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

The post War Burned $88.7bn in 17 Days. It Could Have Bought Energy Security appeared first on Tom Raftery.com.

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

The post Energy System Resilience: Lessons Europe Must Learn from Ukraine appeared first on Tom Raftery.com.

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

The post Building Decarbonisation Is No Longer Optional. It’s Strategic. appeared first on Tom Raftery.com.

Last summer, in the middle of the day, wholesale electricity prices across parts of southern Europe did something that would have seemed absurd a decade ago.

They went negative.

Solar generation was surging. Rooftops, utility-scale arrays, and solar parks were all producing at once. Demand was soft. Power had nowhere useful to go. Clean electricity was curtailed because the system could not absorb it.

A few hours later, the picture flipped.

As the sun dropped, demand rose. Solar output collapsed. Gas plants ramped. Prices followed. Emissions followed too.

This is not a renewable energy problem.
It is a time problem.

For those old enough to remember TiVo, the analogy holds. Television didn’t improve because programmes suddenly got better. It improved because viewers stopped being forced to watch them live. TiVo separated production from consumption through time-shifting.

Renewable electricity is at the same point in its evolution. Solar and wind already generate vast amounts of clean power. Grids are still trying to consume it live.

Long duration energy storage (LDES) is TiVo for the power system. It lets us capture abundance and use it when it actually matters.

That is why LDES has moved from theoretical necessity to system-critical infrastructure. Not later. Now.

Why this matters now

For more than a century, electricity systems were built on a simple assumption: supply could be controlled.

Fossil fuels made that easy. Burn more when demand rises. Throttle back when it falls. Time barely mattered.

Renewables invert the logic.

Supply becomes variable. Demand stays human. The challenge shifts from generation to coordination across time.

Short-duration (1-4 hour) lithium-ion batteries have scaled at remarkable speed. They stabilise frequency, manage ramps, and smooth short-term volatility.

But they do not bridge the midday-to-evening gap.
They do not cover multi-day weather events.
And they are not designed to operate as foundational assets for decades.

That gap is exactly where long duration energy storage now sits.

The data says…

According to the IEA’s 2025 Renewable Electricity Report, renewables now provide more than 32% of global electricity generation, with solar additions continuing to outpace every other technology. In many regions, solar and wind are already the cheapest new sources of power.

Yet solar still accounts for only about 5% of total global electricity generation. The constraint is no longer cost. It is usability.

As renewable penetration increases, curtailment rises and price volatility intensifies. The marginal value of short-duration storage declines unless it is paired with longer-duration solutions.

The LDES Council estimates that a cost-optimised net-zero power system requires 4–6 terawatts of long duration energy storage globally by 2030, representing a USD 3.6 trillion market and unlocking up to USD 540 billion per year in system-wide savings once deployed at scale.

That is the modelling.

Now the evidence.

In January 2026, China began operating the world’s largest compressed-air energy storage facility in Jiangsu province. The project delivers 2.4 GWh of storage, produces 600 MW of dispatchable power, and can supply electricity equivalent to 600,000 households annually. BloombergNEF describes compressed-air systems as among the most cost-effective long duration storage options available at grid scale.

This is not a pilot.
It is grid infrastructure.

California offers a complementary signal, from a different direction.

According to the California Energy Commission, the state now has 16,942 MW of installed battery storage, more than 2,100% growth since 2019, making it the second-largest storage fleet in the world after China. Roughly 13.9 GW comes from utility-scale systems, with the remainder distributed across homes, businesses, schools, and public facilities.

That build-out has materially changed grid behaviour. California has now gone three consecutive years without issuing a Flex Alert, even through record-breaking heatwaves. In 2024, the state experienced its hottest summer on record, yet the grid remained stable, supported by storage that shifted excess midday solar into the evening peak.

This matters for two reasons.

First, it decisively disproves the claim that high-renewables grids are inherently unreliable. Storage works.

Second, it exposes the next constraint. California’s battery fleet is exceptionally good at managing hours. As renewable penetration rises further, and as fossil generation continues to retire, the system will increasingly need assets that manage days and weeks, not just evenings.

In other words, batteries solved the first act of the storage problem. Long duration energy storage is the second act. Together, they form a system. Separately, they do not.

Companies such as Hydrostor, a developer of utility-scale long duration energy storage projects, are now bringing multi-gigawatt-hour facilities into operation using technologies designed for decades-long lifetimes. Alongside deployments now coming online in China, these projects reinforce the same conclusion.

LDES is no longer experimental. It is being built at scale, with economics that hold up in real power systems.

The implications…

Climate

Without long duration storage, high-renewables grids remain structurally dependent on fossil backup.

Midday abundance is wasted.
Evening scarcity is fossil-fuelled.
Emissions flatten instead of falling.

LDES allows renewable electricity generated during periods of excess to displace fossil generation hours or days later. That is what turns clean power from intermittent contributor into firm backbone.

Net-zero systems do not fail at noon.
They fail after sunset.

Security

Energy security is no longer about fuel stockpiles. It is about flexibility.

LDES converts domestic renewables into strategic assets, reducing exposure to volatile fuel markets and dampening price shocks. Grids gain autonomy over time, not just capacity.

China’s deployment pace reflects this logic. Alongside a national target of 180 GW of new energy storage capacity by 2027, its investment in multi-gigawatt-hour LDES shows a clear understanding that future power systems are defined by temporal control, not surplus generation.

Affordability

Volatility is expensive. Storage reduces it.

LDES cuts system costs over the long term by reducing curtailment, stabilising wholesale prices, deferring transmission upgrades, and shrinking reliance on underutilised peaking plants.

India’s “round-the-clock” renewable tenders demonstrate this clearly. Hybrid projects combining renewables with long duration storage have cleared below the cost of new coal generation. In one 900 MW project, utilities are saving roughly USD 360 million per year compared to fossil alternatives.

This is not climate charity.
It is cost discipline.

Resilience

Climate impacts are lengthening outages and deepening stress events.

LDES provides temporal resilience: multi-day backup, seasonal balancing, and the ability to absorb shocks without defaulting to diesel generation or emergency imports.

Resilient decarbonisation is not about perfection.
It is about staying functional.

Lifetimes matter more than capex

Lithium-ion batteries have been transformative, but they are short-lived by infrastructure standards. Most grid-scale systems are engineered for 10–15 years, with degradation and replacement built into their economics.

LDES technologies are engineered differently.

Compressed-air systems, pumped storage variants, and thermal energy storage assets are designed for 40–60 years of operation, with refurbishable mechanical components rather than wholesale replacement.

When capital costs are amortised over decades, LDES stops looking like “expensive storage” and starts behaving like infrastructure.

Batteries optimise hours.
LDES optimises systems.

What actually unlocks deployment

Long duration energy storage is no longer constrained by physics. It is constrained by market design.

Three regulatory nudges matter most:

1. Pay for availability, not just arbitrage
Most power markets reward short-term price spreads. That favours four-hour batteries and undervalues assets designed to deliver multi-day or seasonal value. LDES needs revenue frameworks that reward capacity, duration, and reliability.

2. Provide long-term certainty
LDES projects have long development cycles and multi-decade lifetimes. Long-term contracts, technology-neutral capacity mechanisms, and clear asset definitions reduce financing costs far more effectively than short-term incentives.

3. Plan for time explicitly
Grid planning still assumes dispatchable thermal supply. That assumption no longer holds. LDES enables transmission deferral and system optimisation, but only if it is integrated early rather than bolted on later.

A reality check on deployment

China is building LDES as strategic infrastructure, prioritising scale and speed. Europe understands the system problem acutely but is slowed by fragmented markets and permitting. The United States has innovation and capital, but lacks a consistent national framework that values long-duration flexibility across regions.

The lesson is simple. The jurisdictions that align regulation with system reality first will lock in advantages that compound for decades.

The signal of change

LDES is no longer waiting for validation.

Compressed-air systems are operating at multi-gigawatt-hour scale. Pumped storage designs are evolving. Thermal systems are already decarbonising industrial heat.

As renewable penetration rises, costs fall, and asset lifetimes stretch across generations, the conclusion becomes unavoidable.

Long duration energy storage is not optional.
It is structural.

Closing the loop

Back to that summer day.

At midday, clean electricity floods the grid and is thrown away.
By evening, fossil plants fill the gap.

That is the failure mode of a system without time-shifting.

LDES changes the sequence. Energy generated when it is abundant is delivered when it is scarce. Prices stabilise. Emissions fall. Grids behave.

The technology works.
The economics are lining up.
The need is accelerating.

What remains is regulatory intent.

Long duration energy storage does not make headlines when it works.
It makes systems function.

And that is why it will define the next phase of the energy transition.

Photo credit Casey Fleser on Flickr

The post Why Long Duration Energy Storage Has Finally Reached Scale appeared first on Tom Raftery.com.

Earlier this year, a European manufacturer passed its ESG audit and still lost a major customer.

No scandal. No greenwashing accusation. The numbers looked fine. Policies in place. Targets declared. All the right acronyms.

But when procurement teams dug one level deeper and asked for supplier-level emissions data, the answers blurred. Industry averages. Assumptions. Proxies stacked on proxies.

The ESG report survived.

The commercial relationship didn’t.

That’s the shift we’re living through.

ESG reporting has moved from narrative to infrastructure. It now underpins how capital flows, how supply chains are selected, how insurance is priced, and how reputations are formed. And within ESG, one dimension is emerging as the credibility bottleneck.

Scope 3.

Not because it’s fashionable. Because it’s where complexity, exposure, and reality collide.

The Data Says…

Start with scale.

According to the GHG Protocol, Scope 3 emissions typically represent three quarters or more of a company’s total footprint in manufacturing, food, retail, pharma, automotive, and consumer goods. That’s not an edge case. That’s the core.

Now zoom out to ESG as a whole.

The EU’s Corporate Sustainability Reporting Directive expands mandatory ESG reporting to tens of thousands of companies, explicitly requiring consistency, traceability, and auditability across environmental, social, and governance metrics. This isn’t storytelling anymore. It’s financial-grade disclosure.

At the same time, financial institutions are aligning ESG data with risk models. The World Economic Forum’s 2025 Global Risks analysis flags unreliable supply chain data as a material threat to asset valuation, resilience planning, and credit assessment.

This is where Scope 3 matters disproportionately.

Environmental metrics fail without it.

Social metrics weaken without it.

Governance claims unravel without it.

Because Scope 3 is where companies confront what they don’t directly control, but absolutely depend on.

In several mid-sized firms I’ve spoken to recently, ESG reporting didn’t collapse under regulatory scrutiny. It collapsed under customer scrutiny, when buyers realised that supplier data quality varied wildly beneath polished dashboards.

The Implications…

Broadening to ESG reveals something important.

Scope 3 isn’t just an environmental reporting problem. It’s a systems problem that cuts across all three ESG pillars.

Environmental: From Targets to Physics

Scope 1 and 2 are largely operational. Scope 3 is structural.

If your products rely on carbon-intensive materials, distant manufacturing, fragile logistics routes, or opaque subcontracting, no amount of operational efficiency offsets that exposure. ESG strategies that avoid Scope 3 look neat. They also look unfinished.

Social: Labour, Safety, and Trust

The same supplier visibility needed for emissions is often the visibility needed for labour practices, food safety, conflict minerals, and quality control.

Companies chasing social compliance without understanding their supply networks are flying blind. ESG failures rarely announce themselves as ESG failures. They arrive as recalls, shortages, strikes, or reputational damage.

Governance: Accountability Without Control

Boards are increasingly asked to sign off on ESG disclosures that rely on data several layers removed from the organisation.

That tension is growing. Governance credibility now depends on whether leaders can say, honestly, we know how this data was generated and where it breaks down.

And this is where investors and insurers are paying attention.

Inaccurate ESG data isn’t neutral. It’s mispriced risk.

Why Scope 3 Is Becoming the ESG Fault Line

There’s a reason Scope 3 is where ESG strategies either mature or unravel.

It forces trade-offs.

You can’t optimise everything simultaneously. Cost. Speed. Resilience. Emissions. Labour conditions. Something has to give, and Scope 3 data makes those compromises visible.

It also exposes cultural gaps.

Sustainability teams often understand the issue. Procurement teams feel the pressure. Finance teams want ROI clarity. Operations teams want simplicity. Scope 3 sits in the overlap, which is why progress stalls without alignment.

Most importantly, Scope 3 reveals whether ESG is integrated or decorative.

If ESG lives in a report, Scope 3 stays fuzzy.

If ESG lives in decision-making, Scope 3 sharpens fast.

The Strategies…

Companies making real progress on ESG reporting tend to converge on a few pragmatic moves.

Treat ESG Data Like Core Business Data

If emissions, labour practices, or supplier risk data can’t be reconciled with ERP, procurement, or finance systems, it won’t survive scrutiny.

The shift underway is simple but profound. ESG data is moving out of spreadsheets and into operational workflows.

That’s uncomfortable. It’s also unavoidable.

Prioritise Materiality Over Completeness

Not every ESG metric matters equally.

Leaders who get traction focus on the handful of categories that dominate impact and risk, especially in Scope 3. Purchased goods. Transport. Key raw materials. Critical suppliers.

Depth beats breadth early on.

Reframe Supplier Engagement

Suppliers aren’t obstacles. They’re capacity constrained.

The most effective ESG programmes reduce reporting burden by aligning requests, reusing datasets, and offering something back. Credible data. Better forecasting. Preferred supplier status. Long-term contracts.

Engagement beats enforcement.

Use Technology Where It Changes Behaviour

AI and automation help when they reduce friction, flag anomalies, or surface decision options.

They don’t help when they add layers of abstraction.

The goal isn’t perfect data. It’s good enough data, fast enough, to change decisions.

The Signals of Change…

You can see the direction of travel clearly now.

Banks are asking ESG questions during refinancing, not after.

Insurers are pricing climate and supply chain risk together.

Large buyers are embedding ESG thresholds into procurement criteria.

Mid-sized firms with credible Scope 3 data are punching above their weight.

And inside organisations, ESG teams are being pulled closer to operations, finance, and risk. Not because the world got nicer, but because uncertainty got expensive.

Interestingly, in one case discussed recently on my podcast, a company discovered that its biggest emissions hotspot was also its biggest logistics inefficiency. Fixing one solved both. ESG became a performance tool, not a reporting chore.

That’s the real signal.

Closing the Loop

The company that lost its customer didn’t fail an ESG standard. It failed a credibility test.

That’s where we are now.

ESG reporting is no longer about demonstrating intent. It’s about demonstrating control, or at least honest visibility, across systems you rely on but don’t own.

Scope 3 sits at the centre of that challenge. Messy. Inconvenient. Essential.

The upside is that companies who face it early don’t just reduce emissions. They build sturdier supply chains, clearer governance, and more defensible strategies.

The downside is pretending ESG can stay cosmetic.

It can’t.

And the market has stopped pretending too.

The post Why Poor ESG Data Is Now a Business Liability appeared first on Tom Raftery.com.

At 12:33pm on an otherwise unremarkable weekday on the 29th of April last year, the Iberian Peninsula went dark.

Factories stalled mid-process. Data centres flipped to emergency protocols. Offices froze, literally and figuratively. Lifts stopped between floors. Phones filled with variations of the same question: what just happened?

This wasn’t a generation failure. Solar was plentiful. Wind was doing its job. The problem was coordination. Flexibility. A grid built for a centralised, fossil-heavy past, now straining under decentralised supply and electrified demand.

And in boardrooms across Spain and Portugal, something shifted.

Electricity stopped being background noise.
It became a variable.
A volatile one.

Since then, conversations with business leaders globally have changed. Less talk of sustainability optics. More talk of exposure. Of continuity. Of cost predictability.

Which helps explain why renewable Power Purchase Agreements, particularly solar paired with battery energy storage, are moving rapidly from “interesting option” to core operating infrastructure.

Not because companies want to become energy developers.

But because volatility is expensive, outages are existential, and fossil-indexed power markets have shown they’re no longer fit for modern business planning.

The data says… this is cheaper, dispatchable, and off your balance sheet

Let’s start with the fundamentals.

Solar is now the cheapest form of new electricity generation ever recorded. According to the IEA’s 2025 renewables update, utility-scale solar undercuts new fossil generation in almost every region, even before subsidies are considered.

But the real inflection point comes when solar is paired with batteries.

Battery costs have fallen by roughly 50% in the past two years, and the IEA expects global battery capacity to grow six-fold by 2030, driven primarily by grid flexibility and commercial deployments.

This is already visible in real systems.

Ember’s 2025 analysis shows that solar met 61% of total US electricity demand growth last year, with batteries increasingly shifting that power into evening peaks, when electricity is most constrained and most expensive.

That changes the equation.

Solar plus storage is no longer just cheap electricity.
It’s dispatchable, predictable electricity.

And here’s the part that matters most to CFOs and boards:

For most companies, these systems require zero upfront capital.

No capex.
No balance-sheet strain.
No depreciation headaches.

Developers finance, build, own, and operate the assets. Companies sign long-term PPAs and pay a fixed opex charge for electricity, typically lower than utility tariffs from day one, and insulated from wholesale price swings for 15–25 years.

Cheaper power.
Predictable costs.
Capital preserved for the core business.

That’s not a climate story.
That’s a finance story.

The implications… energy risk has escaped the utility department

Three structural forces are colliding.

Affordability is no longer forecastable

For decades, electricity prices wobbled but behaved.

That era is over.

Gas-indexed markets delivered volatility that made budgeting speculative. In parts of Europe, industrial power prices doubled and tripled within months. CFOs discovered that “market exposure” is another way of saying “open-ended risk”.

Solar + storage PPAs replace that chaos with known costs. Fixed opex. Long-term visibility. Predictability becomes the product.

And crucially, it’s achieved without tying up capital.

Security has overtaken climate as the entry point

Climate targets still matter. But energy security now opens doors climate arguments never could.

Geopolitical shocks. Transmission congestion. Extreme weather. Data centres competing with industry for capacity. All point to the same conclusion: relying solely on distant generation and overstretched grids is an operational gamble.

Behind-the-meter solar and storage don’t eliminate grid dependence. But they reduce it materially.

And they do so without asking companies to become utilities.

Resilience is now engineered, not improvised

Resilience used to mean diesel generators and crossed fingers.

Today, it means batteries, islanding capability, and intelligent load control.

Solar + BESS systems do double duty. Under normal conditions, they lower operating costs and arbitrage tariffs. Under stress, they keep critical operations running.

That dual value proposition, combined with opex-only economics, explains why storage now appears in almost every serious corporate energy discussion.

A critical shift: these systems don’t just protect companies, they stabilise the grid

This still isn’t being said loudly enough.

Solar, batteries, and microgrids don’t merely avoid grid stress. They actively remove it.

When businesses deploy behind-the-meter solar and storage:

• Peak demand is reduced at precisely the worst moments
  Batteries discharge during heatwaves and cold snaps, exactly when grids strain and fossil peaker plants would otherwise fire up at extreme cost.
• Transmission congestion eases without new infrastructure
  Local generation means fewer electrons forcing their way through overloaded corridors, deferring upgrades that take years and political alignment to deliver.
• Flexibility appears instantly
  Batteries respond in milliseconds. Gas plants don’t. Emergency legislation certainly doesn’t.

This isn’t altruism.
It’s physics.

Electricity arbitrage, often misunderstood as gaming the system, is in fact the system working properly. Charging when power is abundant and cheap. Discharging when it’s scarce and expensive. Flattening peaks. Smoothing volatility.

That’s why grid operators increasingly pay batteries and flexible loads for frequency regulation, congestion relief, capacity availability, and demand response.

Companies with solar + BESS aren’t freeloading on the grid. They’re becoming distributed grid assets.

Interestingly, in several markets, commercial-scale batteries already respond faster to grid disturbances than traditional spinning reserves, meaning ordinary business sites now perform functions once reserved for national infrastructure.

This is national energy security, just decentralised

Here’s the strategic leap worth making explicit.

A power system with:

• thousands of commercial batteries,
• millions of distributed solar installations,
• islandable microgrids around factories, hospitals, and data centres

is harder to break, harder to attack, and faster to recover.

Centralised systems fail big.
Distributed systems fail gracefully.

From cyber risk to climate extremes to fuel supply shocks, decentralisation buys optionality. And optionality is the currency of resilience.

Governments need to understand this. Grid operators understand it. Defence planners certainly do.

What’s lagging is corporate recognition that private, opex-driven investment is now underwriting public grid stability.

The trade-offs… because this isn’t a free lunch

Solar + BESS PPAs solve a lot of problems. They do not solve all of them. And pretending otherwise is how projects die in procurement, legal, or the CFO’s office.

Here are the real downsides.

Long-term contracts cut both ways

PPAs are long. Fifteen, twenty, sometimes twenty-five years.

That duration enables low prices and zero upfront cost. But it does assume a degree of stability in your footprint.

If a site closes early, relocates, or dramatically changes load, unwinding a PPA can be painful.

The risk isn’t contract length. The risk is signing one without thinking hard about how the business might evolve.

Escalators matter

Many PPAs include annual price escalators, typically 1–3%.

In a world of perpetually rising prices, that’s fine. In a world of rapidly falling renewable costs, it deserves scrutiny.

Comparing PPA pricing to today’s spot prices misses the point. The real comparison is against risk-adjusted future prices, including volatility, scarcity pricing, and grid charges that rarely fall.

Escalators should be negotiated. Flat pricing, capped escalation, or partial indexation are increasingly achievable. If escalation is treated as non-negotiable, that’s a warning sign.

You give up upside by not owning the asset

This is true, and it’s worth stating plainly.

Owning solar and storage outright can deliver higher lifetime returns, especially if you can capture tax incentives and depreciation.

But ownership also brings capex, performance risk, maintenance, insurance, compliance, and asset management for decades.

PPAs trade maximum theoretical return for certainty, simplicity, and capital preservation. For many organisations, that’s a rational choice.

Creditworthiness is required

Because the developer is funding the asset, your balance sheet matters.

Strong credit is often a prerequisite, particularly for long-tenor contracts. That can be a barrier for smaller firms, though aggregation and portfolio structures are widening access.

It’s a constraint, not a flaw. But it needs to be acknowledged upfront.

Batteries add complexity

Storage is transformative. It also complicates things.

Batteries require space, fire safety approvals, and sometimes higher insurance premiums. They can lengthen permitting and interconnection timelines.

This isn’t a reason to avoid storage. It’s a reason to plan properly and work with partners who’ve done this before.

The risk isn’t batteries.
It’s underestimating the friction around them.

The strategies… what leaders should actually do next

Strip away the slogans. Four actions matter.

Start with load, not targets

Before press releases or vendor decks, understand your demand profile in painful detail.

Hourly load. Seasonal swings. Electrification plans. Growth trajectories.

The best PPA outcomes come from companies that know their energy use better than anyone else.

Treat PPAs as operating infrastructure

A twenty-year PPA is not a transaction. It’s a service contract.

Developers carry the capex and operational risk. You pay for delivered electricity, typically at a lower cost than utility supply.

That alignment is why this model scales.

Add storage early, not eventually

Waiting for batteries to get cheaper feels sensible. It usually isn’t.

Storage unlocks tariff optimisation, resilience, and grid services revenue. Designing for it upfront avoids expensive retrofits and lost optionality.

Design for microgrids, even if you never island

You may never fully disconnect from the grid. That’s fine.

But systems designed to be islandable are inherently more valuable. They future-proof sites against grid stress, regulation, and climate shocks.

Microgrids aren’t ideology.
They’re contingency planning delivered as opex.

Closing: back to that blackout

When the lights came back on across Spain last spring, nothing fundamental had changed. The grid was still fragile. Demand was still rising. Electrification was still accelerating.

But perception shifted.

Energy stopped being invisible.

Solar + storage PPAs aren’t a silver bullet. They don’t fix grids overnight. They don’t eliminate risk entirely. But they move companies from exposure to agency.

From price-takers to planners.
From hoping the grid holds to helping it do so.
From capex anxiety to predictable opex.

Quietly, this is how systems change.

Photo credit Brookhaven National Laboratory on Flickr

The post When the Grid Became the Risk: Why Businesses Are Turning to Solar + Storage PPAs appeared first on Tom Raftery.com.

Insurance renewals. Premiums up. Coverage narrowed. In some cases, quietly withdrawn. Flood risk. Heat risk. Fire risk. Pick your flavour of climate reality.

At the same time, cities are still building. More homes. More data centres. More transport infrastructure. More everything.

And almost all of it relies on the same material we’ve used, with barely a rethink, for over a century.

Concrete.

It is the backbone of modern civilisation. It is also one of climate’s least cooperative accomplices.

The construction industry is finally starting to accept that these two facts cannot coexist forever. Progress is real. But it is slow. Too slow. And the gap between what is technically possible and what is being deployed at scale is now the real problem.

This matters because concrete is not a niche issue. It is a systems issue. Climate. Security. Affordability. Resilience. All four converge here, whether the industry likes it or not.

The data says… this is not a rounding error

Let’s ground this in numbers, not vibes.

According to the Global Cement and Concrete Association and reiterated by the IEA, cement and concrete account for roughly 7–8% of global CO₂ emissions. That is more than aviation and shipping combined. It is not energy use in buildings. It is the material itself.

As Ana Luisa Vaz explained on the Climate Confident podcast, producing cement emits CO₂ in two ways. First, by burning fuel at extreme temperatures. Second, and more stubbornly, through chemistry. Calcining limestone releases CO₂ by design. Even a fully electrified kiln does not solve that problem.

Globally, we pour over 30 billion tonnes of concrete every year. Urbanisation alone is expected to add the equivalent of a city the size of Paris every week through to 2050. The idea that we can decarbonise the economy while leaving concrete mostly untouched is fantasy.

Meanwhile, the built environment as a whole contributes close to 40% of global emissions when operational and embodied carbon are combined, as discussed with Tommy Linstroth in another Climate Confident episode recently. Concrete is the single largest slice of the embodied portion.

The uncomfortable truth is this. Even if we electrify everything else perfectly, cement will still blow the carbon budget unless it changes.

The implications… why this hits boardrooms, not just job sites

This is no longer an NGO talking point. It is a balance-sheet issue.

Climate: Every tonne of conventional cement locks in emissions that cannot be clawed back later. Embodied carbon is front-loaded. You emit it before the building even opens its doors.

Security: Cement supply chains are deeply exposed to geopolitics. Limestone, energy inputs, and transport all matter. As Europe learned the hard way with gas, material dependency is a strategic risk.

Affordability: Carbon pricing is no longer theoretical. EU ETS expansion, CBAM, and city-level carbon reporting rules mean embodied emissions will increasingly show up as real costs. Buildings that ignore this now will be penalised later.

Resilience: Climate stress does not just damage buildings. It stresses supply chains. Floods shut quarries. Heatwaves disrupt production. A material system that assumes stability is designing for a past that no longer exists.

This is why regulators are moving. LEED Version 5, for example, puts embodied carbon at the centre of green building standards rather than treating it as an optional extra. As Tommy Linstroth noted, you no longer “fall into” high-performance buildings by accident.

And yet, the industry response remains cautious. Conservative, even. Understandably so. When structures fail, people die. No one is asking engineers to gamble.

But safety and inertia are not the same thing.

The strategies… what actually needs to happen next

There is no single silver bullet for concrete. Anyone selling one is selling nonsense. The pathway is plural. Messy. Incremental. But very real.

1. Reduce clinker content aggressively

Lower-carbon concrete mixes already exist. Supplementary cementitious materials like fly ash, slag, calcined clays, and limestone fillers can reduce emissions significantly. The barrier is not physics. It is standards, procurement habits, and risk aversion.

2. Electrify where it helps, accept where it doesn’t

Electrifying kilns reduces fuel emissions. It does nothing for process emissions. Both truths can coexist. Pretending otherwise wastes time.

3. Lock carbon into materials, permanently

This is where mineralisation technologies come in.

Companies like Paebbl use accelerated mineralisation to bind captured CO₂ into solid carbonates that partially replace cement. The carbon is chemically locked in, not temporarily absorbed. Buildings become storage.

Paebbl is not alone.

• CarbonCure injects captured CO₂ into fresh concrete, improving strength while storing carbon.
• Solidia has created technology that alters cement chemistry to reduce calcination emissions and absorb CO₂ during curing.
• Blue Planet mineralises CO₂ into synthetic aggregates.
• CarbiCrete replaces cement entirely in some applications using steel slag and carbon curing.

Different approaches. Different trade-offs. Same direction of travel.

4. Use digital tools to collapse learning cycles

Sensors, digital twins, and AI-assisted materials modelling are not hype here. They reduce the time it takes to prove safety, durability, and performance. As Ana Luisa Vaz described, testing cycles that once took years are being compressed dramatically.

That matters in a conservative industry. Evidence beats persuasion.

5. Align regulation with innovation speed

Standards must protect safety without freezing progress. That means regulators engaging earlier with material innovators, not years after deployment elsewhere. Being an enabler is now a climate strategy.

The signal of change… this is no longer hypothetical

For all the frustration, the shift is underway.

Municipalities are demanding lower-carbon materials in public procurement. Developers are benchmarking embodied emissions because tenants and investors are asking. Major corporates are funding pilots, not just press releases.

Paebbl has already delivered multiple commercial pilot projects. CarbonCure concrete has been poured in tens of thousands of buildings globally. LEED Version 5 formalises what leading projects were already doing.

Perhaps most importantly, the conversation has moved.

Ten years ago, sustainable construction meant better insulation and LED lighting. Necessary, but insufficient. Today, embodied carbon is front and centre. That is progress.

It is also overdue.

Keep in mind, the concrete used in today’s buildings will still be standing when most of today’s net-zero pledges have been forgotten. Materials outlive politics. That alone should sharpen priorities.

Closing: back to those insurance letters

Those insurance letters are signals, not anomalies.

They are the market pricing in physical risk faster than regulation ever could. Buildings designed without climate reality in mind are becoming liabilities, not assets.

Concrete will not disappear. Nor should it. But the way we make it must change, fast.

The construction industry is waking up. Slowly. The challenge now is not awareness. It is pace.

Because climate physics does not wait for conservative sectors to feel comfortable.

The post Concrete’s Carbon Problem and the Race to Fix It appeared first on Tom Raftery.com.