Are new technologies needed to ready grids for a rapid clean energy transition?

This is the question edie put to Breakthrough Energy’s manager for the power sector in Europe, Alberto Toril Castro, as part of our Innovation Week (17 – 21 June).

Toril Castro joined the clean energy accelerator, founded by Bill Gates in 2015, two years ago from Iberdrola – the Spanish multinational energy giant perhaps best known for its extensive offshore wind farm project portfolio. He also worked at the International Energy Agency (IEA), co-authoring several flagship publications explaining the state of the global clean energy transition.

The IEA warned late last year that, while global clean energy generation investment is reaching unprecedented highs, far less has been done to scale financing for grid infrastructure to support new generation assets.

Annual global investment in grids has “remained broadly stagnant” since the Paris Agreement was ratified in 2015, at around $300bn per year. This funding level will need to double to $600bn by 2030 if the world is to have any chance of delivering an energy transition aligned with the Paris Agreement

Toril Castro summarises: “In the last few years, we have set up power generation goals very effectively in different member states, including the UK… different states, different paces – but, nowadays, there is a common understanding that renewables are the cheapest way of producing clean electricity.

“At one point, that was enough. But the pace is taking us into different challenges that we never imagined at the beginning.”

“Rather than being the enabler or the facilitator, the grids are becoming the bottleneck.”

Grid build-out is needed in different markets for different reasons. In some of the lowest-income nations, universal energy access is a hurdle still to be crossed – progress has even gone backwards in some places in the past year. Emerging economies, meanwhile, will need to build grids out to maintain energy security amid shifts like population growth, industrial expansion and urbanisation.

And in developed nations like Toril Castro’s homeland, Spain, and edie’s base, the UK, grid modernisation will be crucial to bringing renewable generation online.

Wealthy nations have been advised by the IEA to achieve decarbonised electricity sectors by 2035 to deliver their fair share of a global transition to net-zero by mid-century. This will not be possible without changes to grids to address extremely long grid connection delays.

And, once projects are connected, energy should not go to waste. Some Spanish provinces experienced curtailment rates higher than 10% last year and the challenge is likely to persist in the decade ahead.

Powering through

Around the same time that the IEA issued its call for a doubling of global grid funding, the EU unveiled a 14-point Action Plan to modernise grid infrastructure. Achieving the Action Plan in full comes with a price tag exceeding €580m. Public, private and philanthropic financing will likely be needed to achieve this level.

Toril Castro says “this kind of leap” in investment is “needed everywhere”. He also stipulates that the Action Plan is “a very good starting point” for robust policymaking on grid modernisation. It covers issues such as long-term, joined-up planning; cross-border cost sharing for large projects, and streamlining permitting processes without bypassing important stakeholder and community engagement

At present, however, the Action Plan includes less in the way of precise details on new technologies which could mitigate the need for the construction of so much new grid infrastructure.

“It is well understood that grids take a very long time to get built… through the different phases of planning and permitting, we’re seeing an average duration of 10 to 13 years,” says Toril Castro. “But we don’t have the privilege of time anymore.”

Speeding processes does not necessarily entail building grids without considering the broader social and economic implications. With 40% of the EU’s grid infrastructure in need of modernisation, technologies could be deployed to reduce the need for new constructions.

A new report co-authored by Breakthrough Energy, CurrENT Europe and Compass Lexicon states that innovative grid technologies could improve the world’s existing grid capacity by at least 20% and as much as 40%.

Advanced, high-temperature conductors can enable up to three times more electricity to be transmitted through the same line, for example. This tech could be commercially mature within the next three years.

Dynamic Line Rating – whereby digital models can take information on a power line’s properties as well as real-time data to determine appropriate capacity limits – is another promising intervention, already being tested in the UK.

When it does come to building new grids, the report states, innovative technologies could reduce grid expansion project delivery times by four to eight years.

“Many of these technologies are ready, but the problem here is the regulation,” says Toril Castro.

Policy interventions

The Action Plan does note that, at present, incentives for the application of innovative technologies are “insufficient”. Many schemes provide marginal support with upfront costs but do little to provide a business case for financial benefits over the longer term – CAPEX and OPEX are not sensibly balanced.

Brussels will encourage member states to regularly review their network tariff-setting methodologies to account for increased OPEX. Increases will result not only from the implementation of technologies, but the shift to a more flexible system where consumers can become ‘prosumers’ by offering grid balancing services from their batteries, buildings and electric vehicles.

The Grid Action Plan further stipulates that the EU should “increase the visibility” of available technological solutions by the end of 2024 and refresh this workstream at least once a year. Visibility will be provided through a ‘Technopedia’ – an online directory of factsheets on key technologies.

Toril Castro says this approach will doubtless assist larger businesses in the energy sector, which may be partly or wholly government-owned. They need to be more forward-thinking and open to new forms of partnerships, but may be reticent due to a lack of knowledge about certain innovations.

So far, so good. But edie asks Toril Castro whether he worries that the Action Plan could be put on the back-burner as 2024 is an election year for the EU. Voting in early June saw sizeable gains for far-right parties and losses for the Greens, making for an underlying current of concern over the delivery of the Green Deal’s key commitments.

He points to a recent says: “I’m very positive… there is a very central, laser focus on how to promote energy infrastructure in the next political cycle”.

Days before EU residents went to the polls, the bloc’s Council approved conclusions on the Grid Action Plan’s key facets. While nations continue to bicker on other green policy fields including nature restoration and corporate sustainability claims, there is smoother cross-party support for modernising the grid.

Toril Castro believes this to be true for the UK as well as the EU. The Conservatives, Labour, the Liberal Democrat and The Green Party all include pledges to upgrade grid infrastructure in their general election manifestoes.