Grid and storage readiness is key to accelerating the energy transition

Connecting renewable energy to the power system needs grid infrastructure, both at transmission and distribution levels, including overhead lines, underground and submarine cables and power substations. Despite the obvious, this fact has been widely overlooked in several regions. Urgent actions must be taken to avoid lagging grid infrastructures, which would delay the energy transition.

The tripling renewable power capacity target by 2030 makes planning and investing in grid development even more urgent. Unlike concentrated generation based on fossil fuel or large hydro power plants, wind and solar generators are distributed along extensive areas and multiple locations. This requires expanding the grid to allow them to connect and to deliver the power in quantities needed, where and when it is needed. The reliable and accessible electricity supply to meet increased power demands required by electrification of transport, heating and cooling, and industry, together with the surge of the information technology electricity needs, will be based on grid infrastructure.

However, deploying grid infrastructure is not done overnight. Due to its nature, power lines need to consider social and environmental impact across big areas, along all their routes, involving lengthy planning and permitting processes and engaging multiple stakeholders, which consume a lot of time, potentially delaying deployment. Together with streamlining these processes, anticipatory investments can compensate these time needs and are essential to unlock grid expansion and prevent future bottlenecks.

Solar photovoltaics (PV) and storage: better together

An enormous decline in costs of solar PV panels and batteries is observed in the past years, with equipment price reductions of around 90% between 2010 and 2023. This trend is likely to continue due to technologies advances, the manufacturing techniques and growing economies of scale.

To maximise the use of the solar energy that is available some hours of the day, the electricity production from the panels must exceed the needs in that period, so that excess can be stored and utilised later, until the sun shines again. This is possible with battery energy storage systems (BESS). Advances and cost reduction in BESS have just made this technology competitive and particularly suitable for short-term storage, allowing the use of clean solar PV energy also during the hours after sunset, when the demand patterns tend to have their peak.

Although the convergence of solar PV and energy storage technologies is essential, realising their full potential requires overcoming systemic challenges, involving clear and supportive policies and tackling business risk aversion. Governments must implement energy strategies that explicitly promote solar power and storage integration, aligning these with broader climate and energy transition goals.

Based on the specific characteristics of each power system, national and regional policy makers should assess, among the portfolio of supporting measures, quantifiable targets for energy storage, supporting these ambitions with long-term incentives and robust regulatory frameworks. In parallel, industry and finance actors can become leaders by complementing policy efforts with boldness in pursuing and taking advantage of energy transition business opportunities.

Depending on the national contexts, regulatory reforms might be needed to ensure that storage systems' capabilities -such as balancing grid variability, enabling peak-shifting, and increasing system resilience -are allowed and recognised. Avoiding inefficiencies, such as double charging for grid access, is essential to create fair and competitive markets that attract investors.

Partnerships and innovation to generate socio-economic benefits

As the energy storage market matures, fostering public-private partnerships gains more relevance in two key fields. On the one hand, collaborations to develop quality infrastructure frameworks are needed to favour universal safety and harmonised operational standards and certifications. On the other, partnerships are needed to create and implement funding schemes that can scale-up supply chains and leverage technological readiness. As a result, cost-efficiency in manufacturing is improved, equipment reliability is enhanced, and priority is given to deployment of storage solutions in locations where they can add more value to the power systems.

In addition, integrating renewables efficiently into the power grid requires modernised infrastructures. Smart electrification strategies include innovative grid management tools, which optimise energy flows, minimise curtailments, and enhance system resilience. These tools, which potential is multiplied when combined with storage, can stabilise renewable energy supply, allowing reduced dependency on fossil fuels for power system balancing while lowering electricity prices.

Investing in grid infrastructures also brings significant and extensive socioeconomic benefits that are complex to quantify. Upgraded grids can electrify remote communities, empower rural economies, and support distributed access for emerging industries and users, such as electric transportation, green hydrogen production and data centres.

The Path Forward

The most critical step to define effective and efficient objectives for the deployment of storage and grids that meet the specific needs of a country is the integrated assessment of the national power generation mix and flexibility sources. As proposed in the World Energy Transitions Outlook 2024 by the International Renewable Energy Agency, 1 to 2 megawatts (MW) of energy storage per 10 MW of renewable power capacity added can act as general reference, while the needed characteristics such as duration and specific size will depend on availability of the multiple and diverse flexibility sources.

In a similar way, although grids reinforcement is an urgent need to avoid bottlenecks in the renewable electricity flows, expansion must be tailored to national needs. An early assessment of these needs and the inclusion of its outcome in the Nationally Determined Contributions (NDCs) and national energy strategies can notably support the timely achievement of the decarbonisation targets.

In conclusion, the path to triple renewable power capacity by 2030 and beyond requires the expansion and modernisation of grids and scaling-up of storage capacities. This path must not be taken in silos. Governments, private sector, international organisations and financial institutions must collaborate to address related regulatory gaps, establish clear standards, and prioritise investments in these critical enablers that create positive socioeconomic impact.

For more discussion on grids and storage, watch a session of IRENA's 15th Assembly on 11 January 2025, titled 'Key Enablers for the Energy Transition: Grid and Storage', to be livestreamed here.

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