The Renewable Energy Trap: A Warning to Nations Pursuing Blind Sustainability
As the world increasingly shifts toward renewable energy, there is a growing risk that nations could fall into the 'renewable energy trap.' This trap is the result of embracing an energy transition without fully understanding its economic, environmental, and geopolitical consequences. While renewable energy sources like wind, solar, and hydropower have been hailed as the future of global energy, nations rushing toward these technologies without a strategic plan may face grave economic and security challenges. The truth is that blind adherence to renewable energy, in its current form at least, is not the panacea many believe it to be. In fact, it could prove to be a short, green path to economic ruin for both developed and developing nations alike.
The False Promises of Renewables: Hidden Costs and Risks
The promise of renewable energy often comes with an aura of infallibility—clean, green, and limitless. However, this narrative overlooks the hidden costs of transitioning to renewable energy systems, many of which are disguised through misleading claims and incomplete accounting. For example, Germany's 'Energiewende' (Energy Transition) provides a cautionary tale of how well-intentioned policies can lead to unintended consequences.
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LNG Demand Defies Gloomy Predictions
The energy transition was supposed to kill demand for oil, natural gas, and coal. The more wind and solar capacity that was built, the less hydrocarbons were supposed to be in demand. Instead, demand for all three continues to grow—especially natural gas. So Big Oil is doubling down on this core business, much to the chagrin of transition advocates. CNBC's Sam Meredith noted in an article this week the latest quarterly reports of several Big Oil majors, all of which had emphasized the importance of their LNG business. Indeed, LNG has become a focus of attention for the supermajors in the age of artificial intelligence that, according to analysts, is going to drive global electricity demand sky-high—and wind and solar will not be able to cover that demand. Shell said two months ago it was going to add LNG capacity of 12 million tons by 2030. TotalEnergies is pursuing both its own LNG projects and LNG trading with other producers, with plans to boost its LNG volumes under management by 50% by 2030. BP started a new LNG project earlier this year offshore Senegal and Mauritania, and plans to turn the two countries into a major LNG hub. Exxon and Chevron are no less ambitious in the segment, with Exxon eyeing a 50% increase in its LNG assets by 2030, and Chevron is planning a further global expansion in its LNG operations as to CNBC's Meredith, this may be a risky bet in the context of forecasts saying that demand for natural gas would peak before 2030. The sources of those forecasts, besides the International Energy Agency (a vocal advocate for the energy transition) are other outlets that are vocal advocates for the energy transition, including climate change-focused think tanks and wind and solar power industry associations. Yet it was the International Energy Agency that said in a recent report it expected demand for natural gas to continue growing—and specifically demand for liquefied natural gas. 'The report sees global demand growth picking up again in 2026 and accelerating to around 2% as a considerable increase in LNG supply eases market fundamentals and fosters stronger demand growth in Asia,' the IEA reported. ?In 2026, LNG supply is set to rise by 7%, or 40 bcm – its largest increase since 2019 – as new projects come online in the United States, Canada and Qatar.' That could perhaps be dismissed as the last twitches of a dying industry before death proper occurs, but this is clearly not the case, based on the latest evidence of hydrocarbon use in Europe, which has been adding record amounts of wind and solar capacity for a decade, with the rate of additions continually accelerating. Yet the massive growth in wind and solar capacity has not translated into much lower demand for natural gas. Based on data for the first quarter of the year, the European Union's carbon dioxide emissions increased by 3.4% on the year, as the bloc's economy grew by 1.2%. The increase in emissions—and arguably the GDP growth—were the result of higher electricity generation from coal and gas power plants as wind and solar consistently under-delivered in the first three months of the year. That should be enough to cement Big Oil's decision to focus on LNG as a source of long-term profit growth, and it probably is, especially combined with the outlook for artificial intelligence growth and its effect on electricity demand. The 'electricity used by data centers alone, already as much as that of Germany or France, would by 2030 be comparable to that of India, the world's third-largest electricity user,' the International Monetary Fund said earlier this year. 'This would also leapfrog over the projected consumption by electric vehicles, using 1.5 times as much power than EVs by the decade's end.' To avoid tightness on the electricity market, leading to higher prices, supply had to increase. This is not going to be a wind and solar supply because wind and solar may be good for reputational purposes, but they do not generate dispatchable electricity. The kind of electricity that data centers need is dispatchable, meaning available on demand, round the clock. That is the kind of electricity that gas-powered stations generate. It is also the kind that coal power plants and nuclear reactors generate—which is why Big Tech is on a contract spree for all three. According to critics, the growth in demand for natural gas will compromise the goals of the energy transition. This is quite true, but the fact, as evidenced by the EU's emissions data for the first quarter, real life itself is constantly compromising the targets of the energy transition. Perhaps the time has come to review those goals and possibly revise them to better align them with actual events and developments in the demand and supply of energy in the real world. By Irina Slav for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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ASX Penny Stocks Spotlight: HMC Capital And 2 More Compelling Picks
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India celebrates clean energy milestone but coal still king
Non-fossil fuels now account for half of India's installed energy capacity -- years ahead of schedule -- but the third-largest greenhouse gas polluter remains deeply reliant on coal for electricity generation. "A landmark in India's energy transition journey," Minister of Renewable Energy Pralhad Joshi proclaimed after the world's most populous nation released figures in July. "Five years early," he added, referring to India's 2030 target under the Paris Agreement, and marking a step to the country's stated goal of reaching net-zero emissions by 2070. But while the 50 percent milestone is significant, climate expert Avantika Goswami says the figures -- which refer only to potential energy production -- tell just part of the story. "Overall, actual generation from renewable sources is still quite low," Goswami told AFP from the New Delhi-based Centre for Science and Environment (CSE). The reason is stark: nearly three-quarters of electricity continues to come from heavily polluting coal-burning power plants. - Coal paradox - The challenge becomes even more apparent when examining India's continued dependence on coal. Far from decreasing its usage, the globe's second-largest consumer of coal pushed up production of the dirty fossil fuel by five percent last year, mining one billion tonnes, according to the coal ministry. "Coal remains crucial," the ministry said. The stance highlights the practical challenges of India's energy transition. Coal is needed to fulfil power demands while storage capacity lags behind the surge in renewable sources of power. "The coal sector remains a crucial contributor to India's energy mix, powering over 74 percent of the country's electricity and sustaining key industries like steel and cement," the coal ministry said, celebrating what it dubbed "India's coal boom". This reliance places India in a challenging position globally. The country ranks behind only China and the United States for carbon emissions overall. But analysts point out that in a country of 1.4 billion people, per capita emissions are only one-third of the global average, according to official figures. "Looking at India's per capita emissions, the effort it is making, India is doing pretty well," said activist Harjeet Singh, head of the Satat Sampada Climate Foundation. India has set itself the daunting challenge of reducing emissions by 45 percent by 2030. At the same time, electricity needs are expected to more than double by 2047, according to the country's Center for Science and Environment. Supplying some of that demand "is likely to be met by the addition of renewables", Goswami said. - 'Waste that energy' - Half of India's 484.8 GW installed capacity is from non-fossil fuel sources. The majority comes from solar, totalling 119 GW -- the third-largest level globally. India is building one of the world's largest solar and wind energy farms, spread over a desert the size of Singapore. It is followed by hydro and wind, and also nuclear power -- which makes up less than two percent of the total mix. But solar and wind create steady power only when the conditions are right, and India's storage capacity is a meagre 505 MWh -- far lower than it can generate. The storage bottleneck was not lost on the renewable energy minister. Speaking at the inauguration of a battery storage systems plant in June, Joshi said India's renewable energy potential was "growing fast" and "adding 25–30 GW every year". He added: "But without storage, we will either waste that energy or fall back on coal when renewables dip." Building storage based on batteries requires rare earth metals, with rival and neighbour China controlling 70 percent of the world's supplies. "We still remain dependent on China," said Harjeet Singh, the climate activist. Chinese Foreign Minister Wang Yi was in New Delhi for talks on Tuesday, with the supply of rare earth metals on the agenda. One solution India is considering is pump-hydro energy storage projects. When wind and solar plants produce excess energy, water is pumped into high reservoirs. That stored energy can then be released to generate power when demand surges. But Goswami believes the transition to cleaner power requires a multi-pronged approach. The transition to cleaner power must come from "emission intensity reduction" of often inefficient coal plants, combined with better integrated renewable energy in the grid that "will actually make the shift happen". pzb/abh/pjm/abs/cwl
