Article Review: The Troubled Energy Transition

The Troubled Energy Transition: How to Find a Pragmatic Path Forward, published in Foreign Affairs Magazine dated February 25, 2025

Authors: Daniel Yergin, Peter Orszag and Atul Arya

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This article recommends a revised way of thinking about the Energy Transition: that there is and will be significant increasing demand for energy from all nations in the near and long-term; and national energy security (and well-being) concerns supercede climate goals.

There is much good news about the Energy Transition, including this in the first paragraph of their article:

In 2024 global production of wind and solar energy reached record levels—levels that would have seemed unthinkable not long before. Over the past 15 years, wind and solar have grown from virtually zero to 15 percent of the world’s electricity generation, and solar panel prices have fallen by as much as 90 percent.

However, this article sets out these main points, urging readers to be realistic about how enormously complex the Energy Transition will be:

• total world energy consumption will continue to increase dramatically

  • the Energy Transition is not a simple replacement issue (i.e. replace oil/gas with renewables)

  • instead, it will mean increasing overall energy production (i.e. increase new renewables and also new natural gas), first, and then replacing oil/gas with renewables eventually

  • increasing demand in the Global North / developed countries = AI and data centres;

  • increasing demand in the Global South = to catch up to the Global North

    • about 600-700M have no electricity, at all

    • another 2B+ use less electricity, per year, than your refrigerator does

• Energy Security concerns of each nation. Most of the world (this article suggests close to 6B of the world's population) have constraints on their energy. So their concerns about the well-being of their citizens (which has domestic stability implications) are primary over the goals of reducing carbon / GHG emissions.

  
  

The above are not new concerns and all the country negotiators knew this when drafting the Kyoto Protocol (1997) and Paris Agreement (2015).

But given the goals (i.e. 2030 and 2050) set out in the Paris Agreement and the obvious inability of the world to meet those targets, these authors are advocating a more realistic viewpoint about the world's progress to reduce GHG and to manage expectations.

I think this approach, to modify expectations, is largely correct. We keep on urging ourselves and our community to do better. We keep on pushing our local and national politicians to do better. We keep on educating ourselves.

It is rational to be hopeful about the Energy Transition, no matter the modification / reduction of our expectations. We will switch ourselves to mostly using renewables for energy generation and profit-seekers will find a way to invest profitably in the Global South in solar, wind and batteries, at scale. This article is reminding us that the Energy Transition is going to be very difficult to achieve.

But we will achieve the Energy Transition.

History shows that innovation almost always follows sustained human focus and energy on solving specific problems. The financial market signals that governments are sending, which follows public opinion, means that renewables will continue to get more and more focus.

Which means that batteries will, likely soon, follow solar down the Murphy's Law cost curve.

Which then will help the Global South to leapfrog the traditional electricity grid paradigm and move directly into VPP (virtual power plant) and DER (distributed energy resources) arrangements, with AI used to balance out the system.

Likely the old utility system, being a captive source of revenue in the hub-and-spoke layout, will be unnecessary and unworkable in the Global South.

For further reading, one of the authors, Dr. Atul Arya, Ph.D., wrote this article on his company's website dated March 4, 2025 which goes over much of the same issues: "Energy at the crossroads". The summary of this article appears at the beginning:

Highlights

Governments are leading significant changes in energy and climate policies, with some reassessing the pace of the energy transition.  

At its heart, this means reevaluating the ambition to redesign the very foundations of a complex global energy system within the next 25 years.  

Affordable and secure energy for economic growth is being weighed and, in some cases, prioritized over sustainability.  

The new global energy system will not unfold linearly; it will take a multidimensional form. Do not expect it to look like a smooth line on a graph. It will unfold at different rates, with different mixes of energy, in different parts of the world, shaped by different capabilities and priorities.