Why this recommendation matters
Grid planning determines what is built, where and when. In many systems the methods used to make these decisions were designed for a different problem. They extrapolate future demand from historic trends, take decisions about centralised generation as their starting point, treat transmission and distribution as separate exercises, and assess investments mainly against peak-capacity and adequacy criteria. As renewables, distributed energy resources and electrified demand grow, these methods systematically misjudge the system. They understate the need for flexibility, overlook the interaction between distribution-level resources and transmission needs, and fail to anticipate the voltage, frequency and stability challenges that arise as inverter-based resources displace synchronous generation.
This recommendation calls for modernising the planning methodologies themselves. Policymakers should introduce scenario-based and probabilistic planning approaches supported by advanced system modelling, so that . Instead of relying on a single demand and generation outlook, planners evaluate multiple scenarios reflecting different pathways for electrification, renewable deployment, and demand growth, while considering climate change and associated risks.
Advanced modelling tools enable planners to assess system stability, flexibility needs, and operational constraints alongside traditional capacity requirements. At the same time, formal coordination between transmission and distribution planning ensures that investment decisions reflect the increasingly interconnected nature of the grid. As distributed generation, storage, and flexible loads grow, distribution-level developments can significantly influence transmission needs. Integrating these planning processes allows system planners and regulators to identify least-cost solutions.
Adopting modern planning methodologies strengthens grid modernization by improving the robustness and efficiency of investment decisions. Scenario-based planning reduces the risk of infrastructure bottlenecks that can delay renewable connections or constrain electrification, while also helping avoid unnecessary infrastructure by identifying flexibility options such as storage, demand response, or network reconfiguration. Integrated planning across transmission and distribution networks also enables more efficient use of existing infrastructure, reducing congestion and supporting faster integration of renewable generation and flexible demand.
How to act on this recommendation
Stage 1
Policymakers should establish the basic regulatory framework that enables modern planning practices.
This includes mandating scenario-based planning in national grid development plans, requiring the use of transparent modelling methodologies, sectoral-level data and projections, and ensuring systematic data sharing between transmission and distribution operators. Regulators should define minimum planning standards and timelines, while system operators and network companies develop the analytical capacity to apply them. Strong links exist with recommendations on increasing transparency and strengthening decision-makers, as regulators must build the expertise to evaluate more complex modelling outputs.
Stage 2
Policymakers should deepen integration across transmission and distribution, and operationalise modern planning methodologies.
This involves integrating multiple planning scenarios reflecting electrification, renewable expansion, and demand flexibility, and formalizing coordination between transmission and distribution planning processes. Regulators should require joint planning processes and/or data exchange protocols between to ensure system-wide optimization. At this stage, there are strong interdependencies with policies on modernizing grid codes and upgrading connection management. Enhanced data transparency and modelling capabilities become critical to support more sophisticated system analysis.
Stage 3
Policymakers should enable fully integrated, adaptive planning frameworks that combine advanced modelling, real-time system insights, and continuous scenario updates.
Planning processes should increasingly incorporate flexibility resources such as storage, demand response, and digital grid solutions. Regulators can require iterative planning cycles, continuous monitoring of system conditions, and dynamic coordination across network levels. At this stage, modern planning becomes closely linked with policies aimed at driving innovation at the grid and sectoral level, building capacity, and integrating across borders. Together, these measures ensure that grid development remains aligned with the rapidly changing needs of a decarbonizing and increasingly electrified energy system.
Core Measures
Implementation Considerations
Modernising planning methodologies generally aligns with the interests of system operators, renewable developers, and large electricity users, as it improves visibility of future grid capacity and reduces uncertainty around network expansion and connection opportunities. However, tensions may arise around investment timing and cost allocation. Regulators and consumer groups may have concerns about potential cost increases. In addition, closer coordination between transmission and distribution planning may require adjustments to established roles, data-sharing practices, and investment responsibilities between transmission and distribution operators. Transparent planning methodologies, open data, and structured stakeholder consultation are therefore essential to build trust in scenario assumptions and investment decisions.
Equity considerations should also be addressed. Scenario-based planning may prioritize investments in regions with faster renewable deployment or stronger demand growth, potentially widening geographic disparities. Policymakers should ensure that planning scenarios reflect diverse regional development pathways, including areas with slower economic growth or lower electrification capacity. Cost allocation frameworks should also be carefully designed so that investments required for the energy transition do not disproportionately increase costs for vulnerable consumers. Embedding transparency, inclusive consultation, and balanced cost recovery mechanisms can help ensure that modern planning frameworks support both efficient grid expansion and equitable energy transition outcomes.
