For years, it was just there. A kitchen staple. Drizzled on toast, poured over tomatoes, deployed with generous Mediterranean confidence. Then drought and heat hit production. Prices surged. Sunflower oil overtook olive oil in Spanish kitchens in the first half of 2024, with Reuters reporting 179 million litres of sunflower oil bought versus 107 million litres of olive oil, after olive oil prices rose sharply on the back of climate-driven production shocks.

That is climate risk in plain clothes.

Not abstract. Not theoretical. Not waiting politely for a board agenda item called “ESG update”. It is on the supermarket shelf. In household budgets. In food manufacturing costs. In procurement conversations. In margins.

And this is where emissions data enters the story.

Once climate risk turns into food inflation, supply disruption, insurance exposure, financing cost, procurement risk, customer churn, employee disengagement, and investor scrutiny, a company’s carbon data stops being decorative. It becomes infrastructure.

Bad data is no longer harmless.
Average data is no longer good enough.
Missing data is not neutral.

It is a risk signal.

In a recent episode of my Resilient Supply Chain podcast, Cynthia Lai made the point bluntly. If a company cannot provide credible emissions figures, banks and insurers may use proxy data or industry averages instead. Those proxies will likely push the company into a higher-risk bucket, increasing borrowing costs and insurance premiums. The market fills in the blanks. Rarely with generosity. 

That should make every board sit up.

Because emissions data is no longer just about reporting. It is about access to capital. Insurance availability. Tender eligibility. Customer trust. Employee recruitment. Retention. Brand credibility. Strategic resilience.

It is about whether an organisation can prove what it says.

The data says…

The emissions problem is mostly hiding outside the walls of the organisation.

According to CDP and Boston Consulting Group’s 2024 analysis, based on 2023 disclosures, corporate supply chain Scope 3 emissions were, on average, 26 times greater than emissions from direct operations.

A quick translation. Scope 1 covers emissions from sources a company directly owns or controls, such as boilers, furnaces, or vehicles. Scope 2 covers purchased electricity, heat, steam, or cooling. Scope 3 covers the rest of the value chain: purchased goods, transport, product use, waste, business travel, investments, and more.

In other words, the messy bit. So, naturally, the important bit.

The same CDP/BCG work found that upstream emissions from manufacturing, retail, and materials alone had a footprint 1.4 times the total CO₂ emitted in the EU in 2022. Yet only 15% of companies disclosing to CDP had set a Scope 3 target.

That is not a data gap.
That is a strategic blindfold.

CDP’s 2024 supply chain report also found that failure to address climate-related risks in supply chains costs nearly three times more than the actions required to mitigate them. It estimated that companies could unlock US$165 billion in potential financial gains from upstream climate-related opportunities.

The World Economic Forum and Boston Consulting Group have previously shown that eight supply chains, including food, construction, fashion, electronics, automotive, fast-moving consumer goods, professional services, and freight, account for more than half of global emissions. They also estimated that decarbonising many end-to-end supply chains would add as little as 1–4% to end-consumer costs in the medium term.

That matters.

For decades, the fossil economy has presented low-carbon transition as uniquely expensive, while quietly offloading the cost of drought, floods, heat, volatility, health damage, conflict exposure, stranded assets, and price shocks onto everyone else. Very tidy accounting, provided one ignores the planet, the balance sheet, and basic decency.

Regulation is catching up too.

In Europe, the Corporate Sustainability Reporting Directive, or CSRD, requires companies in scope to publish sustainability information using common European reporting standards. The first companies had to apply the rules for financial year 2024, with reports published in 2025.

In California, the Climate Corporate Data Accountability Act, known as SB 253, requires US-based companies doing business in California with more than US$1 billion in annual revenue to report Scope 1 and Scope 2 emissions beginning in 2026, and Scope 3 emissions beginning in 2027.

And then there is IFRS S2.

IFRS S2 is the climate disclosure standard issued by the International Sustainability Standards Board. Put simply, it asks companies to disclose climate-related risks and opportunities that could affect cash flows, access to finance, or cost of capital. It became effective for annual reporting periods beginning on or after 1 January 2024.

That last phrase is the one to underline.

Access to finance.
Cost of capital.

Not “nice sustainability story”. Not “PDF garnish”. Money.

The implications…

The first implication is financial.

Financed emissions are the greenhouse gas emissions linked to loans and investments. If a bank lends to a high-emitting company, those emissions become part of the bank’s own climate risk picture. Cynthia Lai explained this clearly on the podcast: banks are no longer looking only at their own operations. They are increasingly looking across their loan books and customer portfolios, adding emissions-related factors into risk assessment and credit scoring. Insurers are doing something similar across insured operations. 

Then there is PCAF, the Partnership for Carbon Accounting Financials. PCAF develops greenhouse gas accounting standards for financial institutions, helping banks, investors, and insurers measure emissions associated with their financial activities. In 2025, PCAF updated its standards, including clearer guidance on financed emissions and insurance-associated emissions.

Insurance-associated emissions are the emissions linked to what insurers cover. That sounds technical until a company finds its insurance renewal becoming more expensive, more conditional, or harder to secure.

As Cynthia put it, if you cannot get your operations insured, getting financing becomes much harder because banks like protection. There’s a sentence that should be stuck beside every procurement dashboard in Europe. 

The second implication is commercial trust.

Customers increasingly want evidence, not slogans. PwC’s 2024 Voice of the Consumer Survey found that consumers said they were willing to pay an average of 9.7% more for sustainably produced or sourced goods, even with cost-of-living pressures.

Now, stated willingness is not the same as actual checkout behaviour. Anyone who has ever watched a procurement process knows the gap between intention and purchase can be wide enough to drive a diesel HGV through.

But the direction is clear. Customers are asking sharper questions. B2B buyers are asking sharper ones again. Weak emissions data makes those conversations harder.

That has a cost.

Customer acquisition is expensive. Losing a tender because your emissions data is vague, unverifiable, or built on lazy averages does not just mean lost revenue. It means higher cost of sales. More time defending claims. More procurement friction. More legal review. More reputational drag. More work to win the next customer.

Retention matters too. Existing customers do not want to carry your climate uncertainty inside their Scope 3 inventory. If you cannot give them credible data, a competitor who can may suddenly look far more attractive.

The third implication is talent.

Deloitte’s sustainability research, reported in 2025, found that 63% of employees surveyed globally did not think their employers were doing enough on climate and sustainability, and 21% had considered changing jobs to work for a more sustainable company.

Again, intention does not always become action. Mortgages exist. Children eat. Careers are complicated.

But employer brand is now part of the climate credibility equation. Skilled people are expensive to recruit. Expensive to replace. Expensive to train. If a company says climate matters but cannot produce credible emissions data, that gap can become a recruitment problem, a retention problem, and eventually a cost problem.

The fourth implication is investor confidence.

EY’s 2024 Global Institutional Investor Survey found that 36% of investors were dissatisfied with company progress on nonfinancial reporting. Investors were especially disappointed in the materiality, comparability, and accuracy of sustainability data.

Accuracy.
Comparability.
Materiality.

These are not soft words. They are capital allocation words.

The strategies…

The first strategy is simple: move from averages to primary data.

In another Resilient Supply Chain conversation, John Beath defined primary data as data from the supplier actually making the product or material, rather than generic database averages or published studies. That means asking basic questions. What are the materials? How much do they weigh? Where did they come from? How were they transported? What energy was used? What waste was generated? What process created them? 

This is not glamorous work. It will not make the keynote reel.

But it is where the truth lives.

The second strategy is to look where the carbon is, not where the optics are.

John gave a striking example of a company that had worked hard to remove styrofoam cups from a huge office site, while a tiny thermostat change would have had vastly greater impact. The point was not that visible actions are useless. The point was that visibility is a terrible proxy for materiality. 

Corporate sustainability has a weakness for symbolic gestures. Cups. Posters. Reusable tote bags. Bamboo cutlery. The theatre is seductive. The carbon often sits elsewhere.

Raw materials. Process heat. Refrigerants. Freight. Product use. Waste. Supplier electricity. Aluminium. Cement. Steel. Plastics. Packaging. Returns. End-of-life treatment.

John also described a solar panel manufacturer that assumed silicon was the main footprint problem, only to discover the aluminium frame was the real hotspot. Switching frame material cut the product footprint in half. 

Measure first. Moralise later. Ideally, much later.

The third strategy is supplier segmentation.

Start with the top 20% of suppliers likely driving 80% of emissions. Use spend data if that is all you have. Use industry averages as a first screen, not the final answer. Build a heat map. Identify hotspots. Engage the critical suppliers. Ask for primary data. Run pilots. Document improvement plans. Bring banks and insurers into the conversation before they bring you into theirs.

Cynthia Lai recommended exactly this pragmatic 80/20 approach, because perfect data delayed for years is just another form of inaction wearing a consultant’s lanyard. 

The fourth strategy is to embed carbon into decision systems.

Procurement. Product design. Enterprise resource planning systems. Supplier onboarding. Freight routing. Contract renewal. Capital approvals. Product lifecycle management. Board dashboards.

Carbon data cannot live in a sustainability side-file, updated annually, with a prayer and a pivot table. It has to show up where decisions are made.

Interestingly, the purchase order may become one of the most important climate tools in the enterprise. Not the glossy sustainability report. Not the annual video with drone footage of trees. The purchase order. If it carries product carbon data, supplier energy mix, recycled content, logistics mode, and assurance status, it becomes a quiet machine for cutting emissions at scale.

The fifth strategy is disciplined use of AI.

AI can help classify supplier risk, detect anomalies, summarise regulation, spot missing data, prioritise supplier engagement, and map emissions hotspots. But it cannot magically convert poor data into truth. Bad data plus AI is still bad data, only now it arrives faster and with more confidence. A marvellous achievement, if the goal was industrialised self-deception.

The signal of change…

Capital is already moving.

The International Energy Agency’s World Energy Investment 2025 report estimated that global energy investment would reach US$3.3 trillion in 2025. Around US$2.2 trillion was set to go to renewables, nuclear, grids, storage, low-emissions fuels, efficiency, and electrification, twice the US$1.1 trillion going to oil, gas, and coal.

That tells us something important. The clean technology transition is not waiting for perfect consensus. It is being driven by economics, energy security, industrial strategy, customer demand, policy, and climate necessity.

Emissions data is becoming the accounting layer beneath that shift.

And the next frontier is already visible: financed emissions, insurance-associated emissions, facilitated emissions, and, very likely, enabled emissions.

Enabled emissions are the emissions made possible by a company’s products, services, technology, or expertise. Think of an AI system, software or cloud platform, consultancy, engineering service, or advertising campaign that helps expand fossil fuel production or high-carbon consumption. The concept is still developing, but the logic is clear. If your business helps others emit more, eventually someone will ask you to account for that.

That question may come first from regulators.

Or investors.

Or customers.

Or employees.

Or insurers.

Or banks.

Or all of them.

Back to the olive oil

A bottle of olive oil does not care about your emissions factor.

It does not care whether your Scope 3 model is elegant, approximate, outsourced, delayed, or trapped in a procurement portal designed by someone who appears to dislike suppliers personally. It responds to heat, rain, soil, water, labour, logistics, energy, and markets.

So does business.

That is the point.

Accurate emissions data is not about pleasing regulators. It is about seeing the system clearly enough to act before the system acts on you.

Customers want credible claims because their own supply chain data depends on yours. Employees and potential employees want evidence because they are deciding where to spend their time, skills, and credibility. Boards want risk clarity. Investors want comparable information. Banks want credit signals. Insurers want exposure data. Policymakers want accountability. Suppliers need direction and support.

The organisations that win will not be the ones with the prettiest averages. They will be the ones with the best primary data, the clearest hotspots, the strongest supplier engagement, and the courage to move capital from carbon-heavy inertia into cleaner, cheaper, more resilient systems.

Measure first.
Then act.
Then prove it.

That is how we cut emissions without cutting through credibility. And it is how supply chains become not just cleaner, but stronger.

For more on this, listen to the full Resilient Supply Chain conversations with Cynthia Lai and John Beath, where we unpack financed emissions, insurance-associated emissions, primary data, lifecycle assessment, and why carbon accounting only matters if it changes real decisions.

Photo credit Esencia Andalusí on Flickr

The post Bad Emissions Data Is Now a Supply Chain Risk appeared first on Tom Raftery.com.

Not taking them. Just knowing they were there.

In drawers. In presses. In Fridges. In kitchen cupboards around the country. Small packets of official anxiety, sent to Irish households in 2002 in case of a major nuclear accident abroad. The Department of Health later confirmed that Ireland was the only country to issue iodine tablets to every household at the time. Nothing says “energy policy” quite like posting thyroid medication to the nation.

I write this as an Irishman, but not as someone living in Ireland. I have lived in Spain since 2008. So this is not a domestic “we should” argument. It is the view of an interested outsider looking in. Irish by birth. Energy analyst by trade. Slightly exasperated observer by long experience.

And now nuclear is back in the Irish conversation.

Recent commentary has argued that, with electricity bills high and renewable delivery lagging, the case for reopening Ireland’s nuclear power debate has never been stronger. It is a fair debate to have. Energy costs are painful. Grid constraints are real. Data-centre demand is politically and technically unavoidable. Ireland needs clean power, security, affordability, and resilience.

But reopening a debate is not the same as reaching the right conclusion.

And in the Irish context, domestic nuclear power still makes very little sense.

Ireland’s grid is the wrong shape for nuclear

The strongest argument against nuclear in Ireland is not peak demand.

It is minimum demand.

EirGrid’s 2024 All-Island Transmission System Performance Report recorded a winter peak of 7,148 MW on 27 November 2024. That is the number nuclear advocates tend to point at. Big number. Serious face. Possibly a chart with a dramatic arrow.

But the more important number is the minimum summer night valley. In 2024, that was just 3,095 MW, recorded at 05:41 on 9 June. In 2020, it was even lower: 2,395 MW. That is the actual grid a nuclear plant would have to fit into. Not the political fantasy grid. The real one.

A conventional 1 GW reactor would represent roughly one-third of that low-demand period. Even smaller units would still be chunky in a small island system. Yes, nuclear plants can technically load-follow. But technical possibility is not the same as economic sense.

Nuclear economics depend on high utilisation. Build an expensive asset, then run it flat out for decades. That is the model. Turn it down because demand is low or wind is strong, and the capital cost does not politely disappear. It just gets spread over fewer megawatt-hours.

Ireland’s electricity challenge is not a lack of theoretical baseload.

It is flexibility.

Peaks. Troughs. Ramps. Wind surges. Wind lulls. Solar midday output. Evening demand. Interconnector flows. Battery cycles. Demand response. Dispatchable backup.

A large nuclear unit is not naturally suited to that system.

It is a fridge magnet in a clock mechanism.

The outage problem does not go away

There is another awkward question nuclear advocates need to answer.

What happens when the plant goes offline?

Nuclear reactors require planned outages for refuelling and maintenance. The US Energy Information Administration says nuclear plants typically refuel every 18 to 24 months, and that outages are usually longer than the refuelling itself because maintenance, upgrades, and repairs are carried out at the same time.

So if Ireland had a 1 GW reactor, the system would still need enough dispatchable capacity, storage, demand flexibility, and interconnection to cover the loss of that reactor when it was unavailable.

That is not a footnote.

That is the system cost.

In a large continental grid, losing a gigawatt is inconvenient. In a small island system, it is a major event. Nuclear does not remove the need for backup. It creates a large single contingency that the rest of the system must be built around.

So the real question is not simply: can nuclear supply clean power?

It is: can Ireland justify building a nuclear plant and then also building the parallel system needed for the days or weeks when that plant is offline?

Because that is what reliability requires.

Physics, tragically, does not care about op-eds.

The cost and timeline comparison is brutal

New nuclear is slow.

Really slow.

Hinkley Point C in the UK was once expected much earlier and is now delayed into the 2030s, with EDF’s 2024 update putting expected cost at up to £35bn in 2015 prices. That is before translating the lesson into Irish political, regulatory, and planning conditions, where optimism often goes to be mugged by a judicial review.

Lazard’s 2025 Levelized Cost of Energy analysis puts new nuclear in the US at roughly $141–220/MWh. Utility-scale solar sits around $38–78/MWh, onshore wind around $37–86/MWh, utility solar plus storage around $50–131/MWh, and onshore wind plus storage around $44–123/MWh. These are not Ireland-specific project bids, but they are a useful benchmark from a widely cited financial analysis.

Now add time.

A nuclear plant in a country with no civil nuclear generation sector, no domestic nuclear regulator, no supply chain, no operating skills base, no waste pathway, and no site would not be a 2030 solution. It would be a 2040s bet, at best.

By contrast, solar, wind, storage, interconnection, demand response, and grid upgrades can be delivered in increments. Utility-scale solar can often be built in 6–12 months once consented and grid-connected. Battery projects are modular and can also be delivered far faster than nuclear. Onshore wind is slower, especially through planning and grid connection, but the construction phase is typically measured in months to a couple of years, not decades.

So the practical comparison is not nuclear versus candles.

It is nuclear versus portfolios: solar, wind, storage, interconnection, demand response, grid reinforcement, flexible backup, and smarter large-load management.

That portfolio can learn. It can adapt. It can fail partially without bankrupting the national strategy.

Nuclear is more binary.

And more expensive when it goes wrong.

Data centres could help, if they behave like grid assets

Ireland’s data-centre electricity demand is astonishing. The Central Statistics Office reported that data centres consumed 22% of metered electricity in 2024, up from 5% in 2015. Consumption rose from 6,335 GWh in 2023 to 6,969 GWh in 2024.

But the data-centre debate is too often framed lazily.

Data centres are not automatically villains. I say that as a former developer of an Irish data centre, CIX.ie, in Cork. The issue is not whether data centres exist. They do. They are part of modern digital infrastructure. The issue is whether they behave like passive loads or active grid assets.

A data centre that demands power 24/7, ignores grid stress, and points to corporate PPAs as a moral fig leaf is part of the problem.

A data centre that can shift load, reduce demand when requested, support local constraints, co-locate with renewables, contract storage, provide flexibility, and participate properly in demand-side response can be part of the solution.

Ireland’s Large Energy Users policy is at least moving in that direction. The CRU’s 2025 decision assumes data centres procuring renewable energy equivalent to 80% of annual demand in its illustrative analysis, and the broader policy direction is clear: large loads need to contribute to the system, not simply lean on it.

That is the right framing.

Not “ban data centres”.

Not “build nuclear for data centres”.

But: if large loads want grid capacity, they should help the grid.

That is not anti-business. It is basic engineering discipline.

The SMR objection is coming. It is weak.

Someone will now mention small modular reactors.

They always do.

SMRs are the favoured escape hatch in modern nuclear debates because they sound like nuclear without the inconvenient bits: smaller, repeatable, factory-built, safer, cheaper, faster. A reactor you can order like a prefab kitchen, presumably with a tasteful backsplash and a twenty-year licensing process.

The problem is that commercial SMRs are still unproven.

The IEA says global nuclear capacity stayed flat in 2025: 3 GW of new nuclear came online, but that was offset by 3 GW of retirements, leaving global nuclear capacity at 420 GW. Construction started on 12.2 GW of nuclear in 2025, mostly in China and Russia. Interesting, yes. A bankable Irish electricity strategy? No.

Ireland would still need legislation, regulation, siting, emergency planning, waste management, security, skills, finance, and public consent. The “small” in SMR refers to reactor size. It does not magically shrink institutional complexity.

At this point, building Irish energy policy around SMRs is not pragmatism. It is delay when urgency is what is required.

Ireland might as well wait for other myths like fusion, cheap green hydrogen, or unicorn farts with grid-forming inverter capability.

The politics are as hard as the engineering

Ireland has a legal barrier too. The Electricity Regulation Act 1999 states that authorisation criteria “shall not provide for the use of nuclear fission for the generation of electricity.” Changing that is possible. But changing the law would be step one of about fifty.

Ireland would then need institutions.

A regulator. A waste policy. A decommissioning framework. Emergency planning. Site selection. Security. Public consultation. Finance. Skills. Long-term political consensus.

And then there is social licence.

Chernobyl is not ancient history for Irish people of a certain age. Sellafield is not abstract. The EPA says low levels of artificial radioactivity can still be detected in sediments, seawater, seaweeds, fish, and shellfish from the Irish Sea, although discharges have fallen significantly since their peak in the 1970s and 1980s.

Technically, that does not prove Ireland should never consider nuclear.

Politically, it matters enormously.

Infrastructure does not get built in an Excel file. It gets built in places. Near people. Through planning systems. Under scrutiny. With memories attached.

Ireland already struggles to build enough homes, grid lines, wind farms, water infrastructure, and transport projects. A nuclear site would not simply face NIMBYism. It would face national-scale resistance with historical depth.

Ignoring that would not be brave.

It would be naïve.

The better Irish strategy is already visible

The stronger Irish pathway is not mysterious.

Build the grid. Faster. More lines. More substations. More digital control. More connection capacity. More political honesty about the infrastructure required for electrification.

Accelerate renewables already in the pipeline. Ireland reached 8 GW of renewable electricity connected to the network in March 2026, according to ESB Networks and the Department of Climate, Energy and the Environment. That is not enough, but it is a real platform to build from.

Treat storage as core infrastructure. Batteries for short duration. Longer-duration storage for multi-hour and multi-day balancing. Thermal storage. Pumped hydro where feasible. Flexible demand. Clean dispatchable backup for rare events.

Use interconnection intelligently. Ireland does not need to own every generation technology domestically to benefit from system diversity. Interconnection with France gives access to a broader European electricity mix, including French nuclear, without Ireland taking on domestic nuclear siting, waste, construction, and political risk.

And make large loads earn their place. Data centres, hydrogen electrolysers, industrial heat, EV fleets, and other flexible demand should become grid partners, not just grid customers.

This is not anti-nuclear ideology.

It is pro-system realism.

The world is voting with deployment

Globally, the transition is moving.

Ember’s Global Electricity Review 2026 found that clean electricity sources grew fast enough to meet all new global electricity demand in 2025, preventing an increase in fossil generation. Solar alone met 75% of the net increase in electricity demand, while solar and wind together met almost all of it.

Capacity additions tell the same story. IRENA’s Renewable Capacity Statistics 2026 reported that renewable power capacity increased by 692 GW in 2025, including 511 GW of solar and 159 GW of wind.

One set of technologies is scaling by the hundreds of gigawatts per year.

Nuclear is fighting to add single digits net.

That does not mean nuclear is useless globally. It does mean it is a strange place for Ireland to put scarce political, financial, regulatory, and planning capacity.

Ireland’s energy problem is urgent. High prices hurt households. High prices hurt businesses. Fossil fuel exposure hurts energy security, and resilience. Slow grid buildout hurts everything. But urgency is not an excuse to choose the slowest available tool.

Nuclear in Ireland sounds serious because it is large, expensive, centralised, and wrapped in engineering mystique.

But seriousness is not measured in concrete volume.

It is measured in fit.

And domestic nuclear does not fit Ireland’s grid, demand shape, political history, planning reality, delivery timeline, outage risk, or near-term climate needs.

Back to those iodine tablets.

They were a symbol of fear. But also a reminder that energy choices carry long shadows. Ireland has enough experience with imported risk, fossil volatility, and infrastructure delay to know better than to chase a technology whose best-case timeline belongs to the 2040s.

The better future is already visible.

Wind. Solar. Storage. Interconnection. Flexible demand. Smarter data centres. Electrified heat and transport. A stronger grid. More local generation. Less exposure to imported fuels.

Ireland does not need nuclear to be serious about energy.

It needs to build the clean, flexible, resilient electricity system that actually matches the island it is.

Urgently.

And with a little less faith in magic reactors.

Photo credit IAEA Imagebank

The post Ireland’s Nuclear Power Debate Has a Grid Problem appeared first on Tom Raftery.com.

A conflict thousands of kilometres away. Tankers delayed. Insurance costs rising. Traders getting jumpy. And suddenly that ripples into household bills, freight costs, food prices, and boardroom planning across Europe and far beyond. That is the basic indignity of fossil fuel dependence. It hands immense power to events you cannot control, in places you do not govern, through systems you did not design.

That is the real lesson from the US-Israel war on Iran.

Reuters reported that IEA Executive Director Fatih Birol believes it could take around two years overall to restore the energy output lost in the Middle East conflict, while warning that markets may be underestimating the consequences of a prolonged closure of the Strait of Hormuz. In the UK, Ed Miliband’s response has not been to pretend that more North Sea drilling will somehow magic away global price volatility, but to argue for faster solar deployment, stronger EV uptake, and reforms to reduce the grip of gas on electricity prices. That is not ideological theatre. It is the beginning of a more realistic security doctrine. 

The important point, though, is this: the war did not create the clean energy transition. Solar was already scaling. EVs were already getting cheaper. Batteries were already moving down the cost curve. Electrification was already spreading into buildings, transport and industry. What the war has done is expose, once again, how brittle the fossil system remains, and why the alternatives now look less like moral preference and more like strategic common sense. 

The data says…

The IEA’s Global Energy Review 2026  released this morning, is striking for what it confirms and for what it does not say. Global energy demand rose by 1.3% in 2025, slower than in 2024. Electricity demand, however, grew by around 3%, more than twice as fast. Solar PV was the single biggest contributor to the increase in global energy demand, accounting for more than 25% of the growth, the first time a modern renewable source has led global energy demand growth. Low-emissions sources together accounted for nearly 60% of demand growth. That is not a symbolic shift. That is system-level movement. 

On the power side, the numbers are stronger still. Renewables and nuclear together added more generation than the entire increase in global electricity supply in 2025. Solar alone posted a record 600 TWh increase in generation, the largest annual increase ever recorded for any source outside post-crisis rebound periods. Renewable capacity additions hit 800 GW, while battery storage additions reached 108 GW, up 40% year on year. The direction of travel is unmistakable. But so is the caveat: fossil fuels still generated 57% of global electricity in 2025, with coal alone still the largest single source at 34%. This is acceleration, not completion. 

Electric vehicles are following a similar arc. The IEA says electric car sales rose more than 20% in 2025 to 21 million vehicles, meaning roughly one in four new cars sold globally was electric. Its Global EV Outlook 2025 also found that first-quarter 2025 sales were up 35% year on year, with China projected to reach around 60% EV share of new car sales in 2025. In Europe, Reuters reported that BEV sales in the main markets surged 29.4% in the first quarter of 2026, helped by rising petrol prices after the war on Iran. That matters because it shows two forces working together: a structural cost and technology shift, and a geopolitical shock that makes oil dependence look even less attractive. 

The affordability story is becoming harder to ignore. In the UK, Autotrader says new EVs are now cheaper to buy than petrol cars on average for the first time, at £42,620 versus £43,405, based on advertised prices after discounts and grants. That qualifier matters. This is not universal unsubsidised parity across every model and market. But it is still a meaningful milestone, particularly when paired with rising consumer interest. Autotrader says visits to its new-car platform were up 21% year on year in April. SMMT adds that March 2026 was the best month ever for UK BEV registrations, at 86,120. That is not a fringe market behaving politely. That is scale starting to show up in registration data. 

The heavy-duty side of transport is also beginning to move, though this is where precision matters. Electrive reported that new energy heavy-duty trucks in China reached 54% of monthly new heavy-duty truck sales in December 2025, and 29% across the full year. But its source uses China’s NEV classification, which includes fully electric and certain plug-in drivetrains, and the article itself notes that subsidy phase-outs and anticipated tax changes distorted year-end buying. So this is not evidence that diesel is finished in trucking. It is evidence that even the difficult segments are starting to electrify faster than many assumed, once economics and policy begin to align. 

The emissions story remains uncomfortable. Global energy-related CO2 emissions rose by around 0.4% in 2025 to a record 38.4 Gt. That is the part nobody serious should duck. Emissions did not fall globally. But growth slowed again, China’s emissions fell by around 0.5%, India’s were essentially flat, and the IEA estimates that clean technologies deployed since 2019 avoided around 3 Gt of CO2 in 2025 alone. So the more defensible conclusion is not “we’ve peaked”. It is that clean deployment is now materially suppressing fossil fuel demand and slowing emissions growth, and in several major markets the peak is either near or already behind them. 

The implications…

First, climate. The climate case remains brutal in its simplicity: the transition is happening, but not yet fast enough. Record solar growth is good. Record EV sales are good. Slower emissions growth is better than faster emissions growth. None of that changes the fact that 38.4 Gt is still 38.4 Gt. A critic is right to insist on that. But there is a difference between realism and fatalism. Realism says the transition must accelerate. Fatalism says the current progress does not matter because it is incomplete. That second argument is analytically lazy and politically dangerous. 

Second, security. Fossil fuel security has always been overstated because it confuses access with sovereignty. If your country imports fuels priced on global markets and shipped through chokepoints vulnerable to war, blockade, sabotage or insurance shocks, you are exposed. Domestic clean power is not invulnerable, but it is much harder to embargo the wind, sanction the sun, or panic a battery with a tanker incident. That is why Miliband’s line about “clean energy security” resonates. It is not perfect. It is directionally right. 

Third, affordability. IRENA reports that 91% of newly commissioned utility-scale renewable projects in 2024 delivered lower-cost electricity than the cheapest new fossil-fuel alternative, and that renewables avoided USD 467 billion in fossil fuel costs that year. BloombergNEF says average lithium-ion battery pack prices fell to USD 108 per kWh in 2025, while stationary storage pack prices fell to USD 70 per kWh. This does not mean every clean technology is cheap in every context. It does mean the cost trend is not moving in fossil fuels’ favour. And when wars shove oil and gas prices upwards, that advantage becomes more obvious, faster. 

Fourth, resilience. This is where the critique bites hardest, and where leaders need to pay attention. Electrification is not a magic wand. It only works at scale with stronger grids, faster permitting, more storage, more flexible demand, better interconnection and more serious planning. The IEA’s Energy and AI work says data centres are set to account for nearly half of US electricity demand growth to 2030. Add EVs, heat pumps and industrial electrification, and the message is plain: the prize is huge, but the engineering challenge is real. The answer is not to retreat. It is to build the system that this new load profile requires. 

The strategies…

For business leaders, the first strategy is to stop treating electrification as a CSR line item. It is a risk-management play. Fleets that electrify reduce exposure to oil-price swings. Buildings that shift to heat pumps and on-site solar reduce exposure to gas shocks. Companies that sign long-term clean power contracts are not merely polishing their brand. They are buying more predictable energy economics in a disorderly world. 

For policymakers, the priority is system design, not slogan inflation. Faster grid build-out. Planning reform. Transmission investment. Storage support. Market rules that reward flexibility. Tariff structures that make electrification cheaper to use, not just cleaner to discuss. If governments want households and businesses to switch, the economics must be visible and the infrastructure must be there. Otherwise, the transition gets stuck between aspiration and irritation, which is where a lot of good ideas go to die. 

For industry, the second strategy is to be honest about supply chains. Clean tech reduces one kind of dependency, but it can increase another if countries fail to diversify manufacturing, processing and grid equipment supply. So yes, push harder on domestic renewables, EVs, batteries and electrified industry. But also push on local and allied-country manufacturing, transformer supply, recycling, grid equipment, permitting capacity, and workforce development. Resilience means not swapping one bottleneck for another with a congratulatory press release attached. 

The signal of change…

The best evidence that something deeper is shifting is not rhetoric. It is investment and behaviour.

The IEA’s World Energy Investment 2025 says global energy investment is set to reach USD 3.3 trillion in 2025, with USD 2.2 trillion going to clean energy technologies and infrastructure, twice the USD 1.1 trillion going to fossil fuels. Consumers are moving too. The Guardian reports that Octopus has seen a 50% rise in solar sales and a 50% rise in heat pump sales since the latest Middle East conflict began, while March was the best month ever for EV sales in the UK. Again, that war did not create these trends. But it has made the old system’s weaknesses visible in a way that no white paper ever could. 

That brings me back to the fuel-price board. To the family budget. To the logistics operator. To the minister trying to explain why violence abroad still whips through bills at home.

We should not have needed this many warnings. We should have moved earlier and faster. But the clean energy transition is no longer resting on climate ethics alone. It is now being pulled forward by the hard logic of security, affordability and resilience as well. That does not make the current moment good. It makes it clarifying.

So the strongest version of the argument is not that the war on Iran is somehow good news for energy. It plainly is not. It is that every fossil fuel shock now makes the case for electrification harder to evade. Solar is booming. EVs are scaling. Batteries are getting cheaper. Investment is shifting. Emissions are still too high, but the forces that can bend them down are becoming bigger, cheaper and more strategic with every passing year.

That is not victory. But it is movement. Real movement. Movement in the right direction. And in energy, that matters.

The post Oil Shocks Make Electrification a Business Imperative appeared first on Tom Raftery.com.

That matters more now than it did even a few years ago.

Heat is intensifying. Cooling demand is rising. Electricity systems are under more pressure. Data centres are expanding. And the war on Iran, alongside the disruption around the Strait of Hormuz, has reminded everyone that energy costs are still exposed to geopolitical shocks. Reuters reported this week that despite a fragile ceasefire, oil flows through Hormuz remained constrained, with Brent rebounding to around $98 a barrel and major supply disruption still in play. 

That does not mean every building owner sees a straight line from Brent to their electricity bill. Markets are more complicated than that. But it does mean volatility is back in the foreground. Fuel insecurity, inflation pressure, grid stress, and energy cost uncertainty all rise together.

Which is why passive cooling deserves far more attention than it gets.

Not as a miracle cure.
Not as a substitute for all mechanical cooling.
But as one of the most practical, underused ways to cut cooling loads, reduce emissions, improve resilience, and protect operating margins.

The data says the cooling problem is getting bigger

The International Energy Agency has been warning for years that cooling is becoming one of the defining energy challenges of this century. In The Future of Cooling, the IEA said that without stronger efficiency action, energy demand for space cooling will more than triple by 2050. It also described cooling as the fastest-growing use of energy in buildings. 

That trend has not gone away. It is accelerating.

The IEA’s 2026 electricity outlook says global electricity demand is set to grow strongly through 2030, driven by industrial electrification, electric vehicles, higher air-conditioning use, and the expansion of data centres and AI. Its 2025 Energy and AI analysis adds more texture: data centres account for around one-tenth of global electricity demand growth to 2030, but air conditioning in homes and offices contributes an even larger share. 

That is the first key point. Data centres matter. AI matters. But ordinary cooling demand is still enormous, and still under-discussed.

The climate backdrop is equally clear. The WMO says Europe is the fastest-warming continent, and 2024 was Europe’s warmest year on record. The WHO says heat causes around 489,000 deaths globally each year, with 36% of those in Europe, and estimates that Europe saw 61,672 heat-related excess deaths in the summer of 2022 alone. 

Heat is not a comfort issue with a sustainability footnote. It is already a public-health, labour-productivity, infrastructure, and energy-system issue.

Urban form makes it worse. A 2023 Nature Communications paper found that urban heat island effects in European cities are associated with economic impacts averaging about €192 per adult urban inhabitant per year. Higher temperatures do not just make cities uncomfortable. They also correlate with increased same-day respiratory hospitalisations.

The physical logic is straightforward. Buildings, roads, and hard surfaces absorb heat. Dark roofs absorb more. Poor envelopes admit more. Bad urban design traps more. Then we spend money moving that heat around mechanically.

The implications are bigger than “lower bills”

The obvious implication is affordability. If a building gains less heat, it needs less active cooling. That can cut energy use, reduce peak demand charges, and sometimes defer or shrink HVAC investment. In warehouses and large commercial buildings, that matters a lot because cooling loads are often highly coincident with expensive peak periods.

But the stronger argument is not just cost. It is exposure.

Passive cooling reduces exposure on four fronts at once.

Heat.
Less solar gain means lower indoor temperatures, fewer hotspots, and, in some settings, better worker comfort and productivity. This is especially important in settings where heat directly affects health, comfort, and productivity, from warehouses to schools, hospitals, and lower-income housing. 

Energy price volatility.
Again, not because oil prices directly set every cooling bill, but because lower cooling demand means lower dependence on volatile energy inputs overall. In stressed systems, demand reduction is often the cheapest hedge.

Grid stress and outages.
A passive measure keeps doing its job when nothing mechanical is running. That is valuable during heatwaves, curtailments, equipment failures, or outage events.

Emissions.
Even as grids decarbonise, wasted electricity is still waste. IRENA reported that 91% of newly commissioned utility-scale renewable capacity in 2024 produced electricity more cheaply than the cheapest fossil alternative. That is excellent news. But cheap clean electricity is not an excuse to ignore inefficient building envelopes. It is a reason to pair better supply with smarter demand. 

And passive cooling is one of those rare climate measures that helps whether your motivation is cost, comfort, resilience, or emissions. Usually policy fights begin because people only agree on one of those. Here, the overlap is the point.

But passive cooling is not one thing, and that matters

Passive cooling is not a single technology. It is a family of strategies: reflective roofs, radiative coatings, shading, insulation, thermal mass, natural ventilation, envelope sealing, landscaping, green roofs, and more. They do not perform equally everywhere.

A reflective roof may be a superb retrofit in Seville, Phoenix, or parts of India. It may have a weaker case in a much cooler climate where winter heating penalties matter more. Natural ventilation can help in some conditions but can be ineffective in hot, humid climates. Green roofs can reduce heat but may increase water demand and humidity, which is awkward in arid regions where water scarcity is already the problem.

That does not weaken the case for passive cooling. It makes the case more credible.

The right question is not, “Does passive cooling work?”
The right question is, “Which passive cooling measures make sense for this asset, in this climate, with this load profile, under this tariff structure?”

Serious operators should insist on that level of specificity.

Where passive cooling fits best

The strongest use case for passive cooling is not where active cooling disappears. It is where active cooling becomes smaller, cheaper, and easier to run.

Warehouses are an obvious example. Large roof areas. Big solar exposure. Often uneven occupancy. Often poor thermal performance.

Data centres are more nuanced. No serious person is proposing that a reflective roof replaces precision cooling for high-density compute. But that is not the point. Roof reflectivity, insulation, airtightness, thermal-bridge reduction, and envelope analytics can reduce external heat gain and therefore reduce the burden on mechanical cooling systems. 

That matters more as compute demand rises. The IEA’s AI work suggests data-centre load growth is material to electricity demand growth through 2030. So shaving cooling demand at the envelope level is not glamorous, but it is rational.

Hospitals, schools, airports, logistics facilities, social housing, and rail infrastructure also deserve more attention here. The common thread is simple: where heat gain is significant, occupancy matters, and cooling costs are meaningful, passive measures deserve a place in the stack.

What leaders should do next

First, stop treating cooling purely as an HVAC discussion.
Make it a demand-reduction and resilience discussion. Ask where heat is entering the asset before asking which bigger machine to buy.

Second, audit the building envelope.
Roofs, walls, glazing, insulation, air leakage, shading, and thermal bridges are not sexy, which in corporate terms usually means they are ignored until they get expensive.

Third, prioritise low-disruption retrofits.
Reflective roofs and coatings, shading, sealing, and selective insulation upgrades can often be implemented faster and with less operational disruption than deep structural interventions. That is especially relevant when capex is tight.

Fourth, model asset-specific economics.
The business case depends on climate, energy prices, operating hours, roof condition, existing HVAC performance, and whether the organisation owns the asset long enough to capture the savings. The payback may be compelling. It may also be mediocre. Better to know.

Fifth, treat passive and active cooling as complements.
The smartest cooling strategy is layered: reduce heat gain first, then optimise active systems, then align both with cleaner power and smart controls.

Sixth, connect cooling to urban and policy strategy.
Cities are starting to respond more explicitly. One sign of that is the emergence of Chief Heat Officers in places like Miami-Dade, Los Angeles, Phoenix, Athens, and Freetown. Whether or not that exact governance model spreads everywhere, the broader signal is clear: heat is becoming a planning issue, a public-health issue, and a policy issue, not just a private facilities issue.

The signal of change is not hype. It is convergence.

What is changing is not the physics. White and reflective surfaces have been used for centuries. Buildings have always had envelopes. Shade has always existed. Humans are late to many obvious ideas, usually because quarterly reporting gets in the way.

What is changing is the context around them.

Heat is worsening.
Cooling demand is rising.
Electricity demand is growing faster.
Energy volatility is back.
Data-centre expansion is real.
And business leaders are finally being forced to think about adaptation and operating resilience in the same breath as decarbonisation.

That is why passive cooling is moving up the agenda.

Not because it is trendy.
Because the alternatives are increasingly expensive, exposed, and brittle.

Back to that warehouse roof in the evening heat. The point is not that passive cooling solves everything. It does not. The point is that too many organisations are still trying to solve a heat-gain problem with an equipment-only mindset. They are treating the symptom while leaving the cause sitting there in full sun.

That is starting to look less like normal practice and more like outdated thinking.

Passive cooling will not replace chillers, precision cooling, or smart active systems. It should not. But it can reduce how hard they work, how much energy they use, how vulnerable they are to price spikes and grid stress, and how much carbon they drag behind them.

That is not niche.
That is operational intelligence.

And in a hotter, more electrified, more volatile world, operational intelligence is going to matter a lot more than yet another glossy net-zero slide.

Passive cooling sits at the intersection of climate, affordability, resilience, and energy security, which is precisely why it deserves more strategic attention than it gets.

If you want to go deeper into the commercial reality behind this, including why sustainability alone rarely sellsy and why ROI still decides adoption, listen to my full conversation with Rob Atkin on the Climate Confident podcast. The most useful climate solutions are often the least theatrical. Passive cooling is one of them. 

Photo credit richard gadget on Flickr

The post Why Passive Cooling Matters More in a Hotter, More Volatile World appeared first on Tom Raftery.com.

It shows up when diesel spikes and haulage costs creep into food prices. It shows up when a factory’s energy budget gets blown apart by events on the far side of the planet. It shows up when governments start muttering about emergency reserves, rationing, and support packages, as if this were all some freak accident rather than the predictable consequence of tying modern economies to volatile fuels moving through fragile chokepoints.

That is the hook. That is the human story. And that is why this matters now.

We still talk about fossil fuels far too often as if they are the safe, grown-up option. The dependable one. The pragmatic one. But that framing is wearing thin. Rapidly. Because the more you look at the data, the more obvious the contradiction becomes: fossil fuels are not just a climate problem. They are an economic liability, a geopolitical vulnerability, and a standing source of instability.

That does not mean renewables solve everything by magic. They don’t. You do not get resilience by scattering a few solar panels about and declaring victory. You need grids, storage, transmission, flexibility, demand response, digital controls, planning reform, and faster permitting. Real systems work is required. Serious work. But those are infrastructure problems. Build problems. Investment problems. Policy problems. They are difficult, yes. They are also solvable.

Fossil fuel dependence is different. It keeps reintroducing the same exposure, over and over again.

And that is the argument at the centre of my latest Climate Confident bonus episode: fossil fuels are instability in a bottle, while electrification, clean power, storage and stronger grids are increasingly the path to something better. Cleaner, obviously. But also steadier. Cheaper. More sovereign. More resilient.

The data says…

Start with power.

According to the IEA’s Electricity Mid-Year Update 2025, renewable generation overtook coal globally in 2025, with coal’s share of total generation dropping below one-third for the first time in a century. Solar PV and wind are central to that shift, with their combined share of global electricity generation rising from 15% in 2024 to 17% in 2025 and nearly 20% by 2026. 

That is not a niche trend. That is system-level change.

And the cost story is just as stark. IRENA’s Renewable Power Generation Costs in 2024, published in July 2025, found that 91% of newly commissioned utility-scale renewable capacity delivered electricity at a lower cost than the cheapest new fossil-fuel alternative. Solar PV was, on average, 41% cheaper than the lowest-cost fossil alternative, while onshore wind was 53% cheaper. IRENA also estimates that renewables avoided USD 467 billion in fossil-fuel costs in 2024 alone. 

Read that again. Avoided. USD 467 billion.

This is no longer mainly a moral case waiting for an economic case to catch up. In much of the system, the economics have already moved.

Now layer in what recent shocks are revealing. Reuters reported this week that record wind and solar generation in Great Britain in March 2026 avoided the need for gas imports worth £1 billion in a single month. Wind and solar produced 11 terawatt-hours of electricity, displacing the equivalent of 21 terawatt-hours of gas imports. Gas-fired generation fell 25% year on year to the lowest March level on record. 

That is not symbolism. It is not green branding. It is not corporate mood music. It is hard cash. Less fuel bought. Less exposure carried. Less money burned.

The transport story points the same way. The IEA’s Global EV Outlook 2025 says the global EV fleet, excluding two- and three-wheelers, is on track to reach 250 million vehicles by 2030 under stated policies, roughly four times the level at the end of 2024. 

That matters because electrification of transport is no longer just about tailpipe emissions. It is about reducing exposure to oil volatility. The more transport runs on domestically produced electricity rather than imported petroleum, the less damage each geopolitical shock can do.

The funniest part, in a bleak sort of way, is that some of the strongest recent arguments for clean technology have not come from climate campaigners at all. They’ve come from energy markets. Prices have started doing the persuasion.

The implications…

This is where the conversation has to get more honest.

For years, much of the public debate has framed the energy transition as a trade-off between climate virtue and economic realism. That frame is collapsing. What we are increasingly looking at is a trade-off between recurring fuel exposure and owned infrastructure.

A fossil-fuel system has to be fed constantly. Every barrel. Every cargo. Every shipment. Every pipeline flow. It depends on continuous extraction, continuous transport, continuous pricing power somewhere else in the system, and continuous luck. Luck that a war does not spread. Luck that a chokepoint does not tighten. Luck that a cartel does not squeeze. Luck that traders do not panic. Luck that your currency can absorb the hit.

That is not resilience. That is a business model built on recurrent external risk.

And when the shocks hit, they do not stay politely contained within energy markets. They leak outward. Into inflation. Into industrial competitiveness. Into food and fertiliser. Into logistics. Into public budgets. Into election cycles. Into popular anger.

This is one reason the affordability case for renewables and electrification is now inseparable from the security case. Energy security used to be discussed as a matter of securing fuel supplies. Increasingly, the smarter interpretation is reducing the need for volatile fuel supplies in the first place.

That is a profound shift.

It is also why domestic renewable capacity, electrification, storage and demand flexibility matter so much for countries that import large shares of their energy. They are not just emissions tools. They are exposure-reduction tools.

This is especially relevant for Europe and Asia, where imported fossil dependence remains high and price shocks travel fast. The same Reuters report notes that record wind output helped shield the UK from the worst effects of the current Middle East conflict, with wind accounting for around 42% of total power generation and helping limit exposure to surging gas prices. 

Again, the point is not that Britain is finished. It clearly isn’t. The point is that even partial progress changes the shape of the risk.

That is what too many critics still miss. The clean-energy transition does not eliminate dependency altogether. It shifts it. Yes, batteries, transformers, grid equipment, power electronics, and critical minerals all matter. Manufacturing concentration matters. Trade policy matters. Industrial strategy matters. But that dependency is more front-loaded. You build assets. Then you own them. They keep producing value for years, sometimes decades.

A solar panel does not send you a monthly invoice for sunlight. A wind turbine does not care if a tanker corridor is tense this week. A battery does not suddenly triple its fuel bill because someone in a suit decided brinkmanship was good politics.

That distinction matters. A lot.

The strategies…

So what should leaders do with this?

If you are a business leader, stop treating the energy transition as a reporting exercise. It is not something to be delegated neatly to the sustainability team while treasury, procurement, operations and strategy carry on as before. That split is no longer defensible.

The questions are practical now.

Can you lock in clean electricity through a power purchase agreement?
Can you add onsite solar where it makes sense?
Can you deploy storage?
Can you electrify fleet vehicles?
Can you reduce exposure to oil- and gas-linked volatility across the supply chain?
Can you move heating loads to heat pumps or other electrified solutions where feasible?
Can you build demand flexibility into operations, so your organisation becomes less exposed to peak-price events?

Those are not fringe climate questions. They are operational questions. Margin questions. Risk questions.

If you are a policymaker, the answer is not more speeches. It is more delivery.

Permitting reform.
Transmission build-out.
Grid modernisation.
Storage deployment.
EV charging.
Heat pump incentives.
Smarter market design.
Interconnection.
Faster planning cycles.

This is not glamorous, but it is the work. The transition will not be won by rhetoric. It will be won by boring, high-impact infrastructure decisions made faster and better.

And there is a strong signal from the market that this is where things are heading anyway. Reuters reported that global renewable capacity rose to 49.4% of global electricity capacity in 2025, up from 46.3% in 2024, driven above all by solar. 

That figure is worth dwelling on. Nearly half.

Not perfect. Not sufficient yet. But very far from marginal.

The signal of change…

There is one phrase I keep coming back to: pump anxiety.

For years, critics of EVs obsessively pushed range anxiety. And yes, range matters. Charging networks matter. Vehicle affordability matters. But whenever petrol prices jump, the discussion changes. Quickly. Because people are reminded that the old system is not normal. It is just familiar. And familiarity has a remarkable ability to disguise fragility.

That is the wider signal here.

The transition is no longer only being pushed by climate urgency, though climate urgency remains immense. It is being pulled by economics, by engineering, by geopolitics, and by basic common sense. Countries want more control. Businesses want more predictability. Households want lower running costs. Insurers want fewer shocks. Banks want steadier cash flows. Grid operators want flexibility. Industry wants stability.

Clean electricity, storage and electrification do not solve every problem overnight. Aviation, shipping, high-temperature industry and fertilisers still present hard challenges. But that is not an argument for delay where solutions are already available. It is an argument to move faster where the path is clear, so the harder sectors are left carrying a smaller burden later.

That is the deeper lesson.

Not that the transition is easy. It isn’t.
Not that the politics are tidy. They aren’t.
Not that the build-out happens by itself. It won’t.

But that the alternative, continued dependence on volatile imported fossil fuels, is not realism. It is recurring exposure dressed up as prudence.

And so we come back to the opening point. The bill arrives long before the invoice does. It lands in boardrooms, on household budgets, in national accounts, and in political systems already under strain.

The good news is that we are no longer short of alternatives. We are short of speed, coordination, and nerve.

That can change.

And it needs to.

If you want the fuller argument, and the sharper version of why I think fossil fuels are instability in a bottle (or maybe in a barrel) while clean energy is increasingly the path to electric independence, check out this latest bonus episode of Climate Confident+.

The post Why Fossil Fuel Dependence Is a Terrible Business Model appeared first on Tom Raftery.com.

And that matters.

Because the economic violence of a fossil-fuel-centred conflict does not stay in the blast radius. It propagates through tankers, terminals, traders, power markets, fertiliser costs, supermarket shelves and public budgets. Quietly at first. Then all at once.

The war involving the US, Israel and Iran is a brutal reminder that energy security built on combustible liquids moving through narrow waterways is not security at all. It is dependency, wrapped in military jargon and sold as realism. The Strait of Hormuz remains one of the most dangerous single points of failure in the global economy. A fifth of the world’s oil transit passed through it in 2024. A chokepoint that narrow should terrify any serious policymaker. It certainly should terrify any finance minister. Yet here we are, still allowing national prosperity to hinge on whether tankers can thread a few dozen miles of contested water without being hit, boarded, delayed or priced out by war-risk insurance.

Now set that beside the opportunity cost.

Using the composite loss figure supplied here, roughly $88.7 billion was burned in the first 17 days of this conflict through direct military expenditure and wider economic damage. That figure is illustrative rather than audited. War accounting is famously slippery, because governments are allergic to telling the full truth when the bill arrives. But even if the real number ends up somewhat lower or higher, the order of magnitude is the point.

And the point is obscene.

Because when I stress-test the clean-energy side of the equation using current IRENA cost benchmarks, that same $88.7 billion could instead buy roughly:

128 GW of utility-scale solar, using a 2024 global average installed cost of $691/kW.
85 GW of onshore wind, using a 2024 global average installed cost of $1,041/kW.
462 GWh of battery storage, using a 2024 global average installed cost of $192/kWh.

Those are not boutique pilot-project numbers. They are system-shaping numbers. Numbers that alter import dependence, price volatility, grid stability and strategic posture.

The data says…

Start with the war itself. Public reporting indicates the Pentagon told Congress that the first six days of Operation Epic Fury cost $11.3 billion, excluding smaller expenses and the cost of continuing operations. Israeli officials, meanwhile, warned that wartime restrictions were costing the Israeli economy around $3 billion per week under severe disruption conditions. Financial markets reacted in the way they always do when fossil infrastructure meets geopolitics: oil spiked. Brent crude moved above $105 per barrel as traders priced in supply risk and the disruption of flows through Hormuz.

That is the fossil fuel tax in real time.

Not a carbon tax. Not some imagined green penalty. A war tax. Imposed by oil dependence itself.

Now compare that with where energy economics actually are in 2025 and 2026. According to the IEA’s World Energy Investment 2025, global investment in solar is expected to reach $450 billion in 2025, making it the single largest item in world energy investment. According to IRENA’s 2025 reporting on 2024 costs, 91% of newly commissioned utility-scale renewable power projects delivered cheaper electricity than the lowest-cost new fossil alternative. New onshore wind averaged $0.034/kWh. New solar PV averaged $0.043/kWh. And renewables commissioned in 2024 helped avoid $467 billion in fossil-fuel costs.

Pause on that for a moment.

The same system that tells us endless military spending is regrettable but necessary also now has to contend with a very inconvenient fact: the cheapest route to energy security is increasingly not drilling, escorting and bombing. It is building.

The storage story is even more striking. Utility-scale battery storage costs fell to around $192/kWh in 2024, down 93% from 2010. At that price, the implied daily war burn rate in this conflict, around $5.2 billion per day, could buy roughly 27 GWh of battery storage every 24 hours.

Every day.

That means one week of equivalent spending could finance about 190 GWh of storage. The full 17-day total could finance around 462 GWh. For context, ERCOT’s August 2025 peak demand was just under 84 GW. So on a simple energy basis, 462 GWh could cover that sort of peak for roughly five and a half hours. Not forever, obviously. Batteries are not magic. But five and a half hours at Texas-peak scale is not trivial. It is the difference between a grid that bends and a grid that breaks.

Solar tells a similar story. 128 GW of utility-scale solar, at a conservative 20% capacity factor, would generate roughly 224 TWh per year. Using the EIA’s average US household consumption of about 10,500 kWh per year, that is enough annual electricity for more than 21 million homes. Onshore wind at 85 GW, assuming a 34% capacity factor, lands in the same ballpark. One war’s opening bill. Millions of homes.

This is the real scandal. Not just that war is expensive. Everyone knows war is expensive. It is that the alternative has become so economically compelling, so scalable, so strategically sensible, and leaders still keep reaching for the most wasteful option on the shelf.

The implications…

This matters first as a security question.

For decades, energy security has been treated as a military problem. Secure supply. Protect shipping lanes. Stabilise producer states. Maintain deterrence. Keep fuel flowing. But that framework belongs to an earlier era. It made grim sense in a world where hydrocarbons were structurally unavoidable and clean alternatives were either costly or marginal. That world is over. Politicians may not have noticed. Lobbyists certainly hope they do not. But the economics have changed.

Domestic renewables, storage, grids and electrification reduce exposure to hostile geography. They shrink the leverage of petro-autocrats. They reduce the strategic value of chokepoints. They make price spikes less contagious. They harden economies against coercion.

You cannot embargo sunlight in Seville. You cannot blockade wind in Cork. You cannot cause a global price shock in Kansas because a battery in Texas charged at noon and discharged at 8 pm.

That is not idealism. That is engineering.

It matters second as an affordability question.

Military spending does create activity, yes. So does rebuilding after a flood. So does repairing a broken window. Human civilisation occasionally rediscovers Bastiat and then forgets him again in time for the next budget cycle. A missile does not become productive because it is expensive. Once fired, the capital is gone. The return is ash, debt and procurement paperwork. A solar farm, by contrast, produces electricity for 25 years or more. A wind farm does the same. A battery arbitrages price spreads, provides balancing services, reduces curtailment and improves system reliability. These are productive assets. They pay back.

Third, it matters for resilience.

Fossil-heavy systems are exposed not just to conflict, but to logistics. Tankers. Pipelines. ports. Refineries. storage terminals. single-point failures. Clean systems are not invulnerable, and anyone claiming otherwise is selling incense. They rely on wires, inverters, transformers, software, supply chains and sane planning. But they are far more modular. Damage is less likely to cascade in the same way. A distributed portfolio of solar, wind, storage and demand flexibility is harder to knock out than a centralised chain of fuel extraction, transport, refining and combustion.

Kismet: one of the strangest twists in all this is that war is now helping make the case against the very fuels wars are often fought around. Every oil shock is effectively a live advert for electrification.

The strategies…

So what should leaders do?

First, stop treating clean energy as climate policy alone. It is industrial policy. Security policy. Cost-control policy. resilience policy. The framing matters because budgets follow framing.

Second, build storage at the scale the numbers now justify. Not token megawatts announced with ribbon-cutting theatre, but system-scale procurement. Fast-track interconnection. Reform market design so flexibility gets paid properly. Storage is no longer the side dish. In grids with high solar shares, it is becoming the cutlery.

Third, accelerate electrification where alternatives are already superior: passenger transport, urban buses, heat pumps, industrial low-temperature heat, and an increasing slice of freight and process energy. Every unit of demand shifted from volatile fossil fuel markets to domestically generated electricity weakens the geopolitical transmission mechanism of war.

Fourth, treat grid investment as strategic infrastructure. The weakness in many power systems is no longer generation cost. It is wires, queues, permitting and planning. Governments that still obsess over the cost of renewables while ignoring grid bottlenecks are arguing with 2015 while losing 2026.

Fifth, tell the truth about security. The old claim was that fossil fuels made nations strong. The actual record is messier: import dependence, inflation shocks, naval patrols, subsidy burdens, strategic reserve releases, and endless diplomatic contortions around unstable suppliers. Strength lies in optionality. In diversity. In local generation. In flexibility. In efficiency. In storage. In electrified demand that can move, shift and respond.

The signal of change…

The encouraging part, and there is one, is that the transition is already happening.

IRENA reports that the world added 582 GW of renewable capacity in 2024, a record annual increase. The IEA says solar investment alone is hitting $450 billion this year. California’s grid-scale battery fleet has grown from 500 MW in 2019 to more than 13,000 MW under CPUC oversight in 2025, and batteries were already providing an average of 8.6% of CAISO’s energy during the late afternoon and evening peak hours in 2024. Ember’s analysis shows that in sunny locations, pairing solar with batteries is already pushing close to round-the-clock clean electricity.

That is the signal leaders should be reading.

Not that the world has solved everything. It has not. Not remotely. But the core economic logic has flipped. Clean power used to need moral arguments because the financial case was not always enough. Now, more and more often, the financial case stands on its own. The moral case simply makes the indictment harder to ignore.

And so we return to the family looking at prices.

This is what serious leadership should understand: every new solar plant, every wind farm, every battery installation, every upgraded grid line, every electrified bus depot, every heat pump rollout, every efficiency measure is more than a climate action. It is a small act of geopolitical defiance. A refusal to let household budgets, national strategy and industrial competitiveness remain hostage to fossil chokepoints and the men who profit from them.

We cannot unspend the first 17 days of this war.

But we can learn from them.

Because if $88.7 billion can vanish into munitions, disruptions and panic-pricing in less than three weeks, then the argument that the energy transition is somehow too expensive should finally be laughed out of the room. The money exists. The technology exists. The economics are no longer in doubt.

The question is whether leaders want assets that keep paying society back, or invoices that keep arriving with smoke still rising from the page.

If they choose wisely, the next time tensions flare in a narrow stretch of water half a world away, fewer families will feel it in their fuel tank, their heating bill, their grocery trolley or their mortgage.

That would be a better definition of security than anything a destroyer can provide.

Citations

1. Pentagon reported first six days of Operation Epic Fury cost $11.3bn; continuing costs excluded. Association of Defense Communities, 2026.
2. Israel Finance Ministry warning that wartime restrictions were costing the economy around $3bn per week. Times of Israel, 2026.
3. Oil prices rose to around $105 Brent / $101 WTI as markets priced in conflict and Hormuz disruption. Financial Times, 2026.
4. The Strait of Hormuz carried about 20% of global petroleum liquids consumption in 2024. U.S. EIA, 2025. (US EIA)
5. Global investment in solar expected to reach $450bn in 2025. IEA, World Energy Investment 2025. (IEA)
6. In 2024, 91% of new utility-scale renewable projects were cheaper than the cheapest new fossil alternative; renewables avoided $467bn in fossil-fuel costs. IRENA, 2025. (IRENA)
7. 2024 global average renewable costs used for recalculation: solar PV $691/kW, onshore wind $1,041/kW, battery storage $192/kWh. IRENA, 2025. (Sustainability Magazine)
8. Average US household electricity use around 10,500 kWh/year. U.S. EIA, updated 2023. (US EIA)
9. ERCOT August 2025 peak demand was roughly 83.7 GW. ERCOT, 2025. (ERCOT)
10. California batteries provided an average of 8.6% of CAISO balancing area energy in late afternoon and evening peak hours in 2024; California had grown to 13,000+ MW of grid-scale battery storage in 2025. CAISO and CPUC, 2025. (caiso.com)
11. Global renewable additions reached about 582 GW in 2024. IRENA, 2025. (IRENA)
12. Solar-plus-battery systems are increasingly capable of delivering near-24/365 clean power in sunny regions. Ember, 2025. (ember-energy.org)
13. Green investment delivers higher employment effects than fossil-fuel spending; one frequently cited PERI study found roughly 7.5 jobs per $1m in renewables versus 2.65 in fossil fuels. PERI UMass, 2016. (peri.umass.edu)

Photo credit Keith Davenport on Flickr

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A tanker does not need to explode for society to feel the blast.

Sometimes the shock arrives more quietly. First as a flicker on a trading screen. Then as a higher diesel bill. Then as fertiliser prices creep up. Then as freight rates jump, airline margins compress, central banks hesitate, and every executive who thought energy was “someone else’s problem” discovers, once again, that it sits underneath nearly everything.

We have seen this film before. In 2022, Russia’s invasion of Ukraine turned fossil fuel dependence into an invoice. Europe paid in inflation, industrial pain, and a frantic scramble for alternatives. Now, in 2026, the US-Israeli war on Iran is doing something similar. Different geography. Same basic lesson. When a large share of the global economy runs on fuels that must be dug up, loaded, insured, sailed through chokepoints, and defended by navies, the system is not strong. It is brittle.

And brittle systems fail noisily.

The Strait of Hormuz handles about one-fifth of global oil flows. This week, Brent has been heading for its steepest weekly gain since Russia’s full-scale invasion of Ukraine in February 2022, with traders repricing risk, inflation fears returning, and markets wobbling as shipping through Hormuz has been severely disrupted. [1][2]

That matters everywhere. But it matters especially in Asia. And over the longer arc, it matters particularly for China.

Because for all China’s immense industrial power, manufacturing heft, and recent progress in electrification, it still relies heavily on imported oil and gas moving through vulnerable seaborne routes. It has buffers, yes. Serious ones. But a buffer is not the same thing as immunity.

The deeper point is larger than China, or Iran, or this week’s oil chart. It is this: sunshine and wind do not need to transit Hormuz. Electrons generated at home do not require tanker insurance. Batteries do not panic when missiles fly over a shipping lane.

That is not environmental romanticism. It is hard-headed strategic logic.

The data says…

Start with the immediate shock.

Reuters reported on 6 March 2026 that Brent crude had risen 17.2% this week, its biggest weekly jump since February 2022, as the conflict widened and disruptions around the Strait of Hormuz intensified. The strait is a chokepoint for about 20% of global oil flows. [1] Other reporting this week has underlined the same pattern: oil and gas prices have spiked, equity markets have fallen back, and fears of a renewed inflation shock have quickly returned. [2][3]

This is not merely a market story. It is a systems story.

According to Columbia’s Center on Global Energy Policy, half of China’s oil imports and nearly one-third of its LNG imports transit the Strait of Hormuz. In 2025, China imported about half of its crude oil and almost one-third of its LNG from the Middle East. Using China customs data and tanker-tracking estimates, Columbia notes that China imported 4.9 million barrels per day of crude from key Middle Eastern suppliers in 2025, while Kpler estimates it also imported 1.38 million barrels per day from Iran, much of it disguised in customs reporting. [4]

China is not blind to this vulnerability. Quite the opposite. It has been stockpiling aggressively. Columbia says China had 1.39 billion barrels of oil in storage as of 2 March 2026, enough to cover roughly 120 days of net crude imports at 2025 levels. Reuters separately reported analysts estimating China’s reserves at around 900 million barrels, or just under three months of imports. [4][5]

So yes, China can ride out a short-to-medium disruption better than many assume. That matters. But it does not erase the strategic exposure.

Columbia also points out that China has far less flexibility on gas. About 30% of its LNG imports arrive via Hormuz, and if those flows are disrupted, its options in the short term are ugly: consume less or pay more. Neither is a mark of energy sovereignty. [4]

Kismet: while oil traders were sweating tankers this week, China’s power sector was quietly becoming harder to blockade. Official data show the country added more than 430 GW of new wind and solar capacity in 2025 alone, pushing total renewable capacity above 1,800 GW and taking renewables to more than 60% of installed power capacity. [6]

That is the strategic shift in one statistic.

Now layer in cost.

IRENA’s latest cost data are devastating for the old fossil logic. In 2024, 91% of newly commissioned utility-scale renewable capacity produced electricity more cheaply than the cheapest new fossil fuel-based alternative. Utility-scale solar averaged USD 0.043/kWh globally, 41% cheaper than the least-cost fossil alternative. Onshore wind averaged USD 0.034/kWh, 53% cheaper. Battery storage costs have fallen 93% since 2010, reaching USD 192/kWh in 2024. [7]

In other words, the cleaner option is now frequently the cheaper one. And, increasingly, the safer one too.

China’s own economics sharpen this further. IRENA reports utility-scale solar in China at USD 0.033/kWh and onshore wind at USD 0.029/kWh in 2024, both below global averages. Columbia notes that China plans to more than double its energy storage capacity from 73.8 GW / 168 GWh in 2024 to 180 GW / 450 GWh by 2027 (for context, 1GW is roughly the output of a typical nuclear reactor). [4][7][8]

So the world’s biggest manufacturing economy is telling us something with its capital allocation. Not through speeches. Through steel, silicon, copper, and batteries.

The implications…

The first implication is brutally simple: fossil fuels are not just a climate liability. They are a macroeconomic instability machine.

Every time a war, embargo, blockade, or shipping scare hits an oil and gas corridor, the costs spill well beyond the energy sector. Transport costs rise. Food systems feel it through fertiliser and freight. Industry feels it through heat and feedstocks. Central banks get dragged into decisions they did not ask for. Reuters reported this week that investors have already pushed back expectations of rate cuts as higher oil prices revive inflation concerns. [9]

So when someone frames renewables purely as a green preference, they are missing the plot entirely. The real argument is that dependence on globally traded hydrocarbons imports volatility directly into the bloodstream of the economy.

The second implication is geopolitical.

China’s reserves mean it can absorb pain for a while. But reserves are a bridge, not a destination. Over the long term, a country that remains structurally dependent on seaborne oil and LNG moving through contested chokepoints is exposed to coercion, price spikes, and strategic distraction. Columbia’s conclusion is telling: this conflict is likely to reinforce Beijing’s push for greater energy self-sufficiency, including domestic supply and a continued transition away from fossil fuels. [4]

That has consequences for everyone else. If China doubles down further on solar, wind, storage, EVs, grid flexibility, and electrified industry as a response to Hormuz risk, it will not just reduce exposure. It will deepen its manufacturing lead in the very technologies the rest of the world also needs.

That should worry Western policymakers who still treat clean technology as a climate niche rather than an industrial strategy.

The third implication is moral as much as economic.

Wars keep revealing what the energy transition really is. It is not simply a matter of emissions accounting. It is an escape route from recurring hostage situations. Oil and gas dependence binds societies to supply chains that can be disrupted by autocrats, insurgents, sanctions, naval standoffs, and insurance markets having a nervous collapse. Renewable electricity, especially when paired with storage and flexible demand, localises a larger share of the energy system. It shortens the chain. It reduces the hostage risk.

Not perfectly. Minerals matter. Grids matter. Manufacturing concentration matters. But compare the two systems honestly. One depends on endless daily combustion fuel deliveries through geopolitical chokepoints. The other depends on building assets that then harvest local flows of energy for decades.

That is a meaningful difference.

The strategies…

First, electrify faster.

Transport, low-temperature heat, much of industry, and large parts of buildings should be pushed towards direct electrification wherever technically feasible. Every vehicle shifted from imported oil to domestically generated electricity weakens the power of a future chokepoint crisis. Every heat pump installed instead of a gas boiler cuts exposure to commodity spikes. Every industrial process electrified where possible reduces dependence on molecules that can be embargoed, bombed, or extorted.

Second, build storage and flexibility as strategic infrastructure, not optional extras.

Solar and wind without storage are useful. Solar and wind with storage, demand response, stronger interconnection, and modern grid operations are something else entirely. They become resilience assets. They turn variable generation into dependable systems capability. China’s push towards 180 GW of energy storage by 2027 is not some abstract climate gesture. It is a recognition that the grid of the future needs balancing muscle. [4][8]

Third, stop measuring energy security with 20th-century assumptions.

For too long, policymakers treated “security” as synonymous with stockpiles, pipelines, and military protection of sea lanes. Those still matter in the current system. But real 21st-century energy security also means rooftop solar, utility-scale renewables, batteries, transmission, digital grid controls, EVs, and flexible industrial loads. It means reducing the volume of fuels that must be imported in the first place.

The best barrel in a crisis is the one you no longer need.

Fourth, treat clean tech as industrial policy.

This is where Europe, in particular, still under-thinks the challenge. If renewables with storage are now cheaper than new fossil generation in most cases, and if they also improve security and resilience, then deployment speed becomes an economic competitiveness issue. Slow permitting, weak grid investment, and policy drift are no longer administrative annoyances. They are strategic self-harm.

The signal of change…

The encouraging part is that this transition is already happening.

China added more than 430 GW of wind and solar in 2025. Renewables now account for over 60% of its installed power capacity. The IEA expects China’s electric car sales share to reach around 60% in 2025 and around 80% by 2030 under current policy settings. [6][10]

Globally, renewables are not winning only on emissions. They are winning on cost. IRENA says renewables avoided USD 467 billion in fossil fuel costs in 2024 alone. [7] That number should concentrate minds in every boardroom and ministry still pretending that fossil dependence is the prudent option.

Because prudence, properly understood, means reducing exposure to shocks. It means choosing systems that are cheaper to run, harder to disrupt, and better aligned with climate reality.

And that brings us back to the opening point.

A tanker does not need to explode for society to feel the blast.

We are feeling it again now, in oil charts, shipping risk, inflation nerves, and strategic anxiety. The lesson is not subtle. It has been shouted at us by 2022, and it is being shouted at us again by 2026.

Energy systems built around imported fossil fuels are vulnerable by design.

Energy systems built around domestic renewables, storage, electrification, and smarter grids are not invulnerable. Nothing is. But they are calmer. Cheaper. More sovereign. More resilient. More compatible with a liveable climate. And crucially, less dependent on whether a narrow strip of water remains passable this week.

Sunshine and wind have no issues getting through the Strait of Hormuz.

That line may sound glib. It is not. It is strategy.

The countries that act on it fastest will not merely cut emissions. They will cut risk. They will lower bills. They will reduce exposure to geopolitical blackmail. They will build economies that can absorb shocks instead of amplifying them.

That is the real prize now.

And the war on Iran, grimly and expensively, is reminding us of it once again.

Citations

[1] Reuters, 6 March 2026, oil set for steepest weekly gain since Russia’s 2022 invasion; Brent up 17.2% this week; Hormuz handles about 20% of global oil flows. (Reuters)

[2] The Guardian, 6 March 2026, oil over $85 and biggest weekly gain in four years as Strait traffic grinds to a halt; inflation fears returning. (The Guardian)

[3] The Guardian, 5 March 2026, stock market falls as US-Israel war with Iran drives up oil and gas prices. (Reuters)

[4] Columbia Center on Global Energy Policy, 4 March 2026, China’s Energy Security and the Middle East conflict; half of China’s oil imports and nearly one-third of LNG imports transit Hormuz; 1.39bn barrels in storage; 120 days of net crude imports; storage target and transition implications. (energypolicy.columbia.edu)

[5] Reuters, 2-4 March 2026, Asia’s dependence on Middle Eastern oil and LNG; analysts estimate China’s reserves at around 900m barrels, just under three months of imports. (Reuters)

[6] China National Energy Administration reporting via China’s official government portal, 30 January 2026; more than 430 GW of wind and solar added in 2025; renewables above 1,800 GW and over 60% of installed capacity. (english.www.gov.cn)

[7] IRENA, Renewable Power Generation Costs in 2024; 91% of new utility-scale renewable projects cheaper than fossil alternatives; solar 41% cheaper; onshore wind 53% cheaper; batteries down 93% since 2010. (irena.org)

[8] China storage target to reach over 180 GW by 2027, per official plan and Reuters coverage. (english.www.gov.cn)

[9] Reuters, 3-6 March 2026, higher oil prices reviving inflation fears and reducing expectations of rate cuts. (Reuters)

[10] IEA Global EV Outlook 2025, China expected to reach around 60% EV sales share in 2025 and around 80% by 2030 under current policy settings. (IEA)

The post Why the Strait of Hormuz Proves Renewables Are Strategic appeared first on Tom Raftery.com.

A transformer does not fail politely.

It ruptures. It burns. It turns a functioning grid into twisted metal and silence.

In Kyiv, in winter, that silence was deliberate. Substations were targeted. Thermal plants repeatedly struck. Transmission nodes became strategic objectives.

And yet hospitals kept operating. Critical services stayed alive. In some cases, rooftop solar and batteries did what centralised infrastructure could not.

Last October, I wrote Why You Can’t Drone a Solar Panel, arguing that electrification and distributed renewables are no longer just climate policy. They are strategic defence policy.

Now the IEA’s new report, Energy System Resilience: Lessons Learned from Ukraine, turns that instinct into doctrine.

Its message is uncomfortable.

Decentralisation helps.

But decentralised power is not enough.

Europe has largely completed Phase 1 of the transition – deployment.

Phase 2 is preparedness.

And Phase 2 will determine whether the electric age is durable or dangerously fragile.

The Data Says…

Ukraine is not a metaphor. It is a stress test.

The IEA makes a crucial distinction: energy security is about long-term adequacy. Energy resilience is about surviving events beyond planning assumptions.

Security asks: do we have enough?
Resilience asks: what happens when it breaks?

From Ukraine’s experience, the IEA extracts ten pillars of resilience: physical hardening, restoration planning, cyber defence, communications redundancy, spare parts strategy, decentralisation, demand flexibility, and emergency governance.

Some lessons are stark.

Centralised generation and high-voltage substations proved highly vulnerable when systematically targeted. Distributed resources were materially harder to neutralise at scale.

But the deeper lesson is this:

Resilience is restoration velocity.

How fast can you reroute power?
How fast can you replace equipment?
How fast can you restart?

Meanwhile, Europe remains structurally exposed. The EU’s dependence on imported fossil fuels translated into enormous economic pain during the 2021–2024 energy crisis. Volatility was not theoretical. It was invoice-level reality.

At the same time, the economics of clean power have tipped decisively. According to IRENA, 91% of newly commissioned utility-scale renewables in 2024 delivered electricity cheaper than the cheapest new fossil alternative. Globally, renewables avoided roughly USD 467 billion in fossil fuel costs that year.

The transition is accelerating because it now makes financial sense.

The question is whether Europe is building a system that can endure coordinated physical attack, cyber intrusion, extreme weather, and supply chain disruption, or merely a cleaner version of yesterday’s vulnerability.

The Implications…

1. Security Is Now Electrical

For decades, European energy security meant pipelines and tankers.

Ukraine reframes it.

The electricity grid is now front-line infrastructure.

Attacks did not need to annihilate entire systems. They only needed to degrade reliability. Repeated strikes on substations were enough to destabilise daily life.

If your economy assumes uninterrupted electricity, grid fragility becomes macroeconomic risk.

Security is no longer about molecules.

It is about nodes.

2. Affordability Depends on Continuity

Energy affordability debates often orbit wholesale prices.

Ukraine demonstrates something harsher: the cheapest kilowatt-hour is the one that arrives during crisis.

Resilience investments feel expensive, until failure costs more.

Spare transformers and redundant communications links look indulgent until they become the only thing standing between disruption and collapse.

3. Resilience Is Logistics in Disguise

Large power transformers are not off-the-shelf commodities. They are heavy, bespoke, slow to manufacture, and globally sourced.

Restoration requires:

• Standardised equipment
• Pre-positioned spares
• Cross-border cooperation
• Logistics capable of moving oversized assets fast

In other words, resilience is supply chain architecture wearing a hard hat.

Europe’s fragmented regulatory landscape introduces friction precisely where speed matters most.

That friction is risk.

4. Clean Progress Must Be Crisis-Proof

Electrification reduces fossil dependency. It decentralises generation. It lowers exposure to imported volatility.

But a clean system without hardened cyber defences, operational discipline, and restoration readiness is still fragile.

A low-carbon grid that fails under pressure does not strengthen political support for climate action.

It undermines it.

The Strategies…

Phase 2 demands seriousness. Not slogans.

1. Treat Grid Preparedness Like Defence Planning

Ukraine’s experience shows the necessity of strategic reserves for critical components, particularly large transformers and high-voltage equipment.

Standardisation reduces delays. Pre-negotiated logistics contracts accelerate recovery. Regular black-start drills expose weaknesses before adversaries do.

Resilience planning should resemble defence procurement, not routine maintenance.

2. Design for Survival, Not Just Efficiency

Traditional grid design optimises for elegance.

Modern resilience demands graceful degradation.

That means:

• Microgrids for hospitals and emergency services
• Distributed storage paired with local renewables
• Islanding capability so critical nodes can operate independently when transmission fails

Efficiency is admirable.

Survivability is non-negotiable.

3. Elevate Cyber to Strategic Risk

An electrified economy becomes digitally exposed.

Ukraine experienced cyberattacks on its grid years before full-scale invasion. Operational technology systems are targets.

Utilities and major energy users must treat OT security as board-level risk. Segmentation, monitoring, and recovery protocols are strategic safeguards, not compliance exercises.

A grid without secure communications is decorative metal.

4. Activate Demand Flexibility

Consumers are not passive load.

Smart EV charging, industrial load shifting, thermal storage, and demand response provide system flexibility during stress.

Flexibility buys time. Time restores systems.

5. Avoid Recreating Centralised Fragility

Transitions often reproduce old vulnerabilities in new forms: massive battery hubs, hyper-concentrated data centre clusters, oversized transmission corridors without redundancy.

Resilience thinking asks a blunt question:

If this fails, what happens next?

If the answer is systemic disruption, redesign.

6. Accelerate Electrification, With Discipline

Electrification remains strategically sound. It reduces import dependency and aligns with favourable economics.

But deployment alone does not equal resilience.

Preparedness does.

Electrify transport. Electrify heating. Electrify industry.

And simultaneously engineer the scaffolding that makes the system defensible, repairable, and adaptable.

Deployment is Phase 1.

Preparedness is Phase 2.

The Signal of Change…

The encouraging shift is conceptual.

The IEA’s elevation of resilience signals that energy transition and energy security are inseparable.

The EU increasingly treats grid readiness and equipment stockpiling as strategic issues, not engineering footnotes.

And falling renewable costs expand what is politically feasible. When clean power is often cheaper, resilience spending becomes economic prudence rather than ideological choice.

But the most important change is psychological.

Ukraine has forced energy professionals to think beyond optimisation and into survivability.

That is an upgrade.

Interestingly, the first confirmed cyberattack to cause a power outage occurred in Ukraine in 2015, years before the invasion. It was not an anomaly. It was a preview. Electrified societies are digitally targetable. The warning arrived early. The design response lagged.

Conclusion

Return to that transformer.

When it failed, the question was not whether Europe had reduced emissions.

The question was whether the system could absorb impact and continue functioning.

Europe is advancing through Phase 1. Renewable deployment is accelerating. Electrification is expanding. Economics increasingly favour clean power.

But decentralised power is not enough.

Without hardened infrastructure, spare parts strategy, cyber defence, restoration drills, and operational discipline, a cleaner grid can still be brittle.

Ukraine has shown that resilience is built before a crisis or improvised during it.

Improvisation is heroic.

It is not strategy.

Energy security in the 21st century is no longer a fuel question.

It is an architecture question.

And architecture can be engineered – deliberately, rigorously, and before the next rupture.

Photo credit J Triepke on Flickr

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When companies decide where to build factories, smelters, data centres, or processing plants, they tend not to wax lyrical about climate goals.

They look at spreadsheets.

Energy costs. Price volatility. Reliability. Long-term risk. Exposure to fuel shocks. Regulatory uncertainty. The probability that today’s cheap power becomes tomorrow’s liability.

That is why South Australia has quietly become one of the most interesting industrial case studies of the past decade.

Once mocked for moving “too fast” on renewables, it now runs on a grid dominated by wind and solar, backed by batteries and interconnection. Wholesale prices are volatile in the short term, yes. But long-term electricity costs are falling. Exposure to gas price shocks has collapsed. Reliability metrics have improved. And increasingly, businesses are choosing to locate there because of it.

This is not new.

Iceland has been playing this game for decades. Aluminium smelters did not move there for the scenery. They moved because clean, cheap, renewable electricity was abundant, reliable, and insulated from global fuel markets. Energy became an advantage, not a constraint.

That shift is now going global.

According to the International Energy Agency’s Electricity 2026 report, electrification is no longer a climate strategy sitting off to the side of economic planning. It is becoming the organising logic of growth itself.

Why this matters now

Electricity demand is accelerating faster than almost anyone expected.

The IEA projects global electricity demand growth of roughly 3–4% per year through 2026, well above historical averages. This is not population growth. It is structural change.

Transport electrification. Heat pumps. Industrial electrification. Data centres. AI. Digital infrastructure. All of it runs on power.

And crucially, almost all net growth in electricity generation over this period comes from renewables, led by solar PV and wind, with storage scaling alongside them.

This changes the competitive landscape.

Countries that electrify quickly, and cleanly, gain cheaper energy, greater security, and industrial pull. Those that delay lock themselves into volatile fuel costs and stranded assets.

The divergence is already visible.

The data says…

Start with the global system.

According to the IEA’s Electricity 2026 outlook, renewables account for the vast majority of new power capacity additions worldwide. Solar alone is adding more capacity each year than any other generation source in history. Wind follows close behind.

Coal generation has likely already peaked globally. Gas continues to play a role, but increasingly as a provider of flexibility rather than bulk energy. Electricity-sector CO₂ emissions are flattening as clean generation races to meet rising demand.

This is progress. Real progress. But unevenly distributed.

China: electrification as industrial strategy

Carbon Brief’s analysis of China’s energy transition shows that clean energy drove more than one-third of China’s GDP growth in 2025. That includes renewables, EVs, batteries, grids, and associated manufacturing.

China is not decarbonising out of altruism. It is building dominance across supply chains that matter in an electrified world. Solar manufacturing. EV production. Battery chemistry. Grid hardware. Power electronics.

Coal has not vanished. But its role is changing. Growth is slowing. Capacity factors are falling. Clean electricity is doing the heavy lifting.

This is what “transition” actually looks like.

India: skipping the fossil detour

India’s path is different, and arguably more impressive.

According to Ember’s 2026 analysis, India is industrialising with far less coal and oil per capita than China did at a similar stage of development. Solar capacity is scaling rapidly. EV adoption, particularly two- and three-wheelers, is accelerating. Oil demand growth is already showing signs of slowing.

The reason is simple. The economics flipped early.

Solar plus storage in India is now cheaper than new coal. EVs beat combustion on lifetime cost. Electrification is the least-cost option, not the aspirational one.

India is not waiting to get rich before it gets clean. It is using clean power to get rich.

Africa: leapfrogging at scale

Africa is often discussed in the language of need. The data tells a story of opportunity.

Africa installed around 4.5 GW of new solar capacity in 2025, a 54% year-on-year increase, the fastest growth on record. According to Bloomberg, the continent could install over 33 GW by 2029, more than six times recent annual additions.

What makes Africa different is structure.

It is running two energy transitions in parallel. Utility-scale solar feeding national grids. Distributed solar and mini-grids powering homes, clinics, farms, and businesses directly.

Just as Africa skipped landlines and went straight to mobile phones, it is leapfrogging fossil-heavy power systems. Solar and storage offer energy access, resilience, and economic participation without locking in fuel imports.

This is not a marginal story. It is the early shape of a new growth model.

The implications…

Climate

Electrification remains the single most effective lever for cutting emissions at scale. Replace combustion with electricity. Then clean the grid.

The IEA is clear: without electrification, emissions reductions stall. With it, they compound. Every EV, heat pump, electric kiln, and server rack powered by clean electricity locks in decades of avoided emissions.

Security

Energy security is shifting from fuel supply to system design.

Countries that generate electricity domestically from wind, sun, and water are less exposed to geopolitical shocks. They import fewer fuels. They face fewer price spikes. They gain strategic autonomy.

Electrons do not pass through straits or pipelines.

China understands this. India understands this. Africa increasingly does too.

Affordability

Here is the part still underappreciated.

Electrification lowers costs.

IEA, Lazard, and BNEF data consistently show solar and wind as the cheapest sources of new electricity in most regions. Batteries continue to fall in cost. EVs have lower running and maintenance expenses. Heat pumps slash energy bills when paired with clean power.

Once adoption starts, the economics reinforce themselves.

Resilience

Distributed generation and storage make systems harder to break.

Mini-grids in Africa keep power flowing during extreme weather. Batteries stabilise grids with high renewable shares. Interconnection spreads risk. Flexibility absorbs shocks.

Resilience is no longer about building bigger plants. It is about building smarter systems.

The strategies…

So what should leaders do?

Build grids like competitiveness depends on them

Because it does.

The IEA warns that grids are now the primary bottleneck. Transmission delays are curtailing renewables. Distribution networks are unprepared for EVs and heat pumps.

Permitting reform, investment acceleration, and workforce expansion are now economic priorities.

Treat flexibility as core infrastructure

Batteries, demand response, interconnection, and long-duration storage are no longer optional. They are what allow high shares of renewables without instability.

Markets that reward flexibility move faster. Others fall behind.

Electrify relentlessly

Transport. Buildings. Industry.

Every year of delay locks in assets that will become liabilities.

Align industrial policy with electrification

China and India are doing this deliberately. Manufacturing, energy, and trade policy point in the same direction.

This is where the United States is faltering.

The signal of change…

Look at where capital is flowing.

South Australia attracting industry because its grid is clean and increasingly cheap.
China using clean energy to drive GDP growth.
India building industrial capacity on solar rather than coal.
Africa scaling energy access without fossil lock-in.

And then there is the United States.

Despite unmatched innovation capacity, the US is increasingly clinging to fossil incumbents, delaying grid reform, and politicising technologies the rest of the world is deploying at scale.

This is not ideological failure. It is economic self-sabotage.

While others build the systems of an electrified economy, the US risks importing them later, at higher cost, with fewer jobs attached.

Closing the loop

Capital follows advantage.

For much of the last century, that advantage came from access to fuels. Today, it comes from access to clean, reliable, affordable electricity.

South Australia and Iceland showed this early. China, India, and Africa are proving it at scale.

Electrification is not a moral gesture. It is an industrial strategy.

And the countries that understand that are already pulling ahead.

Photo credit – John Morton on Flickr

The post Capital Follows Electrons: How Electrification Is Driving Growth appeared first on Tom Raftery.com.

On a cold winter morning in New York, people open windows.

Not because they want fresh air.
Because their apartments are overheated.

Steam radiators, designed for another century, blasting heat into rooms that have no way to modulate it. The fastest way to cool down is to dump energy straight into the street.

It’s absurd.
It’s wasteful.
And it’s still normal.

That single image captures why building decarbonisation has become unavoidable. Not fashionable. Not optional. Unavoidable.

In many global cities, buildings are now the largest source of emissions. Bigger than transport. Bigger than industry. Bigger than power generation itself, once you follow the energy flows all the way through.

And yet, buildings rarely dominate climate conversations.

They should.

Because buildings sit at the intersection of climate urgency, energy costs, grid stability, and long-term resilience. They are slow to change. Capital-intensive. Politically sensitive. But once they do change, the benefits lock in for decades.

This is the decade where that shift either happens at scale, or doesn’t.

The Data Says…

Let’s ground this in numbers, not sentiment.

According to the UN Environment Program’s Global Status Report for Buildings and Construction (2024-25), buildings account for around 34% of global energy-related CO₂ emissions when you include both direct fuel use and electricity consumption. That’s more than all cars, trucks, ships, and planes combined.

In the EU, buildings consume roughly 40% of final energy. In the US, they are responsible for about 30% of total energy use, with space heating alone dominating demand in colder regions.

What’s changed is not awareness. It’s feasibility.

Between 2015 and 2025:

• The average cost of air-source heat pumps fell by roughly 35–45% in real terms in Europe and North America, according to IEA and BNEF data.
• Heat pump performance at low temperatures improved materially, with cold-climate systems now delivering COPs above 2.5 at −10°C.
• The levelised cost of electricity from renewables fell again. IRENA’s 2024–2025 analysis shows 91% of new renewable projects are now cheaper than fossil alternatives.
• Grid carbon intensity continues to fall across the EU and parts of the US, meaning electrification delivers compounding emissions reductions over time.

Meanwhile, regulation is sharpening.

New York’s Local Law 97 now caps operational emissions per square metre for over 50,000 buildings, with fines escalating through the 2025–2030 window. Similar policies are emerging in Boston, California, parts of the EU under EPBD revisions, and corporate disclosure regimes tied to operational emissions.

The data is unambiguous.
Buildings are a climate liability today.
They don’t have to be.

The Implications…

Climate

Buildings are long-lived assets. A boiler installed today will likely still be emitting in 2045. That makes every retrofit decision a climate decision.

Decarbonising buildings is one of the few levers where emissions reductions are:

• Immediate.
• Measurable.
• Durable.

Unlike offsets or future fuel promises, electrification cuts emissions at the point of use and improves automatically as grids clean up.

Delay here is not neutral. It locks in emissions.

Affordability

This is where the conversation has shifted most in the last three years.

Electrified buildings, when properly designed, are cheaper to run. Not always month-to-month in a linear way, but over the year and over asset life.

From the field data discussed with Drew Maggio in the latest episode of the Climate Confident podcast, the biggest cost mistakes are not technological. They’re design errors:

• Oversizing heat pumps for extreme weather hours that occur less than 3% of the year.
• Ignoring energy recovery opportunities already inside the building.
• Treating heat as waste rather than value.

Right-sized systems, paired with envelope improvements and recovery, consistently lower operating costs compared to fossil boilers and district steam. Not hypothetically. In real buildings.

Security

Gas dependence in buildings is not just a climate issue. It’s a geopolitical one.

The last five years made that painfully clear in Europe.

Electrified buildings reduce exposure to volatile fuel markets, imported gas, and infrastructure risk. They blow up less (!). They shift energy demand onto grids that can be diversified, decentralised, and increasingly domestic.

Energy sovereignty does not stop at power plants. It extends into basements, rooftops, and risers.

Resilience

Resilience is where building decarbonisation quietly becomes strategic.

Modular heat pump systems offer redundancy that single boilers never did. Thermal storage, ambient loops, and district energy networks allow buildings to share load and recover from shocks.

Electrified buildings are easier to integrate with batteries, demand response, and future grid services.

They fail less. And usually more gracefully.

The Strategies…

If you’re a corporate leader responsible for real estate, capital allocation, or sustainability, the path forward is no longer theoretical.

It looks like this.

1. Fix the envelope first

This is not optional. Electrification without envelope performance is financial self-harm.

Air sealing, insulation, glazing, and control of infiltration reduce loads dramatically. They make everything downstream smaller, cheaper, and more reliable.

Passive measures are boring.
They are also unbeatable.

2. Design for reality, not worst-case mythology

Designing systems for the coldest hour of the decade guarantees overspending.

As Drew Maggio explained, using resistive backup or hybrid strategies for rare temperature extremes can eliminate 20–35% of installed heat pump capacity without compromising comfort or compliance.

That is capex saved.
Roof space reclaimed.
Projects unblocked.

3. Treat heat as a resource

Wastewater heat recovery can recapture up to 90% of thermal energy from domestic hot water flows.

Subway tunnels, data centres, cooling systems, and ventilation exhausts are all heat sources hiding in plain sight.

Thermal energy networks are not futuristic. They are under-deployed.

4. Integrate early, not late

As highlighted in the construction and embodied carbon discussions, sustainability bolted on at the end fails.

Integrated design teams, shared data, and early collaboration between architects, engineers, and operators reduce cost and complexity.

Decarbonisation is easier when nobody is surprised.

5. Plan beyond compliance

Short-term fixes to dodge penalties create long-term liabilities.

Buildings last 50–100 years. Regulatory thresholds will tighten. Grid interactions will deepen. Carbon pricing will spread.

One-off retrofits every five years are the expensive path.

The Signal of Change…

This transition is no longer speculative.

New York’s heat pump market has accelerated sharply since 2019. LEED v5 embeds carbon at the core of design decisions. Cities like Vancouver and Boston are scaling thermal networks. Home electrification platforms are removing friction for households at scale.

Corporate portfolios are starting to treat building emissions as balance-sheet risk, not just ESG disclosure.

And crucially, the narrative is changing.

Building decarbonisation is no longer framed as sacrifice. It’s framed as:

• Better comfort.
• Lower volatility.
• Higher asset value.
• Future-proofed infrastructure.

That matters.

Because once executives see buildings as strategic infrastructure rather than static assets, the conversation shifts from “why” to “how fast”.

Closing the Loop

Back to that open window in winter.

That heat didn’t need to be wasted.
That cost didn’t need to be paid.
Those emissions didn’t need to exist.

Building decarbonisation is not glamorous. It doesn’t trend on social feeds. It doesn’t arrive with a single announcement.

It happens floor by floor. Pipe by pipe. Control loop by control loop.

But when it happens, it sticks.

And in a world chasing speed without durability, that might be the most powerful climate lever we have left.

If you want the deeper, practical detail behind these strategies, including real-world examples from New York, construction sites, and home retrofits, listen to the full episodes of Climate Confident, particularly Episode 258 with Drew Maggio.

This is where the transition becomes real.

Photo credit elycefeliz on Flickr

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