proposed wind, solar, storage and gas capacity by grid operator (GW)

Despite countries setting out legal targets to cut emissions and increase renewable energy generation, operators and politicians have been slow to spend money to upgrade grids.

“The reason we have people queueing up for grid connections”, says Nick Dunlop, co-founder of Climate Parliament, a group focused on getting politicians to take action on global warming, “is because governments are not yet taking climate change seriously. They are not really bending their will towards attracting investments in grids.”

Figures from the International Energy Agency show that rather than capital investment in grids globally increasing following the Paris agreement, it between 2017 to 2020 and only recovered to 2016 levels in 2022 at $330bn. Grid investments in Europe were stagnant between 2015 and 2020 at about $50bn per year, picking up only slightly in the past couple of years. In China, after falling between 2019 and 2021, investments in the country’s grids grew by 16 per cent to almost $83bn last year.

But Irena says to keep the 1.5C goal alive, global annual investment in power grids and so-called flexibility, which includes energy storage, will need to hit almost $550bn a year by 2030. The European Commission s some €584bn needs to be invested in Europe’s grid by 2030.

Crossley says there has been a reluctance to invest in grids because this cost is often at least partially passed on to consumers through electricity bills. Even when there are plans to extend the grid, operators complain the proposals get stuck in the planning system, often because of concerns about building overhead transmission lines in green fields.

Keith Anderson, chief executive of ScottishPower, a British utility company that operates a grid and develops wind farms, says it took 10 years to get planning permission to replace and increase capacity of an existing transmission line between Beauly and Denny in Scotland. Grids are the “forgotten giant of decarbonization and net zero”, he adds.

Grids go global?

The queues and cost of upgrades have prompted fears that efforts to cut emissions will be undermined not by a lack of interest in renewables but by the basic infrastructure underpinning the system.

“It is going to be boring old cables that literally trips us up on the path to decarbonization,” says Marlon Dey, head of research for the UK and Ireland at Aurora Energy Research.

“There is only one solution and that is to physically reinforce and build more grid,” Dey says. “And if you can’t do that quickly enough, then you can’t build the renewable power we need and can’t get away from fossil fuels fast enough. And then you can’t decarbonize fast enough.”

Politicians and policymakers are slowly waking up to the problems, says Lisa Fischer, a program lead at E3G, a climate think-tank. “They are starting to understand that grids are becoming strategic priority assets.”

Fischer says countries need to consider innovative solutions such as building transmission lines alongside roads or gas pipelines, where planning permission is more likely to be granted. “There hasn’t been enough creativity in terms of finding solutions, and this is where the political leadership matters,” she says.

Frank Jotzo, a professor of environmental economics at the Australian National University, says another option is to develop renewable energy “zones” in geographically suitable areas and prioritize grid development there. This is already taking place in parts of Australia, he adds.

A worker fits solar panels in Florida. In April, the G7 pledged to increase offshore wind capacity by 150GW by 2030 and solar capacity to more than 1 terawatt © Joe Raedle/Getty Images

Last year, the US’s Federal Energy Regulatory Commission set out proposals to shake up the grid connection queues, including overhauling the “first come, first served” system by prioritizing projects that were most likely to be built, such as those with planning permission. It also proposed developers have access to more information about grid capacity — such as where transmission lines are already congested.

In the UK, Ofgem, the British energy regulator, is trying to solve the problem as well. In May, it also proposed overhauling the country’s first-come, first-served queueing system among other measures.

There is also a growing focus from countries on building grids beyond borders, with the idea of being able to rely on energy from different places at different times. The Netherlands and the UK, for example, are working on the so-called LionLink power line between the two countries.

In March, Greek prime minister Kyriakos Mitsotakis called for the EU’s grid to be overhauled and expanded to allow the transfer of electricity generated by renewable energy between the north and south of the continent, a proposal that has so far won the backing of about half of the bloc.

“You can easily power the world, but only if you have the right grids,” Climate Parliament’s Dunlop says. “You have to have large-scale continental-wide grids, even transcontinental grids.”

Irena chief Francesco La Camera argues there needs to be more focus on developing both local and international grids in Africa, arguing the continent could be the “most important powerhouse for clean energy in the world” due to the potential for large solar farms to be based there. But it lacks the grid infrastructure from cables to battery storage that is needed.

“We think multilateral development banks should focus on the building of the physical structure that is needed to build the path for the new energy system,” he adds. Despite all the issues, Berkeley’s Rand says the huge queues for grid connections show the appetite is there for transforming the energy system. “We have all of these developers wanting to build solar wind and battery storage projects. That’s the very positive side of the story,” he says.

Back at the Couture wind farm in France, BayWa estimates the project will take just 12 months to build. But there is no point starting the construction of a wind farm that cannot get a grid connection for years.

Taft, the BayWa chief executive, recently met politicians in Europe where he called for the bloc and individual countries to double down on efforts to tackle the problems with grid infrastructure.

His message is unambiguous. If governments and grid operators fail to take urgent action, “we will fail with the energy transition”.

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