Expanding and modernising transmission grids is essential for a secure, affordable and sustainable energy system. Analysis from the International Energy Agency has repeatedly highlighted the crucial role of electricity grids, notably in the comprehensive 2023 report Electricity Grids and Secure Energy Transitions. The importance of this issue is underscored further by the accelerating pace of demand growth for power as the world enters an Age of Electricity. The latest IEA near-term forecast is for global electricity consumption to grow at close to 4% annually through 2027. Demand is rising both in emerging market and developing economies and in many advanced economies, driven by industry and by the growing use of air conditioning, appliances, electric vehicles, heat pumps, artificial intelligence and other technologies. Transmission grids are essential to link new sources of generation with expanding demand centres. Strengthening and upgrading transmission infrastructure is also essential to enable the cost-effective deployment of wind and solar power and to enhance cross-border interconnections.

Around 1.5 million kilometres of new transmission lines have been built worldwide over the last decade, but inadequate transmission remains a major constraint on power system development, electrification and energy security. Among other issues, grid infrastructure has struggled to keep pace with the rate at which new renewable sources are entering the system. This mismatch has led to delays in project deployment and increased financial uncertainty: in 2024, the IEA tracked 1 650 GW of solar and wind projects in advanced stages of development that are awaiting grid connections, a major missed opportunity to bring clean, cost-effective sources of generation into the mix. At the household level, connections to the grid have picked up in recent years, but 750 million people remain without access to electricity around the world – 80% of which are in sub-Saharan Africa.

Recognising the urgency, investment in transmission has started to pick up as many countries make grid infrastructure a key priority in their national energy plans. Europe, the United States, China, India, and parts of Latin America are leading the way, and global investment in power transmission grew by 10% in 2023 to reach USD 140 billion. There is a strong regional imbalance in investment patterns, with advanced economies and China accounting for about 80% of the global total. Under today’s policy settings, this spending would need to exceed USD 200 billion per year by the mid-2030s to meet rising needs for electricity, and to reach USD 250-300 billion in scenarios that achieve national and global emissions goals in full. The required increases in investment are particularly steep in many emerging market and developing economies outside China.

Permitting remains the primary cause of delays in transmission projects, particularly in advanced economies, but supply of cables, transformers, materials and other components is also becoming a limiting factor. Growth in global demand for transmission capacity, driven by simultaneous expansion plans in many regions, is putting increasing pressure on supply chains. Demand is intensified by a wave of investment in high-voltage and ultra-high-voltage transmission projects to facilitate long-distance power transfer, and by the rise in offshore wind power that boosts the need for high-voltage subsea cables. 

An IEA survey of leading industry players conducted for this report finds that it now takes two to three years to procure cables and up to four years to secure large power transformers. Average lead times for cables and large power transformers have almost doubled since 2021. Some specialised components are even more difficult to source: waiting times for direct current cables – often preferred for long-distance transmission lines – extend beyond five years. High demand has also substantially driven up prices. Prices for individual orders are highly dependent on their complexity and capacity, which vary from project to project, but the results of our survey suggest that prices for cables have nearly doubled since 2019, and the price of power transformers rose by around 75%. Underlying materials like copper, aluminium and grain oriented electrical steel have also experienced price increases. The combination of rising component costs, extended procurement lead times, and a significant backlog of orders is contributing to higher project expenses as well as delays.

Manufacturers are responding with plans and investments to increase production capacity, but this will take time, and uncertainties remain over the extent of future demand and the availability of a skilled workforce. The visibility and credibility of national and regional transmission plans, and their translation into component demand, is vital to underpin investment decisions to expand manufacturing capacities. A shortfall in specialised labour is a concern both for manufacturing and for broader expansion of the grid. Around 8 million people are employed worldwide in constructing, maintaining and operating grids, and the IEA estimates that this workforce will need to rise by 1.5 million by 2030 under today’s policy settings, and even more rapidly in scenarios that meet emissions goals in full. 

Today’s tight markets for transmission components highlight the importance of integrated strategies for the entire supply chain as countries seek to ensure timely grid modernisation and expansion. This report makes eight actionable recommendations that can help governments, regulators, buyers, manufacturers and other stakeholders navigate supply chain challenges:

1. Enhance visibility on future demand: Integrated, credible visions for electricity sector development at country and regional level, including transparent project pipelines and long-term transmission investment plans, provide essential guidance for manufacturers on the required quantity and types of transmission components. Clear timelines and structured master plans, incorporating technical and regulatory requirements, enhance confidence across the supply chain.
2. Strengthen the industry dialogue: System planning is becoming more complex as renewable and distributed generation grows. This underscores the importance of improved coordination among governments, transmission system operators, regulators, developers and manufacturers to underpin well-grounded assessments of demand for transmission projects and components, and their timely delivery.
3. Encourage proactive grid investment: In a world where electricity demand is rising fast and some new sources of generation can be built within a few years, the pace of grid investment needs to step up to prevent bottlenecks, including a regulatory framework that supports anticipatory expansion and modernisation. With rising costs and longer lead times, proactive strategies are needed to align transmission development with power system needs.
4. Design effective procurement frameworks: Long-term agreements provide certainty on prices and supply volumes, encouraging manufacturers to expand capacity and enabling buyers to secure essential components. Standardising procurement procedures across markets enhances transparency and simplifies bidding processes. Aligning procurement policies to national infrastructure and energy plans ensures consistency, scalability and investment confidence.
5. Streamline permitting: Transmission expansion projects are complex and prone to delays, with permitting remaining a key uncertainty. Maintenance of essential safeguards needs to be combined with removal of unnecessary administrative barriers and prioritisation of key infrastructure projects. Greater predictability for permitting timelines and processes provides benefits all along the supply chain by helping to ensure projects stay on schedule.
6. Maximise existing grid infrastructure: Optimising the use of existing grid infrastructure through digital technologies enhances efficiency and maximises the use of existing assets, providing a safety valve for networks and supply chains. Solutions such as real-time monitoring and operational performance improvements allow transmission lines to function more effectively, alleviating the pressure on some new infrastructure investments. Additionally, performance-based regulation drives the development and adoption of digital technologies, fostering innovation and operational efficiency.
7. Promote diverse, resilient and sustainable supply chains: The supply of certain grid components is concentrated among few top-tier suppliers, hindering diversification, particularly in emerging and developing economies. Governments can support this by pooling procurement needs and collaborating with local or second-tier suppliers.
8. Ensure a skilled workforce: The demand for skilled workers is increasing across the supply chain. Building a strong talent pipeline and integrating digital skills into training are essential. Skilled labour is key to develop infrastructure projects and expanding manufacturing. Governments and industry stakeholders need to work together to align skills development with all stages of transmission projects, from design to construction and maintenance.