The International Energy Agency (IEA) has released its Energy Efficiency 2023 report, which calls for enhanced grid investment and addresses how to secure a global energy transition through grid innovation and energy efficiency.
For Africa – which faces substantial central grid losses due to a lack of transmission infrastructure – the topic is particularly pressing. The continent has long struggled to attract sufficient investment in smart energy solutions, owing in part to insufficient regulatory frameworks and lack of competitive business models for distribution and transmission.
According to the IEA, 80 million kilometers of grid need to be added or replaced over the next two decades globally. For grid development to keep pace with the growing energy transition, renewable energy investment must be accompanied by parallel investments in energy efficiency and grid reinforcement.
“We have seen investment in renewables growing significantly in the last two decades, but we haven’t seen the same in grid investment, which has remained stagnant around $300 billion per year. We need to roughly double this,” stated Pablo Hevia-Koch, Head of the Renewable Integration and Secure Electricity Unit at the IEA during Enlit Europe in Paris on Tuesday.
In Africa, renewable energy investment has skyrocketed in recent years, particularly in hotspots like South Africa, Egypt, Kenya, Ghana, Senegal and Rwanda. In order to ensure investment across the entire clean energy supply chain – and that grid capacity matches installed renewable generation capacity – new financing tools are required that leverage private capital and concessional finance, and reduce dependency on state funds.