IEA says network spending must rise about 50% to meet 2030 demand
Meeting electricity demand through 2030 will require annual grid investment to increase by about 50% from $400 billion a year, the International Energy Agency calculates. Annual spending on electricity generation, including new power plants, has risen by almost 70% since 2015 to $1 trillion a year, while annual grid spending has risen at less than half that pace. The IEA warns that delays in grid investment will substantially increase global emissions by prolonging reliance on fossil fuels.
Grid constraints have already curtailed renewable output in China and India, two countries that have installed large amounts of renewable energy but cannot take full advantage of the buildout. Global Energy Monitor and the Center for Research on Energy and Clean Air report that China curtailed 360 terawatt-hours of wind and solar electricity in the first half of 2026, close to the equivalent of the United Kingdom’s annual electricity demand. Ember reports that India curtailed 11 terawatt-hours of solar generation over 15 months spanning 2025 and 2026 because of insufficient transmission and storage capacity. The curtailment in India was enough to power about 10 million homes.
Power grids deliver electricity from power plants to homes through transmission and distribution lines, substations and transformers. Many were designed around large, centralized power plants and built like one-way roads, with producers sending electricity to consumers. Older one-directional grids are being overwhelmed by demand surges and the rapid growth of renewable generation, leaving many systems unable to absorb all the electricity from new, cleaner sources. Grids have a maximum capacity for safely storing, transporting and distributing electricity. When a grid is already at capacity, solar and wind farms can be instructed to limit their output, a process known as curtailment.
Jan Rosenow, a professor of energy and climate policy at Oxford University, said, “Power grids have not been readied enough for the scaleup of renewable electricity generation.” He added, “We have been complacent in the past and now the grid has become a real bottleneck.”
James Abraham, with the New Delhi-based Council on Energy, Environment and Water, said curtailing solar and wind generation while fossil fuels continue supplying electricity is a blow to climate efforts. He called the issue especially consequential because China and India are among the world’s largest emitters. To transition away from fossil fuels, he said, “you need a grid changeover. You need a grid transformation.”
Upgrading existing grids to be more flexible could increase efficiency by allowing electricity flows to adjust to supply and demand. It could help areas with excess solar and wind generation send electricity to places with higher demand and fewer energy resources. Newer, more flexible grids could also make it easier for utility companies to exchange electricity with households that have solar panels or battery storage.
Many countries cannot afford those steps, or cannot complete them quickly enough, Abraham said. He put the constraint this way: “the need is now. It’s a time tension rather than anything else.”
At the United Nations climate talks in Antalya, Turkey, organizers describe modern and reliable electric grids as “the backbone of the clean energy system.” Co-hosts Turkey and Australia want more ambitious goals to slash fossil fuels, install renewable energy and upgrade grids. Billions of dollars are needed to upgrade outdated systems, and the steep costs could hinder further renewable-energy installations. During the United Nations General Assembly in September, the organization launched the Global Grids Accelerator to speed international funding for electricity infrastructure in Africa and Southeast Asia.
Selwin Hart, special adviser to the U.N. secretary-general on climate action, said, “There needs to be a massive, massive, massive scaling up of investments into grids if we are going to get close to meeting our climate, energy and development goals.” He also said, “We’re very confident that the long-term trend is an acceleration of the pace of the energy transition, but we need the infrastructure, grids and storage, to really keep pace.”
Grid concerns have gained urgency as nations race to improve energy security following the Iran war. Gahee Han, with the Seoul-based nonprofit Solutions for Our Climate, said the war’s energy shock built momentum for the energy transition in regions including Southeast Asia, while renewable investment was outpacing grid development in Southeast Asia. “Unless we upgrade our power grid in Asia, Asia will have no choice but to rely on the conventional power plants, like gas or coal,” she said. “It’s nonsense to rely on those power plants, especially considering the energy crisis.”
The Association of Southeast Asian Nations is promoting an interconnected power grid that would let countries trade electricity more easily and provide a safeguard against future shocks. The plan remains in its infancy, but interest is growing, according to Abdul Razib Dawood, executive director of the ASEAN Center for Energy. “We have this crisis that will unify the region. You need your neighbors,” he said. “This is an opportunity for us to really strengthen the cooperation.”