Global Renewable Energy Growth Faces Challenges
Last year, global renewable energy installations reached an all-time high of 692 gigawatts (GW), but a decline is expected for 2023, marking the first decrease in five years. The rapid expansion of solar and wind power capacities has outpaced the development of transmission infrastructure, leading to disruptions in the deployment of new facilities.
In a recent interview with Reuters, Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA), forecasted a reduction in global renewable energy installations for the current year. The primary factors behind this projection are the shortage of transmission networks, trade barriers, and a slowdown in China's deployment pace.
According to IRENA, global renewable energy capacity increased by 692 GW in 2022, reaching a record-breaking 5,149 GW. Renewable energy now accounts for approximately 49% of the world's total power generation capacity.
Transmission Grid Woes Curb Clean Energy Expansion in China, Japan, and Australia
In China, the world's largest market for renewable energy, the rapid increase in solar and wind power installations has led to a unique challenge. Despite the country's ambitious renewable energy goals, the transmission grid's capacity has struggled to keep up, resulting in output restrictions and a reduction in power generation.
Solar and wind power generation is inherently variable, dependent on weather conditions and time of day. When power demand is low, generation can be concentrated during these periods, leading to a surplus of energy. Additionally, the lack of adequate transmission infrastructure to transport electricity from production regions to consumption centers further exacerbates the issue. Even with additional installations, the power grid's limitations mean that actual electricity supply remains stagnant.
Japan and Australia are also facing similar transmission grid constraints, hindering the expansion of their renewable energy sectors. In both countries, the delay in expanding transmission infrastructure has become a bottleneck for the commercialization of renewable energy. Renewable energy projects are often located in remote areas, far from urban centers and industrial hubs with high power demand. Constructing long-distance transmission lines requires extensive permitting, land acquisition, and community engagement, often resulting in prolonged project timelines compared to the development of the power generation facilities themselves.
These transmission grid challenges highlight the critical need for comprehensive planning and investment in energy infrastructure to support the global transition to cleaner energy sources.
Global Energy Transition Faces Challenges, IEA Warns
"The slowdown in China's growth will be difficult to offset by increased installations in other regions," said La Camera, the Executive Director of IEA. He refrained from providing specific forecasts for this year's installations.
2,500 GW Awaiting Grid Connection...Investment Expansion Inevitable
According to the IEA's report, "Energy 2026," released in February, projects awaiting connection to the power grid worldwide have surpassed 2,500 GW. This figure includes not only renewable energy generation facilities but also energy storage systems (ESS), data centers, and other large-scale power-demanding facilities.
Source: IEA (February 2026) - Global Renewable Energy and Battery Grid Connection Status as of 2025
The IEA analyzed that global power grid investments, currently at approximately $400 billion annually, must increase by 50% by 2030. This equates to a need for roughly $600 billion annually, requiring substantial investments across the entire power infrastructure, including ultra-high voltage transformers and transmission equipment.
Power Grid Expansion: A Critical Link for Domestic Energy Companies
The demand for an expanded power grid is closely tied to the overseas ventures of South Korea's power equipment manufacturers. HD Hyundai Electric and Hyosung Heavy Industries are ramping up their supply of high-voltage transformers and other power infrastructure in North America. Recent orders include AI data center-related power facilities, but the expansion of renewable energy generation capacity is also a key driver of increased investment in transmission and distribution networks.
"The main reason why this year's new installations won't break last year's record is the imbalance between generation capacity and the ability to transmit and distribute power," said La Camera, IRENA's director-general.
The renewable energy industry, which set a new record for installations last year, is now facing constraints due to a lack of transmission capacity. Even with more solar panels and wind turbines, there is no way to transmit the generated electricity, making it challenging to increase actual power supply. The transmission grid, which has struggled to keep up with the pace of new power plant construction, is now slowing down the construction of additional generation facilities.
