Inadequate electricity grid connections are a bottleneck in the green transition

By Bj?rn Rici Andersen

Inadequate grid connections is one of the most underestimated challenges for the green transition, requiring action now.

Electrification is a key element in the green transition for many manufacturing companies worldwide – and ROCKWOOL's multifaceted decarbonisation strategy is no exception. Unfortunately, bottlenecks are arising that risk delaying the ambitious green transition of production companies: Queues to connect to the electricity grid.

Electrification requires a sufficient supply of low-emission high-voltage electricity, and all too often, it takes too many years for companies to connect to the grid. The International Energy Agency (IEA) recently released a report showing that globally, projects based on renewable energy are queued up for a total of 3,000 gigawatts.

In a global company like ROCKWOOL, which has a clear strategy to electrify existing and new factories, we keenly feel the consequences. In one country, we found a location for establishing an electrified factory, but inadequate supplies of green high-voltage electricity and uncertain prospects for getting it contributed to disqualifying the site. In another country, an excessively long time horizon and high costs led us to prioritise our decarbonisation differently.

Examples like these risk obstructing our otherwise ambitious decarbonisation programme.

While investments in renewable energy, according to the IEA, have nearly doubled since 2010, global investments in the grid have remained largely stagnant, at around 300 BUSD annually.

Globally, the IEA estimates that nearly 60 billion extra tonnes of CO2 emissions will be emitted between 2030 and 2050 if investments in the grid and necessary legislative reforms are not scaled up rapidly. This will also make it even harder to meet the goals of the Paris Agreement.

In our view, governments in Europe and North America should ensure sufficient funding for the construction of green energy infrastructure – both in terms of generating electricity and transmitting it to end-users – including manufacturing companies. Furthermore, it is crucial to simplify the permitting processes for expanding green infrastructure.

With such high unmet demand for green electricity, it is also crucial to minimise overall energy demand as much as possible. This is one reason why we need to accelerate improving energy efficiency in existing buildings. By implementing deep renovations in the existing building stock, we significantly reduce the overall energy demand, allowing green energy sources to supply an increasing portion of the total demand. In fact, the IPCC estimates that renovating existing buildings in Europe could save energy equivalent to that produced by wind turbines covering an area the size of Germany.

ROCKWOOL's insulation products through the lifetime of their use already save the atmosphere 100 times more CO2 emissions than are emitted during their production.

Regardless of the challenges, we continue to reduce our own climate footprint by electrifying more and more of our factories, so that through our products we can help others reduce their climate impact. But for our decarbonisation strategy (and that of other manufacturing companies) to succeed, it requires a sufficient supply of green high-voltage electricity. Indeed, that’s why we believe that inadequate grid connections is one of the most underestimated challenges for the green transition, requiring action now.

Translation of a Danish article first published in B?rsen in January 2023.