Upgrading the world’s transmission grids could save the global economy nearly $3 trillion (£2.4trn) by 2040, according to a new study by data modelling experts TransitionZero.
The study, which modelled power grids in 163 nations representing 99% of the global population, evaluated two different scenarios: one where grid capacity is not expanded beyond current levels, and another where new transmission lines are built to accommodate the growing demand for electricity.
The results show that expanding transmission capacity allows for more efficient use of renewable energy sources like wind and solar, leading to a reduction in the overall amount of generation and storage infrastructure needed. This, in turn, translates to lower capital costs for the transition to net zero, around 4% compared to a scenario where current grid capacity is maintained.
Specifically, the study found that transmission expansion could reduce the required capacity of zero-carbon technologies by 9% and 21% in China and North America, respectively. More than half of these savings (almost $1.6trn / £1.27trn) would be realised in North America, which needs to at least double its grid capacity by 2040. Europe would see around $350bn (£280bn) in savings, while China could see savings of $55bn (£442bn).
In addition to cost savings, transmission expansion could also enable many countries to become clean power exporters, generating further economic benefits. For instance, TransitionZero expects the Middle East and North Africa (MENA) region to see a “massive” build-out of zero-carbon power technologies to 2040, with transmission cables not only saving the region $890bn (£705bn) in transition costs but also allowing much of the region to become a net exporter of electricity.
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The findings of this study underscore the importance of investing in grid infrastructure as a critical enabler of the clean energy transition. The International Energy Agency (IEA) has also called for doubling annual investment in electricity grids to over $600bn (£475bn) by 2030 to avoid stalling the transition.
In last week’s divisive Autumn Statement, Chancellor Jeremy Hunt announced plans to halve the average project duration time for constructing transmission infrastructure to seven years, also touting plans to reduce connection times for new power generation projects by 90%.
“Our main enemy is time – there’s no time for missteps,” said TransitionZero’s chief executive and co-founder Matthew Gray. “For climate targets to be met, the effective build-out of transmission infrastructure, underpinned by open data is critical.
“Moreover, governments need to grasp that a decision not to invest in the grid, is a decision to build more expensive capacity, such as nuclear and biomass.”
You can read the full study here.
