Building a more resilient grid | ABB

CURRENT SCENARIO

<p>However, today's grid faces different and complex challenges. The electrification mega-trend is driving unprecedented demand across multiple sectors simultaneously and a consistent development across most markets is rising electricity grid investments (+11&nbsp;percent in 2025 from 2024 levels), which are needed to meet growing demand, integrate more variable renewable energy and ease network congestion.³</p>

Data Centers and AI

<p>The digital revolution has created massive energy consumers.&nbsp;Data center electricity demand soared 17&nbsp;percent in 2025 alone and is set to double globally by 2030, driven by cloud computing, artificial intelligence, and digital transformation.⁴</p>

Electric Vehicle Revolution

<p>Energy consumption for electric vehicles and charging infrastructure is projected to increase by 2,000 percent through 2050 as transportation electrifies.⁵</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>

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,⁶ More than 40 percent of Europe’s grid infrastructure is also ageing⁸ and requires either replacement or sophisticated monitoring to prevent failure.&nbsp;The challenge is no less urgent elsewhere. Southeast Asia's grids lose between 6 and 10&nbsp;percent of electricity in transit before it reaches consumers - a direct consequence of infrastructure that was never designed for today's renewable-dominated, digitally-intensive energy system.⁹</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 events¹⁰&nbsp;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 report¹⁰&nbsp;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.¹¹&nbsp;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>

INVESTING IN THE WORLD’S GRIDS, AND THE PEOPLE WHO RUN THEM

Building a resilient grid requires more than hardware- it demands capital, innovation and a skilled workforce ready for the future. We are investing on all three fronts.

ABB has committed more than $1 billion in targeted investments across markets where grid modernization is most urgent such as in the United States, Europe and India. This aligns with IEA findings showing that annual grid investment must increase by approximately 50 percent by 2030 from current $400 billion levels to accommodate renewable growth and electrification demands. Grid-enhancing technologies and regulatory reforms could unlock 1,200-1,600 GW of advanced-stage projects currently stuck in connection queues, representing an enormous opportunity for companies delivering grid modernization solutions.

To improve grid management amid equipment shortages and long lead times, we have also strengthened our grid automation capabilities through the acquisition of Netcontrol - adding technologies that help utility operators enhance system management without adding risk.

But infrastructure investment alone is not enough. The energy transition requires a new generation of skilled workers to build, operate, and maintain the grids of the future. So ABB is co-chairing the Careers Electric™ Coalition alongside the Siemens Foundation with a $1 million strategic pledge over two years to equip students and workers with the skills required in today's rapidly evolving energy, manufacturing, and infrastructure sectors.

At the research level, ABB has donated EUR 1.5 million to Aalto University (Finland) to support the new House of Energy Transition competence center, advancing research and development on breakthrough solutions for the green transition and deepening expertise in power electronics.

Together, these investments reflect our commitment to building not just the infrastructure the world's energy system demands, but the expertise to run it.