The International Energy Agency’s new assessment of electricity grids reaches the conclusion the industry has been circling for two years: in the age of electricity, the network is the constraint. Generation is cheap and getting cheaper; the wires, transformers and connection queues that move power are where projects now wait, and the IEA’s work sets out the investment and reform programme its models say the wait requires.
The demand side of the argument arrived in the same week’s US data. The EIA reported that PJM, ERCOT and the Southwest Power Pool all set peak load records this summer, the first broad based US load growth in a generation, driven by data centres, electrification and heat. ISO New England’s wind generation, the EIA also reported, ran about 68 percent higher than last year, a reminder that the resource is arriving faster than the system built to absorb it.
For commodity markets the grid thesis reprices the transition metals by deliverability rather than by resource: copper for networks, the story running through today’s mining edition from Pilgangoora to Anglo’s copper approaches, and the permitting and connection reform that decides how much of the paper demand becomes physical offtake.