Modernising Grids in the Age of Electricity

The world has entered the Age of Electricity, with electricity becoming the central energy carrier for modern economies and the primary driver of energy transitions. Grids are the backbone of electricity systems. With electricity demand rising and both demand and supply becoming more variable, it is essential to expand networks. But new infrastructure is increasingly slow and costly to build, which means that making better use of existing assets has to be given equal priority.

Artificial intelligence (AI) is having a growing impact on the electricity sector. The relationship runs both ways: the data centres behind AI are a fast-growing source of demand that can worsen grid congestion, while AI applied to energy systems holds the promise of huge potential benefits for system reliability and efficiency. Both sides are explored in the IEA's Energy and AI analysis. This report builds on that work by focusing on electricity grids and examines how network operators can leverage digital technologies (including AI) to make better use of existing grids. In this context, AI’s value lies in strengthening optimisation, forecasting, situational awareness, resilience and risk management, helping networks use existing capacity more safely and efficiently.

The report presents a portfolio of digital tools (the digital grid toolkit) that allow greater value to be derived from the transmission and distribution network and can improve how it is planned, built, maintained and operated, identifying where improvements transfer most readily from one country to another, and where regulatory reform can have the greatest impact. Demand-side flexibility and storage are also important routes to higher network utilisation, but are treated as a complementary topic covered in other IEA work. While AI is the driver of the current momentum, the report is not confined to it. The surge in data, investment and attention can lift a wider family of proven but underdeployed solutions to achieve better use of grids, from proven grid-enhancing technologies to emerging AI-enhanced applications.