We are not experiencing a normal energy crisis.
We are experiencing a dependency crisis.
For years, many economies – especially in Europe – have based their energy supply on fossil fuel imports: oil, gas, and geopolitically sensitive supply chains. This worked as long as markets were stable and political risks seemed manageable. Those times are over.
Geopolitical tensions, volatile prices and uncertain supply chains now clearly show how vulnerable this system really is. Energy is no longer merely critical infrastructure and the foundation of economic value creation. More than ever, it has become a strategic factor and a question of sovereignty.
Christoph Dorigatti sheds light on grid bottlenecks.
The logical answer appears clear: more renewable energy, more electrification, more independence from fossil fuels. But this is exactly where the real problem begins.
Public debate often focuses more heavily on energy generation – partly because new wind farms, solar parks or storage facilities are more visible and politically easier to communicate. Power grids, on the other hand, usually operate in the background and only attract attention when bottlenecks or outages occur.
Yet intelligent power grids are becoming the decisive enabler of the energy transition. Renewable energy must not only be generated, but also distributed, controlled and integrated into the grid in real time.
We are investing heavily in new forms of energy generation while the infrastructure required to transport and distribute this energy is not expanding at the same pace. The rollout of renewable energy is progressing, but the digitalization of power grids is lagging behind. This is not a side issue of the energy transition. It is its central bottleneck.
The International Energy Agency (IEA) highlights the magnitude of the challenge: by 2040, more than 80 million kilometers of power grids worldwide will need to be modernized, digitalized or newly built – roughly equivalent to the entire current global grid infrastructure.
At the same time, the IEA is now clearly warning that power grids could become the central bottleneck of the energy transition. Globally, around 1,650 gigawatts of solar and wind projects are currently waiting for grid connections.
The economic impact is also substantial. Delays in grid expansion can dramatically increase the costs of the energy transition. In the European Union alone, the costs of grid congestion and redispatch have already reached around €4.2 billion per year. Overall, the IEA estimates that delays in grid expansion could increase the costs of the energy transition by up to 40 percent.
These are not abstract future scenarios. They are the economic reality of a system that cannot function without the appropriate infrastructure. And yet, grid expansion and automation are still frequently discussed primarily as a cost issue. This perspective falls short.
The return on investment does not emerge at some undefined point in the future. It is already being created today through the reduction of structural dependencies.
Every kilowatt-hour of renewable energy that can be generated locally and reliably integrated into the grid replaces imported fossil energy. It reduces price risks, geopolitical vulnerability and systemic uncertainties. In other words: grid expansion is a direct lever for energy-policy independence and system efficiency – and therefore a key factor for economic stability and security of supply.
The real question is therefore not whether these investments will pay off. They already do – because they eliminate risks that are significantly more expensive than any infrastructure investment. At the same time, we continue to underestimate the operational dimension of this transformation.
An energy system based on renewable sources is fundamentally different from the fossil-based system we are used to. It is far more decentralized, volatile and dynamic.
Energy is no longer generated and distributed linearly. Instead, it must be controlled and balanced in real time across countless feed-in points. This means that physical grid expansion is necessary, but not sufficient. Without digitalization in the form of software-defined automation, intelligent distribution and real-time data management, this complexity will not be manageable.
Intelligent grids must be capable of monitoring, controlling and optimizing energy flows in real time. They must seamlessly integrate private and industrial consumers, decentralized producers and storage solutions. And they must make decisions where speed and precision are critical – within the system itself and in real time.
This fundamentally changes the role of energy infrastructure. Grids are no longer passive transport routes for electricity. They are becoming active, software-defined digital platforms.
Against this backdrop, it also becomes clear why the current energy crisis is more than a short-term challenge. It reveals where the structural weaknesses of our system lie – and where the decisive levers for the future are located: in grid expansion, digital grid control and software-defined automation.
If grid expansion continues to lag behind actual demand, three major risks will emerge: rising energy costs, declining industrial competitiveness and increasing instability of energy systems.
We are already seeing the consequences today. Grid bottlenecks are delaying the connection of new wind and solar parks, renewable energy must sometimes be curtailed, and companies are unable to obtain sufficient grid capacity for new production facilities. As a result, redispatch costs are increasing, investments are being delayed and dependency on fossil-based reserve capacities remains in place.
The expansion and digitalization of power grids are not optional projects that can be prioritized or postponed depending on budgets or lobbying pressure. They are the prerequisite for freeing the world from its dependence on fossil fuels.
That is precisely why the return on investment is not a forecast. It is already a logical consequence. The real danger therefore does not lie in excessive investment. It lies in holding on for too long to a system that keeps us dependent – while simultaneously neglecting the infrastructure that could make us independent.
Ultimately, the future of our energy supply will not be determined by how much energy we generate. It will be determined by whether we have built the systems required to distribute and use that energy intelligently.
And this is exactly where the right decisions must be made today.
Learn how power grids can become resilient, software-defined and controllable, compliant with relevant standards such as ISO, ISA, IEEE and IEC, and evolve into true smart grids here.
A blog article by Christoph Dorigatti.