Warning from the International Energy Agency in the 2025 Report
In the latest annual report released by the International Energy Agency (IEA) in the first half of 2025, a serious warning was issued about the state of power grid infrastructure worldwide. According to the report, to maintain sustainable energy transition and meet climate goals by 2030, investment in power transmission and distribution grids must double from current levels.
Current Investment Status in Power Grids
- In 2024, approximately $400 billion was invested in power infrastructure (including transmission, distribution, and digitalization)
- While investment in renewable energy generation (solar, wind, etc.) exceeded $1.4 trillion last year
- The growth ratio between clean energy production and grid development has become alarmingly unbalanced
In many countries, solar and wind projects remain years in waiting due to lack of grid connection capacity.
Future Forecast and Needs by 2030
According to announced scenarios:
- To align infrastructure with Net-Zero goals, annual investment must increase from $400 billion to $800 billion by 2030
- Over 8 million kilometers of new or upgraded transmission and distribution lines must be built annually (equivalent to double the current US grid)
- Project permitting times must be reduced from an average of 7–10 years to less than 3 years
Why Has the Power Grid Become a Bottleneck?
- Policymakers focus on generation rather than transmission and distribution
- Increased electricity consumption from electric vehicles, cooling, industry, and digitalization
- Inability of traditional grids to manage intermittent energies (such as wind and solar)
- Increased connection of distributed generation sources like rooftop solar panels and EV charging stations
Regional Analysis: Which Countries Are Most Lagging?
Region | Current Status | Main Need |
🇪🇺 Europe | Increased clean generation, but very slow permitting | Permit reform and digital upgrades |
🇺🇸 USA | High generation investment, aging grid | Build high-voltage lines and reduce legal barriers |
Asia | Rapid demand growth | Develop urban and rural distribution networks |
🇦🇪 Middle East | Focus on solar energy | Regional grid connection and expand transmission capacity |
IEA’s Recommended Solutions
- Reform permitting policies for grid projects
- Government support for grid modernization projects via subsidies and green financing
- Increase private sector and regional operator participation
- Use digital technologies, smart grids, and AI to optimize the grid
- Synchronize investment in generation and transmission in national energy plans
Economic and Industrial Opportunities
Increasing grid investment is essential not only for the environment but can also:
- Create millions of direct and indirect jobs in construction, installation, and maintenance
- Help reduce electricity prices and prevent widespread outages
- Provide a platform for electric transportation growth and green hydrogen production
- Increase the economic value of renewables-connected power plants
The UAE’s Position and Companies Like Aras Energy
The UAE, as a leader in solar energy, is currently challenged by grid development lagging behind production growth. Massive projects like Al Dhafra Solar Plant, Noor Abu Dhabi, and hydrogen project expansions require strong and modern transmission infrastructure.
Companies like Aras Energy can play a significant role by focusing on:
- Designing and implementing high-voltage transmission lines
- Participating in smart grid and network automation projects
- Supplying digital grid equipment such as sensors, SCADA, and IoT systems
- Collaborating with DEWA and TRANSCO on Dubai and Abu Dhabi grid upgrade projects
The IEA’s 2025 report is a wake-up call to all governments and energy industry players. Developing power generation without developing grid infrastructure delays the clean energy transition and threatens energy sustainability.
Moving forward, simultaneous development of the grid, storage, and clean energy generation is the only path to achieving the real Net-Zero vision.
