New York and London, March 2, 2023 – Electricity grids are the backbone of the energy transition, yet the networks we have today are not ready for the future. At least $21.4 trillion needs to be invested in the electricity grid by 2050 to support a net-zero trajectory for the world, according to a new report from BloombergNEF (BNEF). The New Energy Outlook: Grids report, published today, provides a more detailed breakdown of the grid analysis presented in BNEF’s New Energy Outlook 2022 Net Zero Scenario.
The total investment comprises $4.1 trillion to sustain the existing grid and $17.3 trillion to expand the grid for new electricity consumption and production. Annual investment triples from $274 billion in 2022 to $871 billion per year in the decade preceding 2050. Significant policy intervention is required to realize this scale of investment in the grid. This includes streamlining the permitting processes to reduce the number of permits required for a project, consolidate the review process among different agencies, and establish clear time frames for approval. To ensure grid modernization can accelerate, reforms are needed to create right incentives for utilities to pursue digitalization and grid flexibility.
Annual expenditure on distribution networks more than triples to about $533 billion by 2050, from $147 billion today. As renewables expand, grid expenditure leans towards building greater redundancy in the distribution grid, enabling bi-directional […]
