The renewable energy sector is on fire, with global capacity expected to surge by nearly 20 percent in 2024, building on the staggering 60 percent growth seen in 2023. This rapid rise, predominantly driven by solar PV and wind power, is reshaping the global energy landscape. However, as the International Energy Agency (IEA) highlights in its Renewables 2024 report, this transformation isn’t without its hurdles. The bottlenecks of grid congestion, curtailment, and inadequate infrastructure threaten to stymie the seamless integration of variable renewable energy (VRE) into existing power grids.
The numbers are eye-popping: in 2024 alone, nearly 680 GW of new renewable capacity is expected to come online, with solar PV contributing around 400 GW and wind adding another 150 GW. China is leading the charge, accounting for roughly 60 percent of this global growth, while the EU, the U.S., and India are ramping up their deployment efforts. But here’s the kicker: as this capacity expands, so does the strain on transmission and distribution networks. The result? Increased curtailment rates and grid congestion, particularly in areas where infrastructure investment has lagged.
Curtailment, the practice of reducing output from renewable sources because the grid can’t handle it, is a growing concern. Countries like China, Germany, and the U.S. are seeing curtailment rates for wind and solar soar between 5 percent and 15 percent of total generation. In China, solar PV curtailment rates hit nearly 3 percent in the first quarter of 2024, reflecting grid constraints in regions with rapid capacity additions. The IEA warns that every 1 percent increase in curtailment could lead to billions of dollars in lost revenue globally. That’s not just a hit to the bottom line; it’s a massive inefficiency in energy markets that could derail the progress we’ve made.
Grid congestion is another thorn in the side of renewable energy integration. With at least 1,650 GW of renewable capacity waiting for grid connections—an increase of 150 GW from 2023—transmission networks are bursting at the seams. In the U.S., over half of new solar and wind projects are facing connection delays stretching beyond two years due to lengthy permitting processes and regulatory hurdles. The EU is attempting to tackle this with new regulations aimed at simplifying the permitting process, but local opposition and administrative challenges still loom large.
As we grapple with these challenges, the need for grid flexibility becomes paramount. Energy storage systems and demand response measures are essential for balancing supply and demand, especially during periods of low renewable generation or peak demand. The global battery storage capacity is anticipated to grow by 30 percent in 2024, yet it still falls short of what’s needed to manage the variability of solar and wind energy. Demand response programs in Europe have shown promise, reducing peak demand by 5 percent in 2024 and alleviating some pressure on the grid.
However, the real kicker lies in the infrastructure investment gap. While renewable generation investments are surging, spending on transmission and distribution networks has not kept pace. The IEA estimates an additional USD 200 billion in annual investment is needed globally to upgrade and expand these networks through 2030. This gap is particularly pronounced in emerging markets and developing economies, where high financing costs and weak policy frameworks stymie infrastructure development.
The IEA’s report paints a clear picture: addressing these bottlenecks is crucial for unlocking the full potential of renewable energy. With coordinated policy efforts, increased investment in grid infrastructure, and innovative solutions like energy storage, the vision of a low-carbon future is more than just a pipe dream. It’s achievable. The world is racing towards its climate goals, and the path forward demands that we tackle these integration challenges head-on. The stakes are high, but with the right investments and frameworks, we can transform the renewable energy landscape into a resilient, sustainable system that benefits all.