Building Grids to Power the Global Economy

Generating abundant clean electricity isn’t the problem. Falling costs and efficient technologies make it possible to build a new wind or solar project within one to five years. 

Meanwhile, the primary assets that are pushing electricity demand higher are being built even faster: one to three years for AI-driven data centers, and two years for electric vehicle charging facilities.

But it can take up to 15 years to plan, permit and build the grids that bring power to people where they need it. Investment in this critical infrastructure has been neglected for decades.

According to the IEA, nearly 50 million miles of grids, the equivalent of the entire existing global grid, need to be added or upgraded by 2040.  

Grid capacity is the bottleneck. Only by stepping up efforts to build resilient power networks that deliver affordable electricity will societies continue to thrive.

There is growing acknowledgment that moving energy to where it’s needed, at scale, is as important as generating it.

Accelerating electricity demand — from industrial electrification, AI growth and economic development — will require new supply capacity at a more rapid pace.

However, connecting new generation sources to existing grids takes far too long. Over 2,500 GW of renewable, large-load and storage projects are currently stalled in grid queues worldwide.

Tackling grid bottlenecks means changing regulations. “In most of these big infrastructure projects, the regulatory permitting takes twice as long as the construction,” says Andreas Schierenbeck, CEO of Hitachi Energy. “It may be an exaggeration, but the current regulatory frameworks were made to save taxpayers money by slowing down the process, to prevent overinvestment, oversupply and overcapacity. It worked – but now our needs have reversed.”

Policy makers are beginning to respond. The UK government, for example, is changing legislation so it can push strategically critical and commercially ready energy projects to the front of the queue.

Investment cannot simply be used to replicate existing infrastructure. Older power system designs can no longer provide the speed, flexibility and functionality that renewable-powered grids require.

In part, that’s because wind and solar generation are naturally intermittent and reduce inertia — a critical element of grid stability created by heavy, spinning masses, like the turbines used in coal- and gas-fired generation.

Hitachi Energy’s advanced power electronics technology has been developed to resolve this issue. Its cutting-edge power control systems respond at the speed needed by modern grids, creating "synthetic inertia" to allow the secure conversion and control of electricity flows.

Maintaining grid stability this way can help power systems accommodate greater volumes of renewable electricity without sacrificing reliability — an important step toward making abundant clean generation translate into affordable electricity for consumers and industry.

As a global electrification leader, Hitachi Energy is working to address today’s most urgent energy challenges. Over 3 billion people already depend on the company’s technologies, developed over more than a century, to power their daily lives. Now, it is focused on building the grid for an electrified future, and empowering societies today and for the next 25 years.

Alongside capacity, affordability and security of supply are clear priorities. Geopolitics has driven policymakers to prioritize energy sovereignty and security, but keeping electricity affordable also depends on the ability to move power efficiently between regions and markets.

Ensuring abundant electricity for all, however, will require moving power across borders. Isolationism is not an option; strategic autonomy will need to go hand-in-hand with interconnection.

“In the past, electricity was generated where the demand was, and the grid was more of a backup safety net. Today, we are not doing that, so there’s a need to transport power over greater distances,” says Schierenbeck.

A key enabler is high-voltage direct current (HVDC), a technology Hitachi Energy pioneered over 70 years ago that has revolutionized power transmission and enabled integration of renewables at scale. It is highly efficient at transmitting large amounts of electricity over long distances.

HVDC links are also creating unlikely connections. “This year, we booked an order that will enable the first HVDC connection between Italy and Africa,” says Schierenbeck. “And nobody would have bet on Saudi Arabia exchanging electricity with Egypt, but the need to rethink energy strategies is driving these interconnections.”

Hardware is only one part of the grid upgrade story. Increasingly, the equipment used is becoming intelligent and automated.

In the future, transformers will be able to diagnose themselves, equipment will signal impending issues, and the grid will operate with far fewer manual interventions.

This requires software that can make sense of the vast volumes of data from energy systems to ensure that assets perform at their highest potential.

Reliable electricity is essential to economic growth; affordable electricity determines how widely its benefits can be shared. For households, it affects living costs. For businesses and industry, it influences competitiveness, investment and the economics of expansion.

Each additional 1% of energy consumption is linked to 0.7% GDP growth. Critically, energy efficiency allows this to be achieved for less: Compared with 2000, today’s global economy produces 36% more GDP per unit of energy.

“Where you have reliable and affordable electricity, you see economic growth,” says Schierenbeck. “This is not about technologies and substations. It’s about how electricity will improve people’s lives — changing how we live, learn, build and care for our planet over the next 25 years.”