A rapid surge in global electricity demand driven by AI, data centers and electrification is exposing critical grid and infrastructure bottlenecks and outpacing the ability of power systems and infrastructure to keep up, according to experts.
Global electricity demand is rising sharply as the world enters the "Age of Electricity," driven by electrification, data centers, AI and electric vehicles.
According to the International Energy Agency (IEA), demand is expected to increase by 40% to 50% by 2035, with the global power system needing to add around 1,000 terawatt-hours of new demand each year, roughly equivalent to Japan's annual electricity consumption.
The surge is exposing infrastructure bottlenecks, with grid approval processes in the US and Europe taking up to a decade, long nuclear construction timelines and heavy equipment supply constraints expected to persist until 2030.
While investment in power generation has climbed 70% since 2015 to about $1 trillion a year, grid spending has lagged at around $400 billion, leading to congestion, delays in connecting renewable projects and higher electricity prices.
David Fishman, senior energy expert at Hong Kong-based consulting firm Lantau Group, told Anadolu that everything, including wind, water, solar, nuclear, even some thermal (gas) in selected areas has to expand, along with accompanying scale-up of grid and storage.
"I see demand-side solutions like demand response programs or energy efficiency to be merely complementary, not sufficient by themselves. For short-term expansion in wealthy countries, renewables + storage probably make the most sense. For medium- to long-term expansion, they can also consider adding in some nuclear," Fishman said.
"I'd hope to see thermal expansion used very selectively, and primarily in developing nations, for which access to thermal power generation should be considered an equitable and fair expansion of their energy supply. This can only be achieved if developed (rich) nations place more effort on low-carbon power and reduce thermal usage, which frees up a little more carbon budget for developing nations to build some thermal power if they need," he added.
Fishman noted that nuclear "can't and won't" scale quickly enough for the current major drivers of demand growth in the US and Europe - namely the AI data center boom.
He said that AI data centers are being built on an 18-month business cycle while nuclear plants can take up to 2-3 years before construction for permitting and site safety evaluations and a 60-month construction cycle.
Nuclear is part of the long-term net zero solution, but not the short-term demand boom solution, he added.
He said that renewables plus storage can scale "fast enough," but the quality of the power is still not what is needed for certain kinds of loads (firm, dispatchable, round-the-clock power) which will open space for thermal.
"This will be more relevant in countries that can't/won't import Chinese clean tech equipment due to geopolitical barriers (or trade barriers like tariffs). In countries that can access more affordable equipment from China, they'll be able to scale more with just renewables plus storage, with having to consider thermal power," he said.
Fishman said that even with improvements in grid and flexibility technology, other bottlenecks will still be relevant.
"The most critical one in my view is probably the grid interconnect queue, which is up to at least 5 years in most places in the US and up to 7-10 in some parts of the US and Europe," he explained.
"Nothing will come online while they are stuck in the review queue," he said.
He noted another bottleneck is heavy equipment and said that "gas turbines at the 3 major producers (GE Vernova, Siemens, Mitsubishi) are back-ordered out to 2030, so even if you wanted to build a new gas-fired power plant, you wouldn't be able to get your turbine for over 5 years potentially."
"Compared to these, the needs for grid investment (both distribution and transmission) and storage expansion are just examples of 'another' critical bottleneck, not 'the' critical bottleneck," Fishman said.
- Nuclear energy strategic choice connected with security
Wojciech Jakobik, an energy expert and founder of the Poland-based Energy Security Centre, said that the most conservative scenario of meeting the surge in power generation is to go through energy transition in stages, depending on local situation around the world.
He said that countries that are most advanced will decrease CO2 emissions further with the limitation that the 100% RES generation is not possible yet.
"They will invest in new technologies, especially energy storage projects, to develop the most flexible energy mix possible. Less developed countries will change their baseload from coal to gas, from gas to nuclear. The pace will depend on the competetiveness of their economies. Sometimes the energy price will be the priority over decarbonization," Jakobik said.
Jakobik said that renewables are scaling incredibly fast, but they create systemic challenges.
"You need to meet growing renewable generation with flexible capacities in standby, and in most countries, you still need to subsidize baseload capacities," he said, adding that RES will not replace baseload capacities of different kinds as fast as it was predicted in the past.
There are multiple reasons outside of energy sector: inflation, supply chain risks, growing geopolitical uncertainty, he explained.
Jakobik noted that nuclear generation is to grow slower than RES but it brings strategic advantages.
"Nuclear energy is a strategic choice connected with security and foreign policy considerations like with choosing US partners for Polish NPP. Rising geopolitical tensions bring the issue of nuclear proliferation to this picture," he said.
He added that the main risks for CEE energy security are the strained supply chains and bottlenecks all over the continent, especially when it comes to SOS in Danish Straits and Baltic Sea.
"All non-Russian supply is coming through those bottlenecks and it is relatively easy to create an incident hampering the supplies. That is why in short term the most important thing is to secure the critical infrastructure there and in long term to decouple from fossil fuels risks totally as soon as it is possible in spite of mid-term challenges for energy transition," Jakobik explained.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr
