Building power systems fit for a fossil-free future

COP28 reaffirmed the central role of electricity in decarbonization, yet progress on grid expansion, system integration, and flexible backup still lags behind ambition. From nuclear reinvestment to hydrogen-ready infrastructure, the pressure is growing to align infrastructure, policy, and planning.

The outcomes of COP28 reaffirmed the power sector as the cornerstone of global decarbonization, essential for electrifying transport, buildings, and industry. But the energy transition and electrification are not only about decarbonization, they are also about ensuring a resilient energy system that is robust and reduces reliance on individual countries or single sources of supply. Governments agreed on the need to triple renewable capacity by 2030, supported by power grid modernization, strategic nuclear deployment, and transitional use of gas. Yet, decarbonizing power is not only about adding clean capacity. It also requires robust system integration, flexible resources, and digital infrastructure. Without a clean, reliable electricity system, the wider energy transition will falter. Realising this shift demands faster permitting, targeted investments, and policies that reward flexibility, dispatchability, and grid-supportive capabilities.

What has changed in the past year

In 2024, renewables grew strongly, with 585 GW of newly added capacity globally, and over 90% of all additions taking place in China, Europe, and the US. Yet deployment slowed in many markets due to grid congestion and permitting delays, leaving gigawatts of projects stalled in connection queues. Nuclear has regained strategic relevance, not only as a low-carbon energy source, but also as a provider of stable and dispatchable electricity to meet rising demand from energy-intensive industrial transformation as well as from digitalization and AI.

Six more countries joined the pledge to triple global nuclear capacity by 2050, and major tech firms invested in plant restarts and Small Modular Reactor (SMR) development. India is opening its nuclear sector to private capital, and nuclear fusion is back on some policy agendas. Moreover, several governments are revoking or reconsidering their nuclear phase-out strategies, for example, Belgium has repealed its law mandating a nuclear exit and lifting the ban on new builds, while Japan has restarted reactors and is planning new projects after a decade of caution. Furthermore, progress is being made in development nuclear waste repositories, such as in Onkalo, Finland, which would represent the world’s first commercial spent fuel waste facility.

Still, challenges persist: long lead times, high costs, regulatory hurdles, and fuel supply constraints, especially for enriched Uranium (HALEU1).

Gas remains deeply embedded as a flexible backup, helping balance volatile renewable output amid geopolitical risks and delayed grid expansion. While Europe added nearly 29 bcm/year of new LNG (Liquefied Natural Gas) capacity, new project proposals slowed as focus shifted to hydrogen. Germany approved a 9,000 km hydrogen-ready gas network, and co-firing conversions have begun across multiple power plants.

Power grids have become the critical constraint and enabler of the transition. The EU estimates €2 trillion is needed in upgrades by 2050. Countries like Germany and the UK are advancing integrated offshore and cross-border designs, but implementation lags due to grid constraints, lengthy permitting processes, supply chain bottlenecks, skilled labour shortages, and slow regulatory coordination. Digitalization, storage, and demand response are beginning to relieve pressure. In parallel, district heating mandates and hybrid heating approaches are expanding to manage electrification constraints.

Outlook and key action points

To stay on track for net zero, renewables must scale much faster, not only in installed capacity but in terms of system integration, permitting acceleration, and flexibility. Rapid grid expansion and digitalization, alongside market reforms that reward dispatchability, locational value, and system services, are essential to unlock their full potential. Gas will continue to play a transitional role in maintaining system stability as coal is phased out and renewables ramp up. To ensure security of supply while staying aligned with climate goals, governments must clearly define gas’s declining trajectory and support its role through well-designed capacity mechanisms. These should prioritize flexibility and compatibility with future clean fuels such as hydrogen.

Nuclear’s long-term contribution must be clarified in national strategies, supported by harmonized licensing, risk-sharing financing models, and secure supply chains for fuel. Building a resilient, decarbonized power system will also require accelerated investment in hydrogen-ready infrastructure, long-duration storage, and cross-sector coupling to enhance system-wide flexibility.

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