A major blackout that affected vast areas of Spain and Portugal on 28 April has brought renewed attention to the vulnerabilities of centralized energy systems and the growing importance of local energy solutions.
In just five seconds, two-thirds of the region’s electricity supply vanished across the Iberian Peninsula in Europe, disrupting transportation, communication networks and essential services. The incident in the region exposed the limitations of current grid infrastructure to handle growing electricity demand and increasing shares of variable wind and solar power to meet climate goals.
Rising pressure on power grids
Electricity demand is increasing globally, experts warn, driven by economic growth, the electrification of transportation, heating and cooling, and the rise of data centers and AI. This growing demand, experts say, must be met as fossil fuel power plants — which provide consistent, controllable electricity — are phased out, and variable renewables like wind and solar take on a larger share. Unlike fossil fuels, wind and solar are weather-dependent and harder to predict, making it more complex to maintain grid stability.
Historically, the response has been to expand large-scale transmission infrastructure and build more flexible backup power plants. But this approach, according to experts, is running into obstacles, including materials shortage, insufficient utility funding, and the urgent need to move away from fossil fuels to avoid a climate catastrophe. Additionally, large infrastructure can be more vulnerable conflict and systemic failure, as seen in Ukraine and now Spain, as it creates easier targets or single points of failure.
Shift towards local energy solutions
Local energy systems generate power close to where the energy is consumed, reducing the need for extensive infrastructure and limiting the impact of external faults. These systems can also be integrated with other local resources and services such as water, waste, heating, cooling and transport, improving overall efficiency, reliability, ultimately reducing the cost of energy, experts say.
"Local energy systems are no longer optional, they are the backbone of a modern, secure, and climate-resilient energy future,” said Gulnara Roll, Head of the Mitigation Branch at UNEP. “As grids strain under rising demand and a changing climate, investing in decentralized, smart solutions is not just about resilience, it's about accelerating the clean energy transition."
Examples of such integration already exist. In Stockholm, Sweden, local waste heat, bioenergy and renewables are operated in an integrated way, that makes each individual system more resilient and efficient. In Odense, Denmark, excess heat from a data center is used in district heating systems to heat buildings, reducing the strain on the national grid.
Reducing strain, increasing resilience
Local energy systems can reduce peak loads, offer backup energy during grid emergencies, reduce energy costs and help balance local supply and demand. Decentralized energy systems also make grids more resilient and facilitate the integration of renewable energy sources, according to experts. For example, Germany and Australia, have developed “Virtual Power Plants”, linking producers and consumers through software to stabilize demand. Pilots are underway in India and Mexico.
Other examples include Philadelphia’s rail system, which shifts electricity use to off-peak hours, enhancing grid stability while reducing costs. California’s “Flex Alert” system encourages residents in high-demand locations to reduce energy consumption. According to experts, such systems could prevent blackouts.
Rebuilding Ukraine with clean, local energy
In Ukraine, local energy systems are also seen as a solution to rebuilding the country’s war-damaged energy infrastructure and meeting climate commitments under the Paris Agreement.
Ukraine aims to source 35 per cent of heating and 25 per cent of electricity from renewables by 2030. To support this, UNEP and the International Renewable Energy Agency launched a multi-year programme, with funding from the Government of Italy, that will help cities across Ukraine shift toward clean modern district heating, on-site renewables, and smarter integration across heat, power and essential public services. Still in the early stages, the programme supports the cities of Kharkiv and Mykolaiv on feasibility studies, ten-year energy plans and partnerships with international financial institutions to ensure projects are bankable and attract investment.
A global push for integrated local energy solutions
UNEP is working with cities worldwide to scale local integrated energy solutions, attracting investment by demonstrating viable business models, supporting the development of local energy projects, and connecting experienced cities with emerging ones.
“With energy systems facing growing stress from climate change, further electrification of the economy, and geopolitical risks, local energy solutions are not just a backup plan,” said UNEP’s Roll. “They are a path to a resilient, secure, and climate-friendly energy system that ensures a sustainable future.”
The Sectoral Solution to the climate crisis
UNEP is at the forefront of supporting the Paris Agreement goal of keeping global temperature rise well below 2°C, and aiming for 1.5°C, compared to pre-industrial levels. To do this, UNEP has developed the Sectoral Solution, a roadmap to reducing emissions across sectors in line with the Paris Agreement commitments and in pursuit of climate stability. The six sectors identified are: energy; industry; agriculture and food; forests and land use; transport; and buildings and cities.
