Building a more resilient grid
Power grids worldwide face unprecedented challenges as aging infrastructure meets surging demands. Electricity networks have evolved but not enough to manage the current pressures they face. The International Energy Agency (IEA) estimates that up to 80 million kilometers of grid infrastructure need building or refurbishing by 2040 to enable decarbonization¹.
Web Story
7min
2026-01-20
The challenge is clear: how do we transform 20th-century grid infrastructure to meet 21st-century demands while enabling the clean energy transition? While technology to reshape the grid exists, we must act urgently and holistically, otherwise we risk holding back our energy future.
The grid's historical foundation
The modern electrical grid emerged in the early 20th century, built around a simple principle: large, centralized power stations generating electricity and transmitting it through networks of powerlines and substations to end consumers. This one-way flow model served reliably for decades, with predictable demand patterns and stable, fossil fuel-based generation.
For most of the 20th century, this centralized approach proved highly effective. Massive coal, gas, and nuclear power plants provided the backbone of electricity supply, with transmission networks designed to handle steady, unidirectional power flows. Grid operators could forecast demand with reasonable accuracy, and the system's inherent inertia from large rotating generators provided natural stability.
Current scenario
<p>However, today's grid faces different and complex challenges. The electrification mega-trend is driving unprecedented demand across multiple sectors simultaneously:</p>
Data Centers and AI
<p>The digital revolution has created massive energy consumers. Data centers alone are forecast to increase energy consumption by 300 percent, driven by cloud computing, artificial intelligence, and digital transformation across industries.</p>Electric Vehicle Revolution
<p>E-mobility represents perhaps the most dramatic shift, with energy consumption for electric vehicles and charging infrastructure projected to increase by 9,000 percent as transportation electrifies<sup>2</sup>.</p>Industrial Electrification
<p>Manufacturing processes are shifting from fossil fuels to electricity, with heat pumps replacing gas heating and electric furnaces replacing coal-fired industrial equipment.</p>Climate Response
<p>Air conditioning demand surges as global temperatures rise, while heat pump adoption accelerates as buildings decarbonize.</p>These trends are converging to create soaring electricity demand. In the US alone, electricity consumption is forecast to increase to 50 percent by 2050, according to research commissioned by America's National Electrical Manufacturers Association (NEMA). Globally, electricity demand is forecast to increase at an average annual rate of 3.6% over the 2026-2030 forecast period, supported by rising consumption from industry, electric vehicles, air conditioning and data centers.3 Demand over the next five years is set to be 50% higher on average compared with past decade, placing unprecedented strain on infrastructure designed for a different era.
Evidence of strain
The grid's legacy architecture is showing clear signs of stress:
- Capacity Limitations: Existing transmission capacity increasingly cannot handle peak demand periods, leading to bottlenecks and reliability concerns.
- Recent Grid Failures: Signs of strain emerged dramatically in April 2025, when large parts of Spain and Portugal lost electricity for over ten hours. The Spanish government report cited inadequate reactive power reserves and lack of fast-acting fault isolation. Earlier, London's Heathrow airport closed after an electrical substation fire, prompting regulatory investigation.
The evolving energy landscape: A shift toward smarter, more flexible grids
The solution isn't just about expanding traditional grid infrastructure,—it's about reimagining how electricity networks operate.
Smart grids use digital technology and real-time data to optimize power flows, predict demand, and integrate renewable sources more efficiently.
Meanwhile, microgrids are gaining traction as localized energy networks that can operate independently or connect to the main grid when needed. These smaller systems are particularly valuable for remote communities, industrial facilities, and critical infrastructure that need reliable power without waiting years for traditional grid connections.
As battery storage costs continue falling and control systems become more sophisticated, both smart grids and microgrids are transitioning from niche solutions to mainstream infrastructure. This growth represents a fundamental shift from the centralized, one-directional power systems of the past to a more distributed, resilient, and adaptable energy future.
Challenges with renewable energy integration and building grid resilience
Ageing infrastructure
<p>70 percent of the US grid’s transmission lines and power transformers are more than 25 years old, with some components dating back to the 1940s<sup>4</sup>, More than 40 percent of Europe’s grid infrastructure is also ageing<sup>5</sup> and requires either replacement or sophisticated monitoring to prevent failure.</p>Network instability
<p>Existing grids were designed for predictable, one-way power flow, not the bidirectional, intermittent nature of renewable energy. Solar and wind lack the physical inertia of traditional turbines to maintain a stable system frequency.</p>Extreme weather
<p>The increasing frequency of severe weather events<sup>7</sup> is presenting new challenges to grid resilience. In coastal and flood-prone areas, there is a major focus on hardening the grid. Equally pressing is mitigating wildfire risk in dry regions, where sparks from overhead equipment can ignite devastating fires.</p>Heavy investments
<p>Undertaking grid modernization is costly and complex. One recent report<sup>4</sup> estimated that an annual investment of €67billion is needed until 2050 to deliver a European distribution grid that will enable the energy transition, based on renewables.</p>Skills gap
<p>In the past two years, employment growth in the US utilities sector was faster than in traditional industrial sectors<sup>5</sup>. But the sector boom has exposed a skills shortage and the need for low- or no-maintenance equipment, to lower costs and ease workforce burden.</p>Policy & regulatory hurdles
<p>Grid modernization faces challenges from grid codes, permitting processes, and market design frameworks.</p>Cyber security
<p>Digitalization and remote operations have made cyber attacks on critical grid infrastructure a paramount concern for utilities.</p>Financing models for modernization
<p>Unclear cost allocation and return-on-investment pressures complicate funding for grid modernization.</p>ABB solutions contributing to grid modernization
ABB is at the forefront of a major shift towards a more flexible, interactive, and automated grid with solutions to build digitalized ‘smart’ networks, resilience, reliability and flexibility.
Digital and software solutions
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OPTIMAX® for Virtual Power Plants
OPTIMAX® for Virtual Power Plants seamlessly aggregates and integrates decentralized generation, flexible loads, and storage systems (so called distributed energy resources, or DERs) into a virtual power plants.
Digital twins and Digital twin enablement
Digital twins for grid applications and Digital twin enablement allow for the provision of advanced sensors and smart components that feed data into digital twin models, allows for accurate simulation and prediction of grid behavior.
Smart Substation Control and Protection
ABB has launched the first virtualized protection and control solution with Smart Substation Control and Protection SSC600 SW.
Digital substations
Modern architecture based around the SSC600 centralized computer, with fiber optics replacing traditional copper wiring, can increase safety, reduce lifetime costs, and enable faster, standardized deployment.
Cybersecurity – new technology brings new challenges
Cyber-security solutions
As the grid becomes increasingly digitalized and remotely operated, cybersecurity has emerged as a paramount concern for utilities fearing attacks on critical national infrastructure. Our cyber-security solutions are designed to address those concerns.
Engineering a stable and reliable grid
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Synchronous condensers
The global energy landscape is experiencing a major transformation as renewable energy sources are increasingly integrated into power grids. While this change presents significant opportunities for cleaner and more sustainable energy systems, it also poses challenges to grid stability, reliability, and efficiency. With the right technologies, such as ABB’s synchronous condensers, we can improve grid stability and maintain essential inertia, ensuring a reliable flow of renewable power.
Battery Energy Storage Systems (BESS)
BESS is the general term for a system that stores energy in batteries that can be utilized later. Typically, renewable energy sources are combined with a BESS to store energy during peak production time so it can be used when needed. ABB’s BESS as-a-Service offering eliminates the technical and financial risks associated with ownership.
In addition, ABB recent acquisition included bidirectional inverter stations, key to move power in both directions - from the renewable source to the battery and from the battery to the grid.
Submersible switchgear
Elastimold™ medium voltage vault switchgear is ideal for utility companies trying to lower operation and maintenance costs while improving service reliability and preparing their electrical distribution systems to meet the changing needs of the future.
Hi-Tech Valiant™ fire mitigation fuses
Each year, wildfires cause catastrophic damage. Because the smallest spark can pose big risks, ABB’s Hi-Tech fuse design and damage sensor contain sparks within the device to help reduce risk of wildfire ignitions and support utility infrastructure, resiliency and fire mitigation planning.
Power system stabilizers
Grid codes are constantly changing due to the new and unprecedented network developments.
Therefore, installed plant equipment requires to be upgraded/replaced to comply with the network regulations which leads to increased extended outages and costs.
PSS SA is a cost-effective solution to be compliant immediately.
Flexibility
ABB Ability™ System 800xA®
ABB Ability™ System 800xA® is frequently controlling and monitoring synchronous condensers, which are rotating electrical machines that provide inertia, reactive power and short-circuit strength – all essential for stabilizing grids with high shares of renewables.
Simulations and studies - predicting the grid behavior
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Grid compliance simulations and studies
ABB supports power operators in meeting their objective of scaling up while protecting and strengthening power distribution networks. Compliance to codes established for power grids goes well beyond just a tick in the box – it enables reliability, safety and efficiency in your operations.
ABB’s solutions and services are designed to drive control and stability of power systems across a wide range of power sources, whether conventional or renewable, by complying with standards established globally and for each region.
Can your grid handle the future?
The path forward
The transformation from 20th-century centralized grids to 21st-century smart networks represents one of the most significant infrastructure challenges of our time. Success requires coordinated investment in digital intelligence, storage systems, grid hardening, and cybersecurity. Collaboration with utility companies, governments and partners across the continent is key to solving unique energy challenges.
Our solutions allow for strengthening resilience, utilities to scale capacity and build the data-driven reliability that tomorrow’s grid will require.
Sources:
1. IEA: Electricity grids and secure energy transitions
2. A Reliable Grid for an Electric Future
5. Deloitte: 2025 Power and Utilities Industry Outlook