A new report on ‘Building the Future Transmission Grid’ was released by the International Energy Agency (IEA) in February 2025. The document was developed under the Regulatory Energy Transition Accelerator (RETA) initiative, which aims to enhance the capacity of regulators to increase the speed of clean energy transitions.
As per this report, around 1.5 million km 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. However, while investment in transmission has started to pick up as countries make grid infrastructure a key priority in their national energy plans – in particular Europe, US, China, India, and parts of Latin America – challenges have emerged beyond permitting, which is the most widely cited issue for delays in projects.
The supply of cables, transformers, materials and other components is also becoming a limiting factor, the IEA reports, commenting that a survey has found that it now takes two to three years to procure cables and up to four years to secure large power transformers – an almost doubling of the average lead times since 2021. Some specialized components are even more difficult to source, such as high voltage direct current (HVDC) cables with a waiting time extending beyond five years.
The high demand also has substantially driven up prices. While dependent on the complexity and capacity of individual orders, the survey suggests that prices for cables have nearly doubled since 2019 and the price of power transformers has risen by around 75 per cent. This 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, the report adds.
The study finds that manufacturers are responding with plans and investments to increase production capacity, but these expansions will take time to implement. In addition, uncertainty remains regarding future demand levels and the availability of skilled workers. Currently around 8 million people worldwide are employed in constructing, maintaining and operating grids, and this workforce will need to grow by at least 1.5 million by 2030 to meet projected demand, the report adds.
The report concludes that coordinated efforts across the entire supply chain will be essential to overcome these bottlenecks and enable reliable power system development for the future. Eight recommendations are offered for navigating the supply chain challenges:
- Enhance visibility on future demand
- Strengthen industry dialogue
- Encourage proactive grid investment
- Design effective procurement frameworks
- Streamline permitting
- Maximize existing grid infrastructure
- Promote diverse, resilient and sustainable supply chains
- Ensure a skilled workforce
The report also explores the evolving investment in electricity transmission networks and key trends related to the supply chain of key components. Based on a survey of industry stakeholders in 2024 by the IEA, it provides insights into how increasing infrastructure needs are affecting prices of components, lead times, and related market dynamics.
Building on the analysis ‘Electricity Grids and Secure Energy Transitions’, this report identifies actionable strategies to address challenges related to the supply chain for grid infrastructure, with a focus on transmission lines with voltages that exceed 66 kV. The findings serve as a guide for policymakers, regulators, and industry leaders to navigate the complex landscape of transmission expansion and modernization in the clean energy transition.
While much of the new decentralized generation is being connected to the distribution grids, the transmission grids also are essential to link new sources of generation with expanding demand centers and to enhance cross-border interconnections.