{"id":66261,"date":"2025-03-10T15:47:03","date_gmt":"2025-03-10T22:47:03","guid":{"rendered":"https:\/\/energi.media\/?p=66261"},"modified":"2025-03-10T15:47:03","modified_gmt":"2025-03-10T22:47:03","slug":"opinion-fossil-fuel-incumbents-ignore-energy-transition-outside-the-us-at-their-peril","status":"publish","type":"post","link":"https:\/\/energi.media\/opinion\/opinion-fossil-fuel-incumbents-ignore-energy-transition-outside-the-us-at-their-peril\/","title":{"rendered":"Opinion: Fossil fuel incumbents ignore energy transition outside the US at their peril"},"content":{"rendered":"<p><em><strong>By Kingsmill Bond<\/strong><\/em><\/p>\n<p style=\"font-weight: 400;\">The latest issue of <a href=\"https:\/\/www.foreignaffairs.com\/united-states\/troubled-energy-transition-yergin-orszag-arya\">Foreign Affairs<\/a> has a long article by Daniel Yergin and others on the so-called \u2018troubled energy transition\u2019.\u00a0 They set out a series of incumbent talking points to argue that the energy transition is not happening and will not happen any time soon, meaning that there is plenty of room for more of the fossil fuels produced by those incumbents.\u00a0 Their analysis is flawed, and its conclusions are incorrect.<\/p>\n<p style=\"font-weight: 400;\">The main mistake is a failure to understand what is happening outside the fossil fuel system and beyond the United States.\u00a0 The energy transition is driven by the rise of new energy technologies, which we call electrotech, and which now make up <a href=\"https:\/\/www.iea.org\/reports\/world-energy-investment-2024\">two thirds<\/a> of spending on energy.\u00a0 Electrotech is that cluster of special technologies enabling the rapid growth of electricity supply (solar and wind), demand (EV and heat pumps) and connection (batteries, grids, digitization and AI).\u00a0 And these continue to enjoy a spectacular fall in costs and exponential growth in deployment.\u00a0 Solar panel costs have halved since the start of 2023, and battery storage costs halved in 2024.\u00a0 In 2024 we installed as much <a href=\"https:\/\/volta.foundation\/battery-report-2024\">battery storage<\/a> as we have done in the last 30 years, while clean energy now supplies <a href=\"https:\/\/ember-energy.org\/latest-insights\/global-electricity-review-2024\/\">all the structural growth<\/a> in electricity demand and is still growing fast.\u00a0 Electricity demand, the second vector of the energy transition, is <a href=\"https:\/\/www.iea.org\/reports\/electricity-2025\">surging<\/a> across the world, and is about to make up all the growth in final energy demand as we move into the Age of Electricity.<\/p>\n<p style=\"font-weight: 400;\">China the electrostate is driving the transition, and Chinese electrotech is cascading out across the <a href=\"https:\/\/rmi.org\/insight\/powering-up-the-global-south\/\">Global South<\/a>, enabling countries to grow faster based on their huge domestic energy sources of solar and wind.\u00a0 The peoples of the Global South are moving to the electricity based energy system being rolled out today in China, not the fossil fuel heavy system of the last century.<\/p>\n<p style=\"font-weight: 400;\">Yergin makes much of the fact that the share of fossil fuels in primary energy supply is still around 80%, but this is to look backwards at stocks, not forwards at flows: to understand the future, you need to look at who is providing the growth, and this is increasingly coming from electrotech solutions.<\/p>\n<p style=\"font-weight: 400;\">The reality is that the collapse in costs has started a technology race to the top between companies and countries to dominate the commanding heights of a rapidly changing energy system.\u00a0 Three forces comes together to ensure that this electrotech revolution will continue: efficiency, cost and energy security.\u00a0 Electrotech is <a href=\"https:\/\/rmi.org\/energy-after-fire\/\">three<\/a> times more efficient than burning stuff, saving the associated thermodynamic losses.\u00a0 Electrotech is modular and a technology, meaning that it enjoys <a href=\"https:\/\/www.inet.ox.ac.uk\/files\/energy_transition_cost_INET_working_paper_with_SI1.pdf\">learning curves<\/a> so costs keep falling and deployment keeps rising on a well-trodden path called an S-curve.\u00a0 And renewables by definition are local, enabling every country in the world to enjoy energy security from its own sun and wind.<\/p>\n<p style=\"font-weight: 400;\">Yergin deploys a series of straw man arguments which are easy to knock down, but simply not relevant to the energy transition.\u00a0 The fact that it is hard to hit net zero does not save the fossil fuel industry from <a href=\"https:\/\/carbontracker.org\/reports\/decline-and-fall\/\">disruption<\/a> as growth turns to decline.\u00a0 The pushback against ESG is not relevant to the technology race to the top.\u00a0 And there was no consensus formed in lockdown that we should do the same every year.<\/p>\n<p style=\"font-weight: 400;\">He argues that we always use more and more of every type of energy. This is factually incorrect &#8211; fodder used to be one of the primary sources of energy supply, but the <a href=\"https:\/\/histecon.fas.harvard.edu\/energyhistory\/DATABASE%20World%20Energy%20Consumption(MALANIMA).pdf\">peak<\/a> was long ago, and most analysts no longer bother to count it.\u00a0 It is also missing the point that price and availability determine what energy source we use.\u00a0 As electrotech continues to get cheaper and grow exponentially, it pushes more expensive fossil technologies out of the energy mix, as we have seen with coal in the United States and Europe.<\/p>\n<p style=\"font-weight: 400;\">He talks about the supposedly high <a href=\"https:\/\/rmi.org\/insight\/the-great-reallocation\/\">capital costs<\/a> of the energy transition, without considering the much higher costs of continuing to maintain the expensive fossil fuel system and channel trillions of dollars in <a href=\"https:\/\/data.worldbank.org\/indicator\/NY.GDP.PETR.RT.ZS\">rents<\/a> to its petrostates and oligarchs.\u00a0 He argues that the Global South cannot deploy renewables, without recognizing that for the Global South as well, local abundant solar and wind is the <a href=\"https:\/\/rmi.org\/insight\/powering-up-the-global-south\/\">cheapest<\/a> way to get energy to their people, as seen most recently in Pakistan or Uruguay.\u00a0 Solar and wind are now racing up S-curves of deployment across the Global South, and a quarter of the grouping has already leapfrogged the United States.<\/p>\n<p style=\"font-weight: 400;\">Yergin argues that fossil fuels are a tool for energy security, when in reality 80% of people live in countries that import fossil fuels, and every country has access to the renewable sources that make available <a href=\"https:\/\/carbontracker.org\/reports\/the-skys-the-limit-solar-wind\/\">100 times more energy <\/a>\u00a0than the fossil fuel system.\u00a0 He argues that renewables require large amounts of minerals, without noting that the fossil fuel system requires around 100 times more <a href=\"https:\/\/rmi.org\/insight\/the-battery-mineral-loop\/\">material <\/a>\u00a0by weight because we burn them every single day. He references that tired old idea of the \u2018energy trilemma\u2019 without realizing that it has been solved by electrotech, which is cheaper, cleaner and local.\u00a0 And he appears to think that the energy transition is driven by the United States, when in reality it is driven by <a href=\"https:\/\/rmi.org\/insight\/x-change-the-race-to-the-top\/\">China<\/a>, and fossil fuel demand has been falling in the United States in any event since 2008.<\/p>\n<p style=\"font-weight: 400;\">The article makes a number of valid arguments which highlight the need for action.\u00a0 There is local opposition to change, and that needs to be handled sensitively.\u00a0 We do need to ensure that China does not dominate every aspect of the transition.\u00a0 The path to the future is not straight and will vary by country.\u00a0 Many electrotech technologies need to be rolled out faster, some need to be improved, and others to be invented.\u00a0 There are many barriers as we challenge the entrenched power of fossil fuel elites.\u00a0 So far we have found solutions to these problems, and we need to continue to do so.<\/p>\n<p style=\"font-weight: 400;\">The world is changing fast, and to the <a href=\"https:\/\/rmi.org\/insight\/inside-the-race-to-the-top\/\">winner<\/a> will come the spoils.\u00a0 Peaking demand for fossil fuels today will be followed by decline before the end of the decade, and that will lead to stranded assets, falling prices and collapsing petrostates.\u00a0 Incumbent arguments seeking to prop up the status quo serve only to distract from the real challenges that face us, hold back the United States in the greatest race of our times, and hand victory in the technologies of the future to its strategic rivals.<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>By Kingsmill Bond The latest issue of Foreign Affairs has a long article by Daniel Yergin and others on the so-called \u2018troubled energy transition\u2019.\u00a0 They set out a series of incumbent talking points to argue <a class=\"mh-excerpt-more\" href=\"https:\/\/energi.media\/opinion\/opinion-fossil-fuel-incumbents-ignore-energy-transition-outside-the-us-at-their-peril\/\" title=\"Opinion: Fossil fuel incumbents ignore energy transition outside the US at their peril\">[Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":66262,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[6],"tags":[91,103,41,14,95,16,96,517],"class_list":{"0":"post-66261","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-opinion","8":"tag-china","9":"tag-electricity","10":"tag-energy","11":"tag-featured","12":"tag-fossil-fuels","13":"tag-oil-and-gas","14":"tag-renewable-energy","15":"tag-renewables"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin 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