Funding Grid and Storage Enhancement: The Call for Stronger Public-Private Collaboration

Under the International Renewable Energy Agency (IRENA)’s 1.5° C Scenario, the share of variable renewable energy (VRE) like solar and wind in total generation accelerates by 2030. The race to achieve 11.2 terawatts (TW) by 2030 in line with the tripling renewable power capacity goal of the UAE Consensus thus requires the readiness of grid infrastructure to integrate high share of renewable power.

A renewables-based power system calls for grid expansion and modernisation. Grid infrastructure must enable the connection and effective use of new renewables capacity. The grid infrastructure must also be flexible to ensure reliable and efficient system operation at any time.

At the global level, the power sector will require between 2.5 to 3 times more flexibility than in 2019 to efficiently manage the supply and demand of VRE generation. As such, grids and flexibility are essential pillars of the energy transition. This is why IRENA identified grids as one key enabler to meeting the tripling target, putting grid infrastructure expansion and modernisation as crucial to the goal.

IRENA’s analysis highlights the funding needs to ensure electricity grids can adjust to the new power generation mix. Although investments in renewable power, grids and battery storage exceeded fossil fuel investments in 2024, reaching USD 1.19 trillion, they are falling behind the expansion of renewables capacity.

Average annual investments in renewable power and grids in 2025–2030 must double from current levels. IRENA’s 1.5°C Scenario estimates annual grid investment needs to reach USD 671 billion until 2030.

Mobilising that amount is only possible with the collaboration of both public and private sectors. To that end, IRENA has pioneered and facilitated the following collaborations among others:

• IRENA Coalition for Action: consists of over 180 members, including private sector companies, industry associations, civil society, research institutes and intergovernmental organisations, to support the widespread adoption and sustainable use of all forms of renewable energy.

• the Utilities for Net Zero Alliance (UNEZA): consists of over 70 leading players in utilities and power sector aiming to spearhead the development of grids that are ready for renewable energy, promote clean energy solutions, and advance electrification efforts.

• the Alliance for Industry Decarbonization (AFID): consists of over 100 private and public organisations and stakeholders operating in energy-intensive sectors, facilitating the dialogue at industry level and increasing cooperation to help companies develop solid decarbonisation strategies and implementation plans.

In relation to the need for grid expansion and modernisation, IRENA through UNEZA supports building ecosystems where the power and utilities sector, including regulators, utilities, planners and ministries, work together to shape partnerships, enable dialogue with public and private stakeholders and deliver the speed, certainty and bankability investors need. In response to the investment needs, UNEZA reinforced their commitment last year to invest more than USD 148 billion per year in grids and renewables. It includes investing USD 66 billion per year in renewables, and USD 82 billion in grids and storage. This commitment is in line with the ambitions of the COP29 Global Energy Storage and Grids Pledge to add or refurbish 80 million kilometres of grids by 2040 and to deploy 1 500 gigawatts of energy storage by 2030.

Similarly, the IRENA Coalition for Action and its members recognise energy storage as critical to grid flexibility, reliability, and affordability as VRE expand. In a dedicated report, the Coalition’s Members outlined a set of recommendations which include promoting storage as a key enabler for the global tripling target; enhancing grid flexibility and stability via energy storage; developing solar photovoltaics and storage through favourable financing and insurance policies; as well as supporting the development of standards and certifications for storage technologies.

Recognising the importance to examine the enabling conditions for scaling grids and storage responsibly, balancing system reliability with innovation and investment, two high-level sessions on grids and storage will take place at IRENA’s 16th Assembly. The Public-Private Dialogue led by the Coalition for Action (10 January, 16:30 to 18:00) will focus on accelerating the deployment of grids and energy storage to support the rapid scale-up of renewable energy. The High-Level Dialogue by UNEZA and AFID (11 January, 13:00 to 14:30) will seek to address electrification challenges across policy frameworks, financing, and system flexibility.

During these sessions, government representatives and industry executives will exchange experiences on national initiatives, identify regulatory reforms and financing approaches that remove barriers, and outline coordinated follow-up actions within the UAE Consensus and Global Energy Storage and Grids Pledge.

Follow the 16th Assembly’s live blog here on the days: Sixteenth Session of the IRENA Assembly