Supply chain issues are a thing of the past for most renewable energy equipment (leaving aside trade restrictions re: China). One major exception to this rule is the transmission network – at least according to the International Energy Agency (IEA)’s latest report on the topic, Building the Future Transmission Grid.
If transmission is bottlenecked, eventually everything is bottlenecked other than microgrids and self-consumption. The IEA report primarily considers lines of over 66 kV, so the transmission network, although the distribution network has also proven to be a limiting factor for distributed solar deployments in markets as disparate as coastal China and the Netherlands.
For now, the IEA states, permitting remains the primary cause of delays to transmission projects, especially in advanced economies – but the report warns that the supply of cables, transformers, and other components including raw materials threatens to become a limiting factor in future.
Based on an industry survey, the IEA finds that the average lead times for cables and large power transformers have almost doubled since 2021. Direct current cable waiting times have extended to five years, with cable prices also driven up by a disparity between demand and supply – nearly doubling since 2019, and this point in 2025, we are well beyond the simple post-pandemic price spike which affected so many raw materials and products during 2022-2023.
The report observes that 1.5 million kilometers of new transmission was built globally in the past decade, that global power transmission investment grew 10% to $140 billion in 2023, with China plus advanced economies accounting for 80% of that figure. The IEA states that investment will need to reach $200 billion annually by the mid-2030s, with the associated workforce growing from 8 million to 10.5 million, just to keep up with demand – and as much as $250 billion or $300 billion for an on-schedule energy transition.
For China this would mean a considerable increase to an already large figure – for most other markets, whether developing or advanced, a step change is needed in the scale of transmission investment. Global net-zero would need over 15 million kilometers by 2050.
Per the IEA, while manufacturing expansion efforts are admittedly underway, there needs to be more visibility on the precise scale of future demand – specifically the IEA says there need to be “Integrated, credible visions for electricity sector development at country and regional level, including transparent project pipelines and long-term transmission investment plans”.
In other words, at present such plans don’t exist in most markets, whether developed or advanced. And so the scales of investment in manufacturing, project development, permitting reform, and workforce expansion are insufficient as a result.
The exception to that rule is China, where State Grid will invest $89 billion this year across both transmission and distribution (plus $24 billion from China Southern Power Grid), but this doesn’t help the rest of the world other than setting an example to follow, and potentially providing a source of imported equipment.
In Rethink’s view, this transmission bottleneck is not going to be fully addressed in most markets, especially not in the US, which will permanently skew future development in favor of distributed assets including storage, self-consumption, microgrids, vehicle-to-grid (V2G), and even nuclear power (whether in the form of brand new projects, or merely more lifespan extension and renovation). Utility-scale wind and solar on the other hand will be limited by inadequate grid expansion.
As the latest example of this coming from the US, the Eastern Interconnection Planning Collaborative (EIPC) has this month urged the Federal Energy Regulatory Commission (FERC) to set metrics which would help determine whether more transmission is needed between regions. The EIPC found that the North American Electric Reliability Corporation (NERC) study on interregional transfer capability which Congress ordered in 2023 was “helpful but inadequate.
And as we always like to point out, the natural central state for interregional transfers on a national level in the US would be Texas, especially in a wind-solar future as it sits in the middle of an east-west sun belt and at the base of a “wind power column” stretching north. Instead, Texas is almost an island unto itself.