Renewable power generation — wind, solar and hydropower — now exceeds the electric utility industry’s ability to use it. The International Energy Agency (IEA) estimates more than 3000 GW of renewable energy are now waiting in the grid connection queue — more than five times the amount of solar and wind capacity added in 2022.
The bottleneck is the electrical transmission and distribution grid. Outdated grids around the world are slowing progress to net zero because they are no longer fit for purpose. For the last 100-plus years, grids were designed around a central generation source powered by fossil fuels that sent energy out to users over transmission and distribution lines.
Now, energy comes from every direction: offshore wind farms in the North Sea, the Bahdla solar farm in India, hydropower from the Grand Coulee Dam in Washington state and even the rooftops of individual houses. Wedging distributed energy resources (DERs) onto unidirectional legacy grids is creating a huge traffic jam of renewable energy projects around the globe, idling as they wait in a connection queue.
The National Energy System Operator (NESO) of Great Britain, for example, reported in November 2024 that renewable energy projects looking to join the grid now are receiving connection dates of 2030. The queue includes 210 GW of solar and 112 GW of wind — enough to meet the country’s 2030 renewable energy demand, estimated at 200 GW to 225 GW. In a poll of 20 energy experts conducted by energy consulting firm Cornwall Insight, 75% identified grid connection time as the biggest challenge to the UK’s integration of renewables into the energy mix.
Transmission Investment
If the world wants to meet growing electrification demand while continuing its journey to net zero, utilities need transformative investment in distribution grid modernization and new transmission corridors. Yet, global investment in grids is stagnant at US$300 billion a year, according to the IEA — a number that needs to double.
Grids are the backbone of today’s electricity systems but, as the IEA asserts, “They currently receive too little attention.”
The agency estimates that 40 million miles (64 million km) of grid transmission and distribution need refurbishment. Its calculations show the costs of limited investment and delayed modernization, digitalization and operational advancement would stall the energy transition, leading to a slower uptake of renewables and an increase in fossil fuel use. In its modeled scenario, the IEA estimates cumulative carbon dioxide emissions from the power sector to be 58 gigatons higher by 2050 than if grid investment aligned with national climate targets.
Utilities can efficiently and cost-effectively transmit bulk power over long distances, allowing for the integration of offshore renewables and interconnection of desynchronized grids. For example, in the North Sea, GE Vernova is using a 2-GW bipole high-voltage direct-current (HVDC) system to connect 40 GW of power generated at offshore wind farms to high-voltage grids in the Netherlands and Germany. For the national grid in the UK, a 2-GW HVDC electric superhighway is being built between Scotland and England, enabling the transmission of reliable, renewable energy to consumers.
Robust Management
In addition to building new transmission lines and distribution systems, utilities must also rethink how to manage all these converging electrons.
The integration of renewables, decarbonization of end uses and connection of DERs creates unprecedented complexity. The intermittent nature of solar and wind requires more robust management to account for fluctuations in power generation. Grid operators must also digitize the grid and invest in intelligent, AI-enabled grid orchestration software, like GE Vernova’s GridOS, that can manage multidirectional transmission systems, make full and efficient use of all available renewable energy generation, conduct transactions in the electron marketplace and guard against cyberattacks.
Smart grid technology is a boon for both operators and end-use customers. The IEA estimates that digitally enabled demand response could reduce the curtailment of variable renewable energy systems by more than 25% by 2030, increasing system efficiency and reducing costs.
Investment is Critical
Utilities have no time to lose. In its current state, the global grid structure cannot handle both increasing energy demand and decarbonization. The exponential growth of data centers to support AI will further strain the system. Utilities must expand investment now to focus on modernizing the grid. The future of energy is electric, and there will be no transition without transmission.
