Aging Grids Under Strain

The success of global energy transitions depends on modernization of outdated power grids originally designed for centralized, fossil-fuel based power generation. Aging power infrastructure now faces the challenge of accommodating decentralized renewable energy. Without significant upgrades, the electrical grid risks becoming the bottleneck in achieving net-zero targets.
To meet the 1.5°C stretch target established in the 2015 Paris climate agreement, the International Energy Agency (IEA) estimates that 80 million km of grids—equivalent to all electrical grids combined globally today1— must be built or upgraded by 2040. This unprecedented scale adds complexity to global grid modernization efforts. According to insights from the IEA, modernizing power grids requires addressing three key challenges:

1. Capacity Strain 
Electric vehicles (EVs), AI-driven data centers, and heat pumps are driving energy demand to new heights. In many regions, grid capacity must double or even triple to meet the growing demand, placing immense strain on existing infrastructure.

2. Delays in Renewable Energy Integration
As of Jul 2024, 1,650 GW of wind, solar PV, and hydropower energy capacity were waiting on approvals for grid connections2 due to regulatory barriers, infrastructure bottlenecks, and funding challenges.

3. Regional Grid Disparities
Grid systems vary significantly by region, creating unique challenges. For example, the State of Texas in the U.S. operates a near-isolated grid with limited interconnections, necessitating localized and tailored solutions for resilience.

Key Pillars of Grid Modernization

While these challenges are daunting, grid modernization holds the key to a successful energy transition. Moxa identifies three strategic pillars for transforming energy systems:

1. Digitalization With IEC 61850
Initially developed for substation automation, IEC 61850 has become a cornerstone for the broader energy ecosystem. Its standardized communication protocols—such as Manufacturing Message Specification (MMS), Generic Object-Oriented Substation Event (GOOSE), and Sampled Measured Values (SMV)—facilitate seamless data exchange, ensuring system-wide consistency and reliability and deployment efficiency. The IEC 61850 framework enables:

• Interoperability: Simplify integration of devices from multiple vendors, reducing system complexity.
• Consistent Data Models: Support real-time operations and enhances the integration of distributed energy resources (DERs).
• Future-ready Systems: Scale to accommodate multidirectional energy flows and evolving grid demands.

2. Energy Storage as a Stability Anchor
Battery energy storage systems (BESS) are vital for energy balancing with intermittent renewable energy sources and maintaining grid stability.

• Frequency Stability: Respond within milliseconds to correct frequency deviations by either absorbing excess power or releasing stored energy, maintaining the grid’s frequency stability.
• Dynamic Generation and Load Balancing: Store surplus energy during off-peak periods and supply it during peak demand.

3. Consumer Empowerment in Energy Transition
Consumers are evolving from mere passive users to actively participating in the energy ecosystem.

• Demand Response Programs: Encourages shifts in energy usage to relieve grid pressure during peak times.
• Distributed Storage: Empowers communities to store and use renewable energy locally, enhancing grid reliability.
• EV Integration: Smart EV infrastructure, built on intelligent charging management, is paving the way for electric vehicles to support grid flexibility as mobile storage assets.

Global Success Stories in Grid Transformation

1. Thailand: Powering Its Rise as Southeast Asia’s Energy Hub
Thailand is using smart meters to analyze consumer behavior and upgrade substations for IEC 61850. These efforts have reduced power outages, doubled renewable energy adoption, and positioned Thailand as a rising energy hub in Southeast Asia. Learn More.

2. Australia: Pioneering Grid Solutions for Renewables
Australia has been at the forefront of renewable energy integration, combining solar, wind, and battery storage with conventional sources and strengthen grid stability through real-time monitoring and smart grid control. Learn More. 

3. Germany: Enabling EV Expansion Through Real-time Grid Transparency
Germany has deployed low-voltage grid monitoring projects to collect real-time data on transformer performance. This initiative has enabled grid transparency and prevention of overload while supporting large-scale adoption of EVs. Learn More.

The Path Forward: A Resilient Energy Future

Grid modernization is the foundation of the energy transition. By embracing digitalization, energy storage, and consumer empowerment, the global power grid can overcome today’s challenges and accelerate toward a sustainable future.
Moxa is at the forefront of this transformation, delivering advanced communication solutions that enable grid reliability, flexibility, and efficiency. From IEC 61850 integration to large-scale storage systems, our communication expertise empowers energy players to achieve a resilient, net-zero future.

Learn How Moxa Drives Digital Transformation in Energy Systems.
 

_{1 Electricity Grids and Secure Energy Transitions (IEA, Oct, 2023)
2 Renewables 2024: Analysis and forecasts to 2030 (IEA, Oct, 2024)}