 Hello, and welcome to the launch of the International Energy Agency's new special report on electricity grids and secure energy transitions. I'm Jethro Mullen, head of the IEA's communications team, and I'm joined today by IEA Executive Director, Dr Fati Birol, and by the lead authors of the new report. These are the head of our Renewable Integration and Secure Electricity Division, Pablo Javier Koch, and the head of our power system unit, Brent Wanner. They're going to tell you more about what's new in this special report, which I notice free to read and explore and download on our website. So during today's webinar, Dr Birol will make some opening remarks, and then Pablo and Brent will present the key findings of the report. We'll then take questions from journalists. For the journalists taking part in this press webinar, we invite you to submit your questions via the Q&A function in the Zoom. You can do this at any point during the presentation and we'll also take a two minute break right after the presentation for you to send your questions through. We'd also just like to let those of you watching know for your diaries that we have a major report coming out next week as well. On the 24th of October, we will release the 2023 edition of our flagship publication, The World Energy Outlook. So we hope you can join us for that as well. And with that, I'll hand over to our Executive Director, Dr Birol. Thank you very much, Jethro, and greetings to all from International Energy Agency headquarters. As you have heard from my colleague Jethro Mellon, we are presenting one report after another. I would like to start to this launch by trying to explain to you why I specifically commissioned this very report of today. Dear colleagues, when we look at our energy system, there is one trend very, very clear. Namely, the world is going in the direction of clean energy, clean energy transitions, and it is growing very fast. This is a good news. At least IEA believes this is a good news. But at the center of this clean energy transition, there is a major problem, namely the inadequacy of our grids, our electricity networks. I ask my colleagues to come together from different parts of our agency under the direction of Mr. Keske Sadomari, who is the Director of our energy markets and security to carry out a country-by-country analysis. Where are we now in terms of the grids and how to make the politicians, governments, industry, regulators, operators understand that this may be a major, major hurdle for our clean energy transitions. And my colleagues, the two of them are here with you, Pablo Javier Koch and Brent Wenner, with a lot of experts across our agency carried out to our knowledge the first of its kind study and look at the worldwide electricity grids where we are now and what needs to be done. The reason why grids are becoming even more important is the changing the nature of electricity. Both on the electricity consumption side and also electricity generation side. Years and years we have been using electricity in most part of the world, unfortunately not everywhere. And we were using electricity for households, for lighting, for electrical devices, for the computers and also for the industry. But in addition to this existing consumers for electricity, there are new end-users. There are new consumers are joining as consumers of electricity such as the electric cars replacing oil, the heat pumps for heating homes replacing natural gas. More and more we will see the steel and the chemical industry will need a lot of electricity in the context of hydrogen. So there is a change in the consumption of the electricity, new consumers are coming in the picture. And under a generation on the supply side of electricity there is also a change because the years and years the electricity generation has been dominated by fossil fuels. Remember those days the coal is the king days and natural gas and the others. Those days are passe, they are over. Now renewables are growing, solar, wind and the others and as we all know they have their very nature is they have intermittent characteristics. But they are key, they are the major drivers of the world's clean energy transition. And if you look at the IEA's numbers, we know that Brent was telling me the other day his estimates are this year more than 80 percent of all power plants built in the world are renewables. So more than 80 percent renewables led by Sola, the new king and 20 percent all the everything as put together. So there is a change also on the electricity generation, electricity production side and to bring them together, this connecting them together we need strong reliable, adequate amount of grids. My colleagues look at the again country by country in the context of the changing electricity landscape and the government plans how much grids we have to build in the world. And they come up that between now and 2040, less than 20 years of time, the world needs to build or refurbish about 80 million kilometers of grids. And this is the colleagues equal to what we have built in the last 100 years. So what we have built in the last 100 years, we have to build in less than 10, less than 20 years in 17 years exactly in order to make sure that the clean electricity transition is going fast and secure. So this is the challenge we are seeing. If we don't see the grids built adequately there may be a slow down of clean electricity transition and at the same time it may not be as secure electricity supply as we would like to see. So what are the risks if we are not able to do that? If we are not able to build the grids, if the government stick to their policies as they are now which are definitely not appropriate in line with their ambitions on energy and climate. What we see now the biggest risk is the loss of renewable projects around the world are waiting to be connected to the grids. They are just waiting there in the queue. And again my colleagues look at project by project and they have found out that we have today 1,500 gigawatts, at least 1,500 gigawatts of renewable projects waiting in the queue without connection to grid. This is really very, very impressive because what does 1,500 gigawatts mean? This is about five times the renewables connected to grid last year. There is a big queue here and as a result we are seeing we are not making use of those renewables projects. Now where is the problem? The problem is basically the investments. We have seen that in the last 10 years, the last 10 years the renewable investments, renewable generation, electricity generation investments, solar, wind and the others doubled, more than doubled in the last 10 years. But the amount of investment went to grids which will bring this renewables to the consumers remained flat. About 300 billion US dollars flat in the last 10 years. And my colleagues have calculated that in order to have adequate grids which would secure a clean electricity transition, we need to double it from 300 billion to 600 billion US dollars. So it is easy, no, but there is a need to governments to move very, very fast here. And as we see in our report, as my colleagues have calculated, that the cost of not investing, cost of not having the enough grids is much more expensive compared to building the grids. So in our study, we were talking with many governments, regulators, operators around the world. We came up with some recommendations. I would like to pinpoint two of them to you. One of them is the governments need to have planning, right planning and strategic planning for building the grids. Because building a grid takes a long time. On average, it is about 10 years building a grid compared to building a renewable power plant which is two, three years of time. So planning and the foresight and strategic behavior. The second one is the on the investment side, we have to make sure that the grid operators, grid companies are incentivized, renumerated appropriately so that they move and make the necessary steps. So with this, I would like to stop here. Once again, many thanks to the entire IEA team working on this very important, in my view, issue, our director, Mr. Saddamari, as well as the two co-leaders of this work, Pablo and Brandt. With this, I am now passing the word to my colleagues to give a share with you some of the findings of our report. Thank you very much, Dr. Birrell. It is my pleasure to take you through some of the findings of the analysis together with my colleague Brandt here. So indeed, as Dr. Birrell said, we are facing a change in the nature of our electricity systems, both in demand and supply, which will have consequences on transmission and distribution grids. On the one hand, we are seeing a significant change in demand for electricity globally. Part of the change is driven by the growth of demand in industries, buildings, and agriculture. As mentioned before, as industries such as steel and chemicals decarbonize, they will need more electricity. Similarly, heat pumps will displace the use of gas and heating. The use of air conditioning will grow. But on top of that, there are new sources of electricity demand. The growth of electric vehicles, for example, as well as the use of electrolyzers for producing hydrogen will introduce demand that is different and new, both in its geographical location as well as in its operation. Now, on the supply side, the changes are major too, particularly when we look at wind and solar PV. Well, these technologies in electricity supply represented just a few percentage points a decade ago. Today, they cover more than 10% of the global share of electricity supply. In Europe, more than 20%. And if we're looking ahead, this growth is set to accelerate. If all countries meet their national climate pledges on time and in full, then solar PV and wind will account for over 80% of all new power capacity built worldwide. That's double the share that they accounted for over the past two decades. This is a significant change, and grids will need to be fit for purpose. They will need to enable and support this transformation and ensure that they do not become a bottleneck for the energy transition. Unfortunately, the bottleneck is already beginning to form. The slow pace in development of grid capacity means that today, numerous projects of renewable energy are waiting for grid connection. Our analysis shows indeed that at least 1,500 gigawatts of renewable energy projects in advanced stages around the world are waiting in connection queues. These are mostly solar PV and wind projects. This is equivalent to five times the amount of wind and solar PV capacity that was added last year. It's a significant number of gigawatts. A key reason for this is indeed that while investment for wind and solar PV has almost doubled on the last 10 years, the investment in grid has remained stagnant. Our analysis collected all the accessible information from around the world, published and held by relevant organizations. But the available information only covers markets that account for 50% of the installed capacity of the world. So this number could actually be much higher. Improving the data transparency for this connection queues in all markets will be a very important step to help correctly diagnose problems and address them in time. As countries continue to accelerate the permitting of new renewable energy projects, grids will need to keep up to avoid risking this queue becoming even bigger and finding a gridlock. I would like to ask my colleague Brent to share some of the analysis regarding how grid development needs to accelerate and what happens if it does not. Thank you Pablo. And thank you Dr. Brawl for the introduction. Turning first then to grid expansion. Over the last 20 years, grids have grown more than 25 million kilometers around the world. This has been about a 20% increase over the entire period, but this pace needs to accelerate. Over the next 20 years, so going to 2040, grids need to increase about twice as fast and increase by about 50 million kilometers worldwide. And that's to create this necessary link, as Dr. Brawl said, between new electricity demand, new power plants and new sources of flexibility. Transmission needs to expand to bring power from distant wind and utility scale solar projects to cities and citizens. And distribution grids need to be upgraded where solar takes off and electrification moves forward with more EVs, more heat pumps and more electrification of industry. In addition to that 50 million kilometers, we also need to replace the aging infrastructure in many countries around the world. Based on the detailed analysis, about 30 million kilometers of lines are due to be replaced just in the coming two decades. So in total, we need to add or replace 80 million kilometers of transmission and distribution lines by 2040. This is very similar to the current global length of grids. So everything we've built over the last 100 years, and in fact would stretch around the world 2000 times, that 80 million kilometers. So this is a major challenge to keep up with the transitions ahead happening in the clean energy sector. To accelerate that development, both this expansion and modernization calls for grid investment to double to over $600 billion per year by 2030. And this would break a decade of stagnation for grid investment at the global level and put it in lockstep with renewables. Looking at the recent growth rate, this is quite an expansion. So if we just continue growing at what we've been doing in the last few years, there would be a major gap to 2030. And that would be a very serious issue for electricity security overall. Also to accomplish this expansion, we need to increase the material availability. The material needs will increase quite dramatically, a 50% increase for aluminium and the demand for copper for grids would double just by the early 2030s compared to today, as well as other components like electrical steel. But accelerating grid expansion is easier said than done. As the process can be complex, involving many stakeholders and can take many years. Consider the example of planning a power system to be ready in the year 2035. That's a dozen years in the future. And when those decisions need to be taken for grids and the supporting infrastructure, as well as on the renewables and electrification side. For grids, that decision window is already open. Since extra high voltage transmission can take a decade or more to develop, those decision times are approaching or already here. And for high voltage transmission, this needs to be taken by 2030 in most cases, while distribution lines can be replaced and built more quickly. And these timelines are just once the decision is made, not including the broader planning process before it. In advanced economies, those development timelines tend to be longer and can stretch over a decade, in part due to the complexity of regulations, difficulty in finding rights of way through and around urban areas, and political concerns. But much can be done to streamline steps in the process, while maintaining robust public consultation and engagement. In other economies like India and China, development times can be shorter, but still need to be pursued by around 2030 to be ready in 2035. Now these long lead times are especially challenging when we look at how quickly renewables can be built and how fast electrification can move forward. Wind can be developed in under four years in most cases, solar projects in less, even less than a year, while electric vehicle charging hubs can be developed in a few years. And that means decisions for those technologies can be taken well into the 2030s and be ready by 2035. These differences help explain why electricity grids require more advanced planning to stay ahead of the curve and enable clean energy transitions. So what happens if grid development and investment is not able to accelerate to the extent described? We explored some of the potential risks in the report through detailed analysis of a grid delay case. In this case, new wind and solar projects will continue wading in the queue and the integration of renewables remains challenging, failing to fully tap critical new sources of flexibility like demand response. As Dr. Barol highlighted, solar and wind are key drivers of energy transitions. And our finding in this analysis is that the role of solar and wind would still rise, but there would be a growing headwind with every step. This would keep the global share of wind and solar out of electricity generation, almost 15 percentage points lower in the long long term. While that's still remarkable progress compared to where we are today and where we are coming from, it would be devastating for transitions. Over the period to 2050, instead of a 70 percent reduction in unabated coal fire generation and a 40 percent reduction in natural gas fire generation, which takes place if countries are able to fulfill all of their net zero pledges and climate ambitions, our analysis indicates that reductions of coal fired power would be cut in half and natural gas would actually increase over the period rather than substantially decrease. For countries that import fossil fuels, this would mean also additional costs. They would need to import those fuels for longer and more of them, ultimately raising the cost of fossil fuel inputs imports by more than $500 billion to 2050. In turn, power sector CO2 emissions would be almost 60 billion tons higher over the period of 2050 as the pace of reduction slows after 2030. With this trajectory seen in red here, there would be a 40 percent chance of global temperature increases exceeding two degrees Celsius by 2100, so a 40 percent chance of above two degrees compared with a median of 1.7 degrees in the announced pledges scenario, the blue line here. If grids remain the weak link, it would also erode electricity security, raising the likelihood of electricity outages, which are extremely expensive to everyone and already cost the global economy over $100 billion per year today. Now let me hand the floor back to my colleague Pablo Eviacoch for our closing recommendations. Thank you very much, Brent. Indeed, the challenge is significant and the costs of not doing the task correctly are significantly high and for this it is clear that action needs to be taken today and our report provides six main areas where effort should be focused. We need to bring planning up to date and this is essential. Planning needs to be strategic, needs to be integrated across sectors to correctly capture any synergies that may exist. Given the lead times for new grid projects, as it was shown by Brent, a forward-looking approach is essential in order to ensure that the grids will be there when they are needed. An investment will need to be unlocked. An important step, as mentioned by Dr. Birrell, is improving the way that grid companies are remunerated today. This will mean that the grid companies will be able to mobilize the capital to do the investments needed. Additionally, particular focus needs to be given to emerging markets and developing economies to address issues such as the cost of capital or currency risk. The regulatory framework around grids needs to be fit for purpose. Today we need to see grid development taking place proactively and not reactively. We need to ensure that the regulatory framework allows for grid planning and for grid building to take place in order for them to be ready in time. At the same time, streamlining administrative procedures will be important to reduce lead times while still allowing for solid stakeholder engagement. Supply chains need to be ready to deliver the materials and components required, which is a significant step up as shown by my colleague Brent. For this, establishing clear pipelines of grid projects that are firm and transparent will enable the supply chain to develop in a resilient manner. Digitalization will be key. Digitalization of transmission and distribution grids needs to be expanded as soon as possible to support efficiency and security as well as enabling the better use of automation and artificial intelligence. Hand in hand with this, allowing for better use of distributed energy resources. Today there is already a significant need for a high number of skilled white and book color professionals across the entire supply chain for system operators for regulatory institutions, building up this talent pool is essential. At the same time, we need to ensure that digital skills are integrated into the curricula of power industry in educational institutions worldwide. These recommendations are of course global and particular adjustments will need to be taken into consideration for local conditions. But thank you very much. Thank you very much for the presentation. We now have time to take some questions from journalists, so we invite the journalists in attendance to send your questions through the Q&A function of the Zoom if you haven't done so already and please mention your media outlet along with your question when you send it. We're just going to take a two-minute break to give you a chance to enter your questions and we'll be right back. And we're back. So thank you very much to those of you who have sent in some questions. First one is on the costs, the investment. So you say investment in grids needs to double by 2030. That's a global number obviously. Where would the money for this come from and would it raise costs for consumers? And there's also a question on the other side of this. So that's the potential cost, the amount of money that needs to be invested. And then we have a question from Junior Isles from the energy industry times asking what is the total cost of not investing in grids and how can grid companies be incentivized to boost investment? So maybe those two questions I'll pass to Brent. Brent, I know I'm the head of the power systems unit. Thank you very much, Jethro. And thank you very much for the question. I think this is a central point overall of the work and what faces the challenge that faces us for grids. So where would the money come from? Of course this varies by country but generally in advanced economies some of the keys will be that regulation needs to ensure that the appropriate remuneration schemes are there so that companies investing in grids know that they will recover those investments clearly and so those rules need to be to be very clear but that funding is there. Clearly financing in advanced economies is available and can be boosted by government incentives as well. In emerging economies, in emerging market and developing economies the challenge is a bit higher where utilities may not be in the best of financial health and so also bolstering that financial health of those companies is a is a first step that is needed in many places and can be helped also by international finance and support including through multi-national banks, multilateral national banks and this is very critical I think in the end because we've been seeing a worrying trend that emerging market developing economies outside of China grid investment has actually been declining in recent years which is must be reversed going forward so I think overall this doubling of investment is a central part of a secure reliable and efficient and effective transition and electricity sector going forward. It is not the system of yesterday this is to facilitate that we move into the systems of today and tomorrow that power systems are able to be there supporting modern economies and what that means is electricity is more important for every part of the economy which then makes any problem any increase in shortages extremely expensive for example if we have more risks of outages or shortages to industry to households to businesses those costs are immediately very very high today with very low levels of outages it costs the global economy one hundred billion dollars per year but it could easily be an order of magnitude higher if grids are not developed as they should be. Thank you very much Brent the next question is on regulation which an important topic for grids the report says regulators need to behave differently for grids to grow quicker so how can how can this be improved I think Pablo is going to take this question. Thank you very much for your question indeed the regulatory framework is key in order to ensure that grid capacity develops on time at the speed that is needed and that we avoid the gridlock that we've seen in the previous presentation and I would say that the first part of this is a concept of proactiveness and really regulation needs to start evolving in a way that is more forward-looking I think that the focus has been quite centered around the concept of avoiding stranded assets in the past and today we need to start looking at a broader understanding of how can we ensure that we get all the benefit that is possible that we capture all the welfare that is possible from these possible benefits and this is essential particularly thinking about the lead time slide that was presented by my colleague Brent the difference in time between the time it takes to develop a new high voltage line versus new generation units means that if we start approving lines and thinking about the regulatory process for new power lines when they need them it will be too late. Another second point that I would like to highlight is a need to introduce incentives for efficient use of assets so here we're talking about expanding grid capacity and of course new projects will be needed but also improving the use of existing infrastructure. The regulatory framework will introduce the rules the rules of the game and this will define the ability to introduce incentives that will push system operators to better utilize existing infrastructure to be more efficient in their use of infrastructure and here the digitalization will play a significant role so those are two key recommendations I can give regarding the evolution of the regulatory framework. Thank you very much. Thank you Pablo and I think we have time for just a a couple more questions and so we have one on sort of the well actually two kind of looking at the report from a from a broad perspective and the first one is what was the what was the underlying motivation for doing this report this year and then also from Nigel Blackaby from Endit Europe of the six recommendations that are made which are the most important and why I think our executive director will take these two. With pleasure I already tried to explain the motivation. Motivation is very simple and to me very obvious renewables are growing so strongly the solar wind and the others and at the same time the new electricity consumers are penetrating the consumer consumption side so quickly such as electric cars heat pumps and the others the grids are not able to keep up the building of grids and this is a major major hurdle for clean and secure electricity transition and when I talk with the government leaders business leaders and the others unfortunately I don't see that many decision makers comprehend the critical importance of grids if we want to be secure and a clean energy future this was the the key motivation for us to undertake this study and of the recommendations I think all of our six recommendations well thought well designed and the targeted recommendations but if I have to pick up one it is the the need for having the right planning and strategic planning and it's a role for governments as our report shows you need a long lead time to build a grid about 10 years on average and therefore early planning right planning strategic planning would be important I would pick up this one is the key recommendations compared to other FIFI which are also important I hope my colleagues Pablo and Brent agree with me they do it is good so therefore I would put the planning as a key priority for the idea and just one more question if we can squeeze it in quickly from Carolina Kilman from clean energy wire what resources are needed to modernize and expand grids you mentioned copper and electric electrical steel and does this pose a problem for the required expansion besides the need for investment so maybe I will pass this one to Brent if you'd like to have a go at that sure thank you very much for the question I think this link between grids but in general energy infrastructure development and critical minerals, critical materials is very clear and something that the international energy agency is working on more and more with a clear focus on that for grids in particular we think of transmission and distribution lines aluminium and copper are the two main materials that we will need going forward and to fulfill the climate pledges put forward what I mentioned we're talking about increasing the amount of copper, doubling the amount of copper that we need annually over the next even just over a decade which is generally that this is within the known amounts so this is something that the supply chains are aware of and they are planning for but this needs to be very clear so I think the uncertainties we raised about how fast grids can be developed also impacts those supply chains to make those investments in a timely way they need to be well in advance to make sure those materials are ready and that's part of the process as well of this advanced planning so I mentioned copper but aluminium as well we see about a 50% increase in the need for aluminium by the 2030s compared with today which is doable but again requires this planning in addition transformers are an integral part of electricity systems and electricity grids and they require many niche products and components along the way in fact in one very particular they require electrical steel which is very specific for grids and that amount also needs to more than double going forward just by the early 2030s that needs to more than double and that's something that again would be bespoke for grids and so requires that those advanced planning to see ahead and to have the necessary decisions in place not just for the final products and projects but for the supply chain that is all the steps behind that so these are part of this overall integration of planning as well across sectors that needs to happen so industry power sector it requires a connected comprehensive view to make energy transitions happen thank you so that really is all we have time for if any journalists have further questions that didn't get covered during the Q&A that you'd like to follow up on please do reach out to our press office and we'll get back to you as soon as we can thank you very much to Dr. Birrell, to Pablo and Brent and thank you to the journalists for the great questions and thank you to everyone following this event online for your interest in our work as I mentioned the full special report on electricity grids and secure energy transitions is available for free on our website iea.org so please do take a look and just to remind you one more time we do hope you'll join us next Tuesday 24th of October for the launch of the World Energy Outlook 2023 which will cover the full spectrum of fuels and technologies globally providing insights on what the outlook for energy means for energy security for climate for expanding energy access and many other issues so don't miss it thank you and goodbye