The Global Grids Index

Global

This index measures and compares how prepared 10 major energy markets are in constructing the electricity grid of the future.

Grids Index

Index

This index measures and compares how prepared 10 major energy markets are in constructing the electricity grid of the future.

Building powerful connections

Power grids have been a success story since they were first constructed 150 years ago. Today, grids face an unprecedented challenge as they must support most of the effort that the energy transition will require. Grids will be greener, increasingly digital and more decentralized, enabling consumers to generate their own renewable power and distribute it back to the grid. By 2050, a 152-million-kilometer supersized grid—enough cable to stretch all the way to the Sun—and an investment of $21.4 trillion is needed to support a net-zero trajectory, according to BloombergNEF. It also requires stable regulatory frameworks, attractive revenues and digitalization at all levels.

So, which countries are most prepared to connect the renewable energy future? Bloomberg Media’s proprietary algorithm, created in partnership with Iberdrola, from the latest available data collated in 2023 measures who's leading and who's lagging.

Global Grids Index Scores

10 leading renewable energy markets have been scored using BNEF's Net Zero Scenario (100 = on track), using the following criteria:

Renewable Connections

Generation mix 20%**

Connection speed 20%*

Network Development

Network scale 10%**

Combined grid investment 30%*

Digitalization 10%**

Energy Storage 10%**

*Situational KPls: parameters calculated usingavailable data for the period 2020-2023.**Structural KPls: parameters calculated using available data as of 2022-2023.

10 leading renewable energy marketshave been scored using BNEF'sNet Zero Scenario (100 = on track) using the following criteria:

Renewable Connections

Generation mix 20%**

Connection speed 20%*

Network Development

Network scale 10%**

Combined grid investment 30%*

Digitalization 10%**

Energy Storage 10%**

*Situational KPls: parameters calculated usingavailable data for the period 2020-2023.**Structural KPls: parameters calculated using available data as of 2022-2023.

View the Methodology

Country Profiles

100

61.3

60.1

59.7

57.7

55.6

52.2

44.9

42.7

38.7

35.1

View the Methodology

Germany

Renewable Connections

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Network Development

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Digitalization

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Energy Storage

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Index Score

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China

Renewable Connections

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Network Development

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Digitalization

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Energy Storage

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Index Score

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Spain

Renewable Connections

74%

Network Development

52%

Digitalization

99%

Energy Storage

16%

Index Score

59.7

Italy

Renewable Connections

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Network Development

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Digitalization

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Energy Storage

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Index Score

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Renewable Connections

46.5

Network Development

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Digitalization

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Energy Storage

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Index Score

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Australia

Renewable Connections

46.5

Network Development

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Digitalization

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Energy Storage

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Index Score

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Brazil

Renewable Connections

46.5

Network Development

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Digitalization

0---

Energy Storage

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Index Score

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Renewable Connections

46.5

Network Development

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Digitalization

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Energy Storage

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Index Score

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Japan

Renewable Connections

46.5

Network Development

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Digitalization

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Energy Storage

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Index Score

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India ‍

Renewable Connections

46.5

Network Development

53%

Digitalization

0.8%

Energy Storage

21%

Index Score

53%

Germany

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read Germany's profile

China

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read China's profile

Spain

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read Spain's profile

Italy

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read Italy's profile

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read US's profile

Australia

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read Australia's profile

Brazil

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read Brazil's profile

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read UK's profile

Japan

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read Japan's profile

India

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Renewable Connections

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Digitalization

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Network Development

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Energy Storage

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Read India's profile

Global Grids Index Methodology

The Bloomberg Global Grids Index explores how prepared the electricity networks of 10 key countries are to integrate the large amounts of renewable energy capacity being installed in the effort to decarbonize the global economy and reach net-zero emissions. Each country has been assessed on its generation mix; connection speed; network development; the scale of network investment compared to the investment in renewables; smart meter penetration; and energy storage deployments. The performance of each country in these metrics shows how prepared its electricity transmission and distribution infrastructure is to integrate new renewable power into its energy mix.

Renewable Connections

Generation mix

The generation mix looks at how much progress the country has made in decarbonizing its energy system by installing renewable energy capacity, in particular wind and solar, which are key technologies playing a critical role in the energy transition. Several markets have seen an astonishing increase in renewable energy capacity, while others are still dominated by fossil-fuel generation.

Generation mix is calculated as the cumulative wind and solar capacity installed as of 2022 divided by the total system peak demand in 2022. This metric is given a weight of 20% in the overall index.

Source: BloombergNEF.

Connection speed

This metric shows how long it takes renewable energy projects to connect to the grid. In many markets, delays can run into several years. The reasons for this are complex, and include aging transmission infrastructure built to service a highly centralized power system—not one with multiple sources of generation inputting power to the grid.

Often, there is a lack of capacity on the network, which needs to be upgraded to cope with additional power generation. Planning processes can be enormously cumbersome and lengthy, and developers may have to pay fees, which can be so costly that they prevent projects from proceeding. In some markets, there is significant resistance to new overhead lines, which can slow down development or lead to a shift to underground cables, which are more expensive and compete for cable production capacity with the growing demand for submarine cables to service offshore wind farms and undersea interconnectors.

One key issue for developers is a lack of transparency about how long connections will take, making it hard for them to plan. Some regulators are starting to tackle this issue; the US Federal Energy Regulatory Commission, for example, is moving from a first-come, first-served system to a first-ready, first-served process. Some utilities face fines if they take too long to execute network connection plans.

Connection speed is calculated as the average capacity of annual wind and solar installations between 2020 and 2022 divided by the country's 2023 gross domestic product. This metric is given a weight of 20% in the overall index.

Sources: BloombergNEF, IMF.

Network Development

Network scale

The scale of electricity networks in this index varies considerably, from China's grid of more than 12 million km to Germany's grid of 687,170 km. In part, this reflects geography—not just the size of a country, but the distance between cities, and between generation sources and load centers. For example, it would be difficult to justify the economic value of linking Perth in Western Australia or Darwin in the Northern Territory to the network linking the cities in the south and east of Australia.

It is no surprise that the biggest grids are in China, the US, India and Brazil—but even considering the size of the country and its economy, the Chinese grid is vast. This reflects the fact that many of its generation resources, particularly renewable resources, are in remote locations far from the coastal cities where demand is concentrated.

Network scale is calculated using a composite scale variable (CSV), harmonized by GDP, as a benchmarking tool employed by UK energy regulator Ofgem to assess capital expenditures for electric utilities. There are various versions of these composites, but the one used in this metric is as follows

CSV = Number of customers in millions ^0.5 x Annual energy consumption in TWh ^0.25x Network length in thousand km ^0.25

This method estimates the number of customers by calculating the number of households in the market, annual energy consumption and network length, which includes transmission and distribution grids above 1 kilovolt. This metric is given a weight of 10% in the overall index.

Sources: BloombergNEF, Ofgem.

Combined grid investment - divided into:

Grid investment to network scale

This metric assesses the amount of money being invested in the network compared to its current size, which gives a sense of whether sufficient resources are being allocated to the grid.

There are many paradigms for upgrading power systems. Some network operators have an "invest and connect" approach: They invest in the grid and then connect power generation projects when there is sufficient network capacity. Others operate a "connect and manage" system, allowing generation projects to connect to the network by managing the grid through curtailment, while the wider work of network reinforcement happens in parallel. The UK has one such system, but because the pace of grid connections has been so rapid, it has fallen behind in upgrading the grid and has hit the limits of what "connect and manage" can achieve.

This metric is calculated by dividing the investment in transmission and distribution grids in 2022 by the network scale metric calculated above. This metric is given a weight of 20% in the overall index.

Source: BloombergNEF.

Grid investment to renewable energy investment

Renewable capacity is often clustered in areas where wind or solar resources are high and development costs are low, but these resources are often long distances from the centers of demand. That means that integrating more renewable energy often requires more investment in electricity networks. For every dollar spent on renewable energy, how much is being spent on the grid? Long-term modeling suggests that this figure should trend toward 1:1 to align with a net-zero pathway.

This metric is calculated as the annual investment in transmission and distribution grids in 2022 divided by the average annual investment in renewable energy generation between 2020 and 2022. This metric is given a weight of 10% in the overall index.

Source: BloombergNEF.

Digitalization

Smart meter penetration

Digital technologies are crucial to the energy transition because the amount of new linear infrastructure needed for the energy transition cannot be built immediately, and therefore, every power line must be used as effectively and efficiently as possible.

According to the International Energy Agency, "Digital technologies can greatly improve the functioning of power grids to help successfully integrate clean energy sources, but a lack of investment in these networks could slow down the energy transition and increase costs, particularly in emerging and developing economies." The IEA says that digital technologies could save $1.8 trillion of grid investment globally through 2050 by extending the lifetime of grids, while also helping to integrate renewables and minimize supply interruptions.

A crucial first step in digitalization is smart meter penetration. Smart meters are an integral part of digital power architecture, giving consumers and producers greater awareness of how much power is being consumed and when. This transparency opens up the possibility of new products and services, including variable tariffs that encourage consumers to lean into the growing availability of renewable energy. Smart meters also enable homes that produce their own energy—primarily through solar PV—to sell their power back to the grid or to their neighbors.

Smart Meter Penetration is the share of customers with a smart meter. This metric is given a weight of 10% in the overall index.

Sources: ACER, Australian Energy Market Commission, Astute Analytica, Berg Insight, BloombergNEF, GII Research, Smart Energy International, UK government.

Energy Storage

Storage deployments

Energy storage can make an energy system balance out the intermittency of renewables and reduce the need to use fossil generation. It plays a crucial role in integrating renewable energy into the grid, allowing variable generation sources such as wind and solar to supply power more reliably and at times when it is most needed. Energy storage combined with the increased visibility offered by smart meters gives consumers and utilities more flexibility and lowers costs.

This metric is calculated as the sum of battery storage and pumped hydro capacity as of 2022 divided by the cumulative wind and solar capacity as of 2022. This metric is given a weight of 10% in the overall index.

Source: BloombergNEF.

Index data compiled August 2023–October 2024

The Grid Readiness Index