Doubling of Investments and System Flexibility by 2030

Industry News– December 5, 2023

“Please hold the line” – everyone knows what it is like to be stuck on hold. When added up over a lifetime, the time spent waiting for someone to pick up the line amounts to several weeks, according to a US study. But not only insurance customers, internet users or account holders are regularly put on hold. Operators of PV or wind power sites – or those waiting to become one – are experiencing their own version of a please-hold-the-line situation more frequently. The International Energy Agency (IEA) reports that worldwide at least 3,000 gigawatts (GW) of renewable energy projects, 1,500 GW of which are at advanced stages, are waiting to be connected to the grid. This is five times the capacity of PV and wind power installed in 2022, which demonstrates that power grids are increasingly turning into a bottleneck for the energy transition. The reason for this is that grid expansion and modernization cannot keep up with the quick deployment of renewable sources of energy as well as the electrification of the heating and traffic sector.

In the Netherlands, the power grids’ maximum capacity in certain regions is reached at any given time. This means there is long waiting times for companies and even small-scale consumers who wish to connect to the grid or expand their capacity. This is not only slowing down the construction of buildings and economic growth, but also endangering climate targets, grid operator TenneT warned in October.

More money for more flexible grids

To prepare the electricity grids for the energy transition and to meet individual national climate targets, global grid investments need to be doubled to more than $600 billion per year by 2030, the IEA demands. The focus is on digitalization and modernization, including intelligent meters, automated grid management, digital technologies for the measurement of consumption and improvement of the grid operation. Power systems need to become more flexible in order to handle the growing share of volatile renewable energies. According to estimations of the IEA, the need for system flexibility will also double between 2022 and 2030. This requires the deployment of all flexibility options available.

In the Netherlands, the government and grid operators now also plan to push ahead the implementation of grid-serving charging of e-vehicles and the use of intelligent controllable devices in order to get more out of the existing power grid. Furthermore, funding is planned for so-called energy hubs, in which companies coordinate their electricity demand and supply on site and therefore reduce the load on the grids.

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