Green Grids for a Net-Zero World

Most governments have pledged to transition to net-zero carbon emissions by mid-century. But behind the pledges and climate summits lies a hard question: how do you keep the lights on in a world that demands ever more energy while phasing out fossil fuels?

The answer may not lie in another wind park in the North Sea or solar farm in the Sahara. Instead, the real revolution could come from something less visible but potentially transformative: high-voltage “green grids” that move clean electricity across borders and continents. These power highways could reshape the global energy map as dramatically as oil pipelines did in the last century—though with equally complex risks.

A Transition Is Already Underway

Wind farms and solar panels are already transforming skylines and economies, but the transition has barely begun compared to what climate targets require. According to the International Renewable Energy Agency (IRENA), global solar capacity reached 1,055 gigawatts (GW) in 2022, with wind contributing another 899 GW. Together, that is enough to power over 1.5 billion homes. However, it still represents only a fraction of global demand.

The gap is daunting. To remain on track with the Paris Agreement’s 1.5°C target, the world must reach more than 5,400 GW of solar and 3,500 GW of wind by 2030—a fivefold increase in just seven years. Meeting that trajectory will require a staggering $24.6 trillion in power sector investment, plus another $18 trillion for grids and storage. The challenge is not only scale but also financing: who provides the capital, how risks are shared and whether projects deliver sustainable returns.

China dominates manufacturing, accounting for more than half of the world’s new solar capacity in 2022 and controlling approximately 80% of the Photovoltaic(PV) supply chain. The European Union operates the world’s most interconnected power market where French nuclear, Spanish solar and German wind already balance each other. The United States is scaling offshore wind and transmission, though politics and permitting remain bottlenecks.

Progress, however, is uneven elsewhere. In Africa, South Asia and Latin America, financing is scarce, grids are fragile and regulatory systems often weak. Still, there are bright spots: Morocco is building solar farms to serve Europe, Laos exports hydropower to its ASEAN neighbors and Nepal has begun selling surplus electricity to India and Bangladesh. In this emerging order, geography itself is becoming a form of currency—one that comes with both opportunities and risks.

Renewable Energy Trade

Cross-border electricity trade is not new in the world. However, its evolution is being accelerated by the growth of renewable energy sources. Interconnected grids and, in some cases, dedicated transmission corridors are facilitating flows of clean electricity across political boundaries.

Consider Norway’s long-standing role as a hydropower exporter to continental Europe. Hydropower accounts for around 92% of the country's electricity, contributing to one of the cleanest grids in the world. In 2020, Norway posted net exports of 20.5 TWh. Through the Nordic power market, which ties Norway to Sweden, Denmark, Finland, Germany and the UK, Norway can send surplus power south when its reservoirs are full and draw on imports in dry years.

In Southeast Asia, Laos has rightfully earned the nickname “Battery of Southeast Asia”. The country aims to achieve 12 GW of installed capacity by 2025, increasing to 16 GW by 2035, with annual output expected to reach 63.5 TWh by the mid-2030s. Tapping its vast river systems, Laos is steadily ramping up electricity exports to Thailand, Vietnam and Cambodia. These flows not only generate vital revenue but also finance infrastructure development, embedding Laos more deeply into regional energy planning.

Similarly, Morocco is positioning itself as a solar export hub for Europe. Its flagship 580 MW Noor Ouarzazate CSP complex stands as a cornerstone of the country’s ambition to reach a 52% renewable share in its electricity mix by 2030. Alongside the growth of PV infrastructure, Morocco is expanding interconnections with Spain and looking further across the Mediterranean, envisioning an energy trade that will help Europe reduce its reliance on fossil fuels and enable Morocco to monetize its exceptional solar resources.

Beyond regional initiatives, the push for grid interconnection has gained significant momentum globally. The Green Grids Initiative (GGI), launched at COP26 by the UK and India, now counts endorsements from nearly 90 countries and mobilizes $21.4 trillion in investment through 2050 to build green grid infrastructure. GGI supports policy, planning, supply-chain coordination and climate-proof financing to “double grid investment needed by 2030”.

The initiative was merged with India’s One Sun One World One Grid (OSOWOG) concept, first proposed in October 2018 and officially launched alongside the UK’s GGI at COP26 in 2021. According to Ajay Mathur, Director-General of the International Solar Alliance, the initiative could enable up to 2,600 GW of interconnection capacity by 2050, potentially yielding 226 billion euros in annual power savings. “If the world has to move to a clean and green future, these interconnected transnational grids are going to be critical solutions,” Indian Prime Minister Narendra Modi said during its launch.

These arrangements bring not only economic gains but also diplomatic dividends. Exporting clean energy can become a tool of green diplomacy, as neighboring countries share infrastructure, incentives and grid planning.

Still, the economics are not straightforward. Large-scale grids demand long-term capital with uncertain return on investment. Without subsidies or multilateral financing, many projects may stall. For consumers, costs could translate into higher tariffs unless offset by efficiency gains. Political risks are also real: energy interdependence can improve security or create new vulnerabilities.

The Economics and Diplomacy of Green Trade

So, why does renewable energy trade matter so much? For importers, renewables can reduce fossil fuel bills and exposure to global price shocks. For exporters, diversifying their economies and strengthening their balance sheets can be beneficial. On a global scale, trade in “green electrons” may become linked to carbon markets, with certificates attached to each megawatt exported.

But grids are not just economic infrastructure; they are political. Morocco’s solar exports bind it closer to Europe. Laos’s hydropower gives it leverage in the ASEAN bloc. Nepal’s exports strengthen its ties with India and Bangladesh, but also deepen dependence on Indian transmission lines. Such interdependence can foster trust, but it can also introduce geopolitical risks, particularly in situations where power asymmetries exist.

Although not without flaws, Europe offers a working model. Its interconnected grid has improved resilience and reduced costs, but it still faces congestion, renewable intermittency and disputes over nuclear energy. South Asia remains far more fragmented, with limited trust and patchy infrastructure. A fully integrated South Asian grid could unlock Himalayan hydropower to complement India's solar energy, but political will and harmonized regulation remain the missing ingredients.

International bodies underscore the scale of required infrastructure. The International Energy Agency (IEA) projects that achieving the COP28 goals will need $800 billion annually in grid modernization and expansion by 2030, up from current spending of $260 billion.

As IEA Executive Director Fatih Birol notes, “International cooperation is vital to deliver fit-for-purpose grids, sufficient energy storage and faster electrification, which are integral to move clean energy transitions quickly and securely.”

High Hopes in the Himalayas

Nestled in the Himalayas, Nepal illustrates both the promise and the pitfalls of green grid futures. Often described as a “sleeping hydropower giant”, Nepal’s rivers hold theoretical potential exceeding 83,000 MW which is enough to power much of South Asia. Realistically, about half of that is economically and technically feasible. Yet today, Nepal generates only around 3,400 MW. During the monsoon season, the country produces more electricity than it can use, resulting in a daily surplus of up to 700 MW. Most of which goes untapped due to limited cross-border links and weak domestic demand.

However, this picture is beginning to shift a bit as Nepal already exports electricity to India and, as of late 2024, began exporting 40 MW to Bangladesh through India’s transmission grid. By 2035, the government hopes to generate 28,500 MW. If achieved, this could transform Nepal’s economy, turning energy into one of its most valuable exports.

There, however, are various obstacles such as inconsistent financing for large projects, while seasonal variability leaves the winter months power-deficient. Dependence on India’s grid for regional trade raises concerns about leverage and long-term bargaining power, especially as India positions itself as the hub of South Asia’s electricity trade. Hydropower projects also bring social and ecological pressures such as community resettlement, loss of farmland and disruption of river ecosystems.

Nepal’s task is to expand exports while ensuring projects are financially sustainable, politically balanced and environmentally responsible. If managed well, hydropower could become a stable engine of growth for Nepal. Otherwise, it risks deepening dependency and sparking domestic backlash.

The Bigger Picture

Only about 3% of global electricity is currently traded across borders. This highlights both the scale of the challenge and the size of the opportunity. Expanding cross-border grids would make a net-zero world far more achievable, allowing surplus renewables in one region to displace fossil fuels in another. Without them, valuable clean power will be wasted while many countries remain locked into coal and gas.

The vision is compelling: Saharan solar feeding Europe, Himalayan rivers powering South Asia, Mongolian wind stabilizing China’s coast. But its realization depends less on technology, which largely exists, and more on the politics, trust and financing needed to build reliable, interconnected systems.

Green grids are not just technical infrastructure; they represent the arteries of a new global energy economy. Delivering on their promise will require governments and financiers to de-risk investments through blended finance and multilateral guarantees, harmonize regulations for cross-border reliability and fair competition, and strike a balance between growth and sustainability to avoid ecological and social harm. If implemented effectively, green grids could become a cornerstone of the net-zero transition, transforming energy markets while reshaping global geopolitics.

The stakes could not be higher.

This opinion article was originally published in October 2025 issue of New Business Age magazine.