Energy transition

• 1. Introduction

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  Energy transition names one of the largest reorganizations of human civilization ever attempted. Right now, across every continent, the way people produce and use power is being fundamentally overhauled. Over three-quarters of the world's energy still comes from burning fossil fuels, and that combustion is responsible for most human-caused greenhouse gas emissions. The 2015 Paris Agreement set the terms: emissions must reach net-zero by mid-century. That deadline is not far off. What makes this moment different from any energy shift before it is that this one is deliberate. It is driven by policy, by collapsing costs, and by the urgent arithmetic of a warming planet. To understand how extraordinary that is, it helps to look at what came before.

• 2. A Word With a History

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  US President Jimmy Carter put the phrase "energy transition" in front of a national audience in his 1977 Address to the Nation on Energy. He reached back through history to argue that humanity had already navigated two such shifts, and that a third was now unavoidable. Because the country was running out of gas and oil, he called for strict conservation, a return to coal, and permanent renewable sources like solar power. The term crossed into global circulation after the 1979 second oil shock, gaining formal recognition at the 1981 United Nations Conference on New and Renewable Sources of Energy. From the 1990s onward, climate change took center stage in these debates, reshaping the concept from a matter of resource depletion into a matter of survival. But historian Jean-Baptiste Fressoz challenged the whole framing. He argued the word "transition" was always a political goal, not a description of the past. When you measure raw energy use rather than percentage shares, every new fuel humans adopted was added on top of the old ones, never instead of them. The 19th century burned more wood even as coal use soared. The spread of the car in the 20th century increased both oil and coal consumption simultaneously. Fressoz called these shifts "energy additions," not transitions. That debate has not been settled, and as of 2024, use of all forms of primary energy has continued to increase.

• 3. What Changed After 2010

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  From 2010 to 2019, the unit cost of solar energy dropped by 85 percent and wind energy by 55 percent. Lithium-ion batteries fell by 85 percent over the same span. Those numbers reordered the economics of electricity generation. By 2021, new renewable capacity represented more than 80 percent of all newly installed power. After 2024, clean energy became cheaper than ever: global solar module prices fell 35 percent to less than 9 cents per kilowatt-hour, and electric vehicle batteries saw their best price decline in seven years. Wind and solar are now the cheapest option for new installations in many parts of the world, and combined onshore wind or solar with a few hours of storage already undercuts gas peaking plants on levelized cost. That price collapse was not accidental. Germany's experience shows how financial policy and market learning interacted. After the 2008 financial crisis, Germany offered cheap loans with low interest rates to stimulate its economy. Renewables manufacturers benefited, gained scale, and drove manufacturing costs down further. By 2021 the International Renewable Energy Agency reported capital costs for solar in Germany of around 1.1 percent and for wind onshore of around 2.4 percent, compared with roughly 5.1 percent and 4.5 percent respectively in the early 2000s. The 2022 Russian invasion of Ukraine added energy security to the economic case, particularly in Europe and Taiwan, where dependence on imported fossil fuels suddenly looked far more dangerous than it had before.

• 4. The Technologies Doing the Work

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  Wind and solar sit at the center of the low-carbon energy system. Each could reduce net emissions by 4 billion tons of carbon dioxide equivalent per year, and half of those reductions come with lower net lifetime costs than the reference alternatives. By 2019, wind was supplying 5.3 percent of worldwide electricity and solar 2.6 percent, but both have grown nearly exponentially since. Hydroelectricity remains the largest single source of renewable electricity, providing 16 percent of global electricity in 2019, though its geography-bound nature limits future growth. The problem with wind and solar is variability: they produce when the weather cooperates. Electrical grids must be redesigned around that reality. The International Energy Agency's report on electricity grids called for increasing grid investments to over 600 billion dollars annually by 2030, up from 300 billion dollars. By 2040, the grid must expand by more than 80 million kilometers. Failing to do so could add 58 gigatonnes of carbon dioxide emissions by 2050. Storage is the complementary piece. As of 2020, pumped storage hydroelectricity accounted for the great majority of energy storage capacity installed worldwide. Large-scale batteries are increasingly used to stabilize grids, reacting within seconds to fast fluctuations. Heat pumps are the other major lever. The IEA estimates that heat pumps currently provide only 5 percent of space and water heating globally, but could in principle cover over 90 percent. Industrial heat is harder: the production of ethylene via steam cracking requires temperatures as high as 900 degrees Celsius, which heat pumps cannot reach, meaning new processes are required in the chemical industry.

• 5. Who Pays and Who Benefits

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  In Boone County, West Virginia, the decline of coal revenues forced the closure of schools and cuts to public services including health and transport. That example is not unique. Employment loss in fossil-fuel industries tends to be geographically concentrated, while new renewable jobs are created somewhere else entirely. The decarbonization movement is predicted to produce a net positive effect on global employment, but many of those jobs appear in different regions from the ones suffering losses. The costs of renewable infrastructure are typically passed on to consumers, which falls hardest on low-income households who already spend a larger proportion of income on energy. Households of colour and low-income families are also statistically more likely to live in energy-inefficient housing, amplifying the burden of rising prices. The energy justice framework tries to name these dynamics precisely, drawing on three dimensions: procedural justice, which demands meaningful participation in decisions; distributive justice, which concerns who bears infrastructure burdens and who captures revenues; and recognition justice, which focuses on historically marginalised groups including indigenous communities whose governance systems rest on different relationships with land. The German village of Feldheim offers one example of procedural justice working: local residents and developers used periodic village meetings and plain-language "translators" to explain technical details, enabling genuine community input that locals felt legitimised the project. In Samsø, Denmark, at-cost shares in wind turbines were reserved for residents, though in practice land-owning farmers with access to capital captured a larger portion of the benefits than the wider community. From 1988 to 2005, Exxon Mobil spent nearly 16 million dollars on anti-climate-change lobbying and distributing misleading information, illustrating the organized resistance the transition has faced.

• 6. Security, Conflict, and Geopolitics

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  Historical data from 1960 to 2014 shows that periods of declining oil prices are associated with higher rates of conflict initiation by oil-producing states. When oil prices rise from relatively low to relatively high levels, the expected number of military disputes between countries drops by about half. That relationship suggests a counterintuitive risk: as the energy transition reduces global demand for oil, revenues for petrostates will fall, and historical patterns imply that could increase rather than decrease the likelihood of regional conflicts. The Russia-Ukraine war gave Europe a live demonstration of fossil-fuel dependency as a security vulnerability. The IEA's International Renewable Energy Agency projected in 2024 that by 2050, over half of the world's energy will be carried by electricity and over three-quarters of the global energy mix will come from renewables. Fossil fuels were still projected to supply 12 percent of energy in that scenario, overtaken by both biomass and clean hydrogen. Africa enters this landscape with structural advantages: the IEA has identified 37 minerals as critical for clean energy technologies and estimates global demand for them will increase by 235 percent by 2050. Africa holds large reserves of bauxite, cobalt, copper, chromium, manganese, and graphite. The African Union's Africa Mining Vision outlines a policy framework to convert that mineral wealth into sustainable economic development, which requires moving from raw commodity exports toward manufacturing higher value-added products.

• 7. Country by Country

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  India ranked third on Ernst and Young's renewable energy country attractiveness index, behind the United States and China. As of 2022, India's Central Electricity Authority was producing 160 gigawatts of electricity from clean sources, representing 40 percent of total capacity. Former Prime Minister Jawaharlal Nehru called hydroelectric plants the "temples of modern India"; notable installations include the 2,400 megawatt Tehri hydropower complex and the 2,255 megawatt Bhadla Solar Park, the world's largest as of the source. Coal still accounts for around 50 percent of India's energy production. Vietnam led Southeast Asia in solar and wind uptake, reaching about 20 gigawatts in 2022 from nearly zero in 2017. Thailand had the highest number of electric vehicle registrations in the region, with 218,000 in 2022. Switzerland illustrates what a decades-long head start can achieve: hydroelectricity supplies 59.6 percent of its electricity and nuclear power 31.7 percent, pushing its per capita energy-related emissions to 28 percent below the EU average. On the 21st of May 2017, Swiss voters accepted the new Energy Act establishing the Energy Strategy 2050, banning new nuclear construction. Germany's Energiewende, whose key policy document the federal government published in September 2010 - six months before the Fukushima accident - drove renewables from around 5 percent of electricity in 1999 to 46.2 percent in 2022. China General Nuclear Power Group is aiming for 200 gigawatts of nuclear capacity by 2035, produced by 150 additional reactors. The China Fourteenth Five-Year Plan placed green transition at the center of the country's pursuit of high-quality and sustainable growth.