China is building a supergrid

In 2021, a severe snowstorm hit Texas. When it did, the state’s isolated grid could not access excess power from neighboring regions, leaving 4.5 million homes and businesses without power.

To understand why, one must know that the US electric grid includes three main interconnections: the Eastern Interconnection, the Western Interconnection, and the independent Texas Interconnection. The local networks within these zones are connected, but the connections between the three main zones are minimal. Reducing the efficient use of energy and leaving networks vulnerable to outages.

However, the increasing number of extreme weather events is only one of the many reasons that highlight the need for a Supergrid.

A supergrid connecting continents

Using new grid technologies for long-distance bulk power transmission, a Supergrid can connect the most optimal sources of large-scale renewable energy to major demand centers and enable more efficient energy trading. By overcoming the limitations of existing infrastructure and potentially connecting continents, the idea is based on two main facts.

First, the ongoing shift toward decentralized, renewable energy sources has shifted production from centers of demand to regions where geography and weather permit efficient production. Second, renewables often work symbiotically. Periods of strong wind generation, for example, tend to be less productive for photovoltaics and vice versa. The assumption is that affordable renewable energy will always be available somewhere, making the transportation of electricity the main challenge.

China is rapidly building the world’s largest supergrid

Driven by its goal of carbon neutrality by 2060, China is moving rapidly to build the world’s largest Supergrid. Using ultra-high voltage lines operating at 1.1 million volts, this technology transmits electricity produced by renewable sources, such as wind farms in central Mongolia or hydropower plants in the southwest, to densely populated areas. Interesting note: these UHV lines are mostly using the new “Made in Europe” direct current technology. In 2024, over 30 UHV projects have been added, connecting entire regions such as Wuhan and Nanchang.

But China’s vision does not stop at its borders, as it plans to expand the network to other countries in Northeast Asia, including Japan, Korea or Russia. By prioritizing massive economic, ecological and geostrategic advantages, China has minimized issues such as environmental impact, land acquisition and struggle with the integration of renewable resources.

What about in the US and Europe?

Such challenges would hinder the development of a Supergrid in Europe and the US – two regions that are currently relying on a network of individual and partially connected networks.

This has been sufficient to ensure a wide supply of electricity. Until now. But a major weakness lies in interconnections. They lack the scale, capacity and range needed for unlimited bulk energy transfers. In the age of intermittent renewables, this doesn’t just threaten our energy security. It also exposes us to great price volatility.

One of the many examples occurred on September 12, 2024, at 19:00 CET. The price of electricity in Norway was €5/MWh, while in Germany it was €300/MWh. This example further illustrates the need for a Supergrid, which would help smooth out such price disparities by making different resources available on the grid.

Fortunately, despite the environmental challenges, both regions offer a compelling case for this solution. This is due to their integrated single market with free movement of goods, services, capital and labour, as well as their strong regulatory cohesion and ambitious net zero targets. In addition, Europe has established a strong policy framework for international energy cooperation.

Concrete initiatives are being developed but…

Initiatives are underway on both sides of the Atlantic, but compared to China, they are infants.

Launched in November 2017, the North American Supergrid initiative aims to build a grid, mostly underground, using high-voltage direct current (HVDC) across the US, Canada and Mexico. Studies such as the North American Supergrid, the Harvard China Project suggest that the grid can reduce energy sector emissions by up to 80% while increasing the efficiency and sustainability of the energy market. However, the project has faced challenges, including permitting, high costs and opposition from local communities.

Recently, the US Department of Energy called for additional interregional and interconnector capacity to make US grids fit for 21^str century.

And in Europe, network operators are required to reach 70% cross-zonal capacity by 2025, with varying degrees of success. A flagship project is NordLink, which connects Norway with northern Germany. Other projects to build HVDC power lines are still in planning or in the early stages of construction, such as SuedLink.

The costs will be massive, the benefits even more so

One of the biggest obstacles to building a Supergrid will be cost. New Rstad Energy research predicts that limiting global warming to 1.8°C above pre-industrial levels will require approximately $3.1 trillion in grid infrastructure investment globally by 2030.

One possible solution is innovative technologies, such as superconducting cable systems. Capable of transmitting ten times more power, it requires much less space and raw materials than traditional copper or aluminum cables.

Although the issue of funding for network development will continue, the benefits will far outweigh the cost. For example, greater electricity market integration and cross-border trade over the last decade have already brought EU-wide benefits estimated at around €34 billion per year.

Ditto in the US, where the DOE estimates that accelerated transmission expansion would lead to cost savings of $270–490 billion by 2050. For every investment dollar spent on improved transmission, roughly 1, 60 – $1.80.

The lame duck of the energy transition?

Grids are often seen as the “lame duck” of the energy transition. Wrong!

With sound environmental considerations, an overhaul of our grid infrastructure is imperative to decarbonizing and strengthening our industrial base. It will preserve our economic prosperity and counter the continuing socio-economic divide in many of our Western societies.

It is high time for a shift in policy and perception, bringing energy demand, supply and transmission at eye level.