Why this objective matters
Grid investment must increase substantially to power economic growth and the energy transition; planning will determine whether that investment flows to the right places.
Across the world, supply, storage and demand projects – including solar and wind, batteries, EV charging and large-loads like data centres – are stalled in grid connection queues. This indicates that the binding constraint in the power system has moved from supply to the grid. As renewable energy deployment and electrification are expected to continue at pace, grid investment is projected to have to increase substantially compared to today’s levels in most countries. How that investment is planned will determine whether it is spent well.
Practices for grid planning, and wider power and energy system planning, have not kept pace with the changes they must accommodate. Plans are still commonly developed by extrapolating historic demand growth, led by decisions about centralised generation, and prepared separately for transmission and distribution.
These methods were adequate when most supply was dispatchable, demand was predictable and power flowed one way. They are poorly suited to a system in which variable renewables, distributed energy resources and the electrification of industry, transport and buildings are reshaping foundational planning and operational assumptions, including the level of demand growth and the availability of demand-side flexibility.
Poor planning misses faster and cheaper alternatives and can lock systems into sub-optimal pathways for years or decades.
Where renewable connections wait, domestic solar and wind cannot displace fossil fuel imports, and curtailment and congestion costs rise and are passed to consumers. Where the grid cannot accommodate new demand, electrification projects stall and another cycle of investment in fossil-fuelled alternatives is locked in, which weakens competitiveness and further prolongs dependence on imported fuels. And where planning ignores flexibility and other alternatives for conventional grid reinforcement, systems build grid capacity that faster and cheaper options could have deferred or avoided, adding to connection times and consumer costs.
Planning reform is urgent: given the long lead times of grid infrastructure – 5-15 years to plan, permit and build vs. 1-5 years for renewable supply, storage and electrified demand – the planning decisions taken now set the constraints the system will operate under for years to come.
What’s at stake
Security
Modern grid planning lets countries integrate domestic renewable resources reliably and cost-effectively. This supports self-reliance and reduces exposure to fossil fuel price volatility and supply shocks. Planning for resilience also helps systems withstand extreme weather and other disruptions, increasingly key as electrification continues.
Competitiveness
Renewables and batteries are now often the fastest and cheapest source of new supply. Planning that anticipates future needs and leverages these and other alternatives to conventional generation and grid reinforcement lowers costs and enables timely connections for new demand, like data centres and electrifying industry.
Affordability
How grids are planned today shapes consumer bills for decades. Building capacity ahead of need, valuing wider system benefits, and choosing flexibility over reinforcement where it is cheaper all reduce the total cost to be recovered from consumers.
What this objective calls for
Grid planning has to be reformed along three linked dimensions: how plans are made, when investment can be committed, and what solutions are considered to meet an identified need. Together these move planning from a reactive, wires-default exercise to an anticipatory one that selects the right solution at the right time.
Recommendations
Core Measures
Good Practices
Read more about the objective
Further Reading section, short description
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