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Capex on electricity transmission: Key growth drivers and challenges [free access]

October 8, 2021


In the developing economies of Asia, Africa and the Middle East, a critical driver for investment in the transmission sector is the need to meet the growing demand for electricity and focus on improving electricity access and achieving 100 per cent electrification. In Latin America and Asia, governments are focusing on privatisation to fast-track grid investment. In geographically large countries such as China and India, high voltage direct current (HVDC) is emerging as the preferred technology for long-distance power networks. Meanwhile, developed countries are investing in improving their ageing power infrastructure with advanced technologies to meet the dynamic nature of supply and demand in the future.


Renewable energy integration has likewise become a vital driver of transmission investment during the past couple of years in the power transmission sector as well as energy storage devices, particularly in developed economies. There has been an increase in investment to extend and modernise the transmission matrix, and to revamp and replace ageing power infrastructure. With an increased focus on decarbonisation goals, major countries are focusing on building renewable energy-based electricity generation such as solar and wind as part of their generation mix.


In addition, transmission sectors in developing nations are focusing on the need to better utilise local assets and are receiving monetary assistance from developmental organisations for the same. Also, private sector participation and competitive bidding in transmission are occurring all around the world to make the area more appealing for investment.


Figure 1: Key growth drivers for investment in the transmission sector

Source: Global Transmission Research


Despite such initiatives and progress, challenges such as right-of-way (RoW) issues, cost escalations, permit issues and difficulty in assessing projects’ environmental/social costs continue to plague the sector. Accessibility to quality financial resources is hampering utilities' expansion plans, particularly in developed economies.


Figure 2: Key challenges for investment in the transmission sector



For more insights on past and future capital expenditure trends in the global electricity transmission market, visit our webpage: