Record 692 GW of new capacity added last year, but growth momentum slows led by China
Global grid connection backlog surpasses 2,500 GW; investments must expand 50% by 2030
Although global renewable energy installations reached an all-time high of 692 gigawatts (GW) last year, new capacity additions are projected to contract this year for the first time in five years. The rapid expansion of solar and wind power generation is increasingly outpacing the development of transmission infrastructure, creating significant bottlenecks in deploying new capacity.
In an interview with Reuters on the 27th (local time), Francesco La Camera, Director-General of the International Renewable Energy Agency (IRENA), forecasted that global renewable installations this year will fall short of last year's figures. He cited grid shortages, trade barriers, and a moderation in China's deployment pace as the primary headwinds.
According to IRENA, global renewable power capacity grew by 692 GW to reach 5,149 GW last year, marking a historic high. Renewables now account for approximately 49% of total global power generation capacity.
China Cuts Output Amid Grid Strain; Japan and Australia Also Struggle
In China, the world's largest renewable energy market, solar and wind installations have surged dramatically. However, as transmission networks fail to absorb all available electricity, the country has been forced to implement curtailments, actively reducing generation output.
Solar and wind power outputs fluctuate depending on weather conditions and time of day. When generation peaks during periods of low electricity demand, or when local grids lack the capacity to transport electricity from production hubs to consumption centers, operators must throttle back output even if generation facilities are fully operational. Consequently, installing additional hardware yields little actual increase in power supply if the underlying grid cannot handle the load.
Similar delays in grid expansion are constraining renewable deployment in Japan and Australia. Because renewable energy plants are frequently situated in remote areas far from major urban and industrial consumption centers, securing long-distance transmission corridors is critical. Building transmission lines often involves protracted timelines—exceeding those of power plants themselves—due to regulatory permitting, land acquisition, and local community negotiations.
La Camera noted that increased installations in other regions would likely be insufficient to offset China's growth deceleration, though he did not provide a specific numerical forecast for this year's additions.
Grid Connection Backlog Hits 2,500 GW; Escalating Investment Inevitable
A report entitled "Electricity 2026," published by the International Energy Agency (IEA) in February, revealed that global projects awaiting grid connection have surpassed 2,500 GW. This figure encompasses not only renewable energy plants but also large-scale power-demanding facilities such as energy storage systems (ESS) and data centers.
Source: IEA (February 2026) - Global Renewable Energy and Battery Grid Connection Backlog Status as of 2025
The IEA estimates that global grid investments, currently standing at approximately $400 billion annually, must be increased by 50% by 2030. This translates to an annual requirement of roughly $600 billion, necessitating massive capital expenditure across power infrastructure broadly, including ultra-high-voltage transformers and transmission hardware.
The surging demand for grid expansion also aligns with the overseas business ventures of domestic power equipment manufacturers. HD Hyundai Electric and Hyosung Heavy Industries are expanding their supplies of power infrastructure, such as ultra-high-voltage transformers, in North America. While recent order intake includes power equipment tailored for AI data centers, the broader proliferation of renewable energy generation remains a primary catalyst driving investments in transmission and distribution networks.
"The primary reason new installations will not break records again this year is the imbalance between generation capacity and transmission-distribution capabilities," La Camera stated.
Having set record-breaking installation figures last year, the renewable energy industry now faces a severe constraint: grid deficits. Even if additional solar panels and wind turbines are installed, achieving meaningful gains in actual power supply remains difficult without adequate pathways to transmit the generated electricity. Transmission networks, failing to keep pace with the rapid construction of power plants, are now beginning to slow down new generation projects altogether.
