International smart grid demand will have a tremendous impact on transmission investments. These investments are projected to increase rapidly from $372.6 billion in 2025 to an astounding $573.7 billion by 2030. This boom constitutes a 9.2% compound annual growth rate over this timeframe. As technology advances, particularly in artificial intelligence (AI), the transformation of electricity generation, delivery, and consumption is becoming increasingly evident.
Smart grids use real-time data and algorithms to make electrical systems work more efficiently and reliably. AI pushes this progress even further. It does all this remarkably well in demand forecasting and predictive maintenance and renewables integration. Using complicated algorithms, AI allows grid operators to more accurately forecast energy demand, so that supply matches consumption patterns.
Additionally, AI’s use in predictive maintenance is transforming how utilities maintain their assets. This technology will help identify potential problems on the grid before they become catastrophic failures, which will increase reliability by minimizing downtime and lowering maintenance costs. Such clarity leads to sound investments by utility companies, which helps to explain the need for expanding transmission investments by a wide margin.
The seamless integration of these renewables into smart grids is yet another area where AI plays a pivotal role. As more renewable energy sources are incorporated into the grid, the need for robust systems that can manage fluctuating energy outputs becomes essential. Smart grid solutions support this integration through advanced metering infrastructure and two-way communication capabilities. These new capabilities provide unprecedented granular visibility into energy flows, allowing deeper management of generation and consumption.
Transmission investment was $343.2 billion in 2024, a significant jump of 10.5% compared to 2023. Of that figure, $246.4 billion was attributed to substations and $96.4 billion was related to transmission lines. This investment highlights the critical place that substations and transmission lines hold in the big picture of smart grids.
As utilities shift investments to modern smart grid technologies, the change is about more than infrastructure upgrades. It creates deep and lasting changes to the structure, delivery and consumption of electricity. The shift towards decentralized energy generation allows consumers to have more control over their energy usage and encourages the adoption of renewable energy sources.