Tracking report
Smart Grids
Tracking progress 2021
Smart grids
Electricity grid investments are expected to reach about USD 290 billion in 2021, recovering from 2020 and even surpassing the 2019 level of about USD 270 billion. The considerable expansion plans expected for 2021 are likely to reverse last year's trend.
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A smart grid is an electricity network that uses digital and other advanced technologies to monitor and manage the transport of electricity from all generation sources to meet the varying electricity demands of end users. Smart grids coordinate the needs and capabilities of all generators, grid operators, end users and electricity market stakeholders to operate all parts of the system as efficiently as possible, minimising costs and environmental impacts while maximising system reliability, resilience and stability.
Smart grids comprise a broad mix of technologies to modernise electricity networks, extending from the end user to distribution and transmission.
Not only can better technologies for monitoring, control and automation stimulate the development of new business models, they can unlock system-wide benefits including reduced outages, shorter response times, deferral of investments to the grids themselves and distributed energy resource integration.
At the end-user level, smart grids can enable demand flexibility and consumer participation in the energy system, including through demand response, electric vehicle (EV) charging and self-produced distributed generation and storage.
Demand flexibility can increase the overall capacity of the system to integrate variable renewables while accelerating the electrification of heating, cooling and industry at a lower cost. Deploying a physical layer of smart-grid infrastructure – underpinned by smart meters – can help unlock these benefits.
Smart grids comprise a broad mix of technologies to modernise electricity networks, extending from the end user to distribution and transmission.
Not only can better technologies for monitoring, control and automation stimulate the development of new business models, they can unlock system-wide benefits including reduced outages, shorter response times, deferral of investments to the grids themselves and distributed energy resource integration.
At the end-user level, smart grids can enable demand flexibility and consumer participation in the energy system, including through demand response, electric vehicle (EV) charging and self-produced distributed generation and storage.
Demand flexibility can increase the overall capacity of the system to integrate variable renewables while accelerating the electrification of heating, cooling and industry at a lower cost. Deploying a physical layer of smart-grid infrastructure – underpinned by smart meters – can help unlock these benefits.
Last updated Jan 7, 2022
Key findings
Investment spending in electricity networks by region, 2016-2021
OpenInvestment in smart grids are expected to grow, with rising infrastructure spending
After declining for the fourth consecutive year in 2020, constrained by the Covid-19 pandemic, investments in electricity grids are expected to grow by 10% in 2021 with rising infrastructure spending in Europe, China and the United States. Ambitious expansion and recovery plans are being included in policies to achieve more resilient and digital grids, as part of the drive to achieve carbon-free electricity generation. Nevertheless, to achieve the objectives of the Net Zero Emissions by 2050 Scenario, the level of grid investment should triple by 2030, especially for smart grids and digital investments, which should account for around 40% of total investments in this decade.
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The ISGAN TCP is a strategic platform to support high-level government attention and action for the accelerated development and deployment of smarter, cleaner electricity grids around the world. Operating as both an initiative of the Clean Energy Ministerial, and as a TCP, the ISGAN TCP provides an important channel for communication of experience, trends, lessons learned, and visions in support of clean energy objectives as well as new flexible and resilient solutions for smart grids.
