• Nicolas Polfer
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Energy transition at a tipping point: energy abundance or energy poverty?

Néckel Polfer – 25.05.2024

Relying solely on renewable energy such as wind and solar will lead to energy scarcity, argues Néckel Polfer.

Over the past 200 years, humanity has experienced an unprecedented growth in wealth, made possible by the exploitation of fossil fuels and by technological advances. Today, every citizen of the world has on average 700 times as much usable energy at their disposal as our ancestors did at the beginning of the 19th century (1).

However, energy consumption is very unequally distributed. In terms of per-capita consumption, Luxembourg ranks tenth in the world, even ahead of the USA (2). Each of us therefore has three times as much energy available as every Chinese person, ten times as much as every Indian, and more than 30 times as much as every Nigerian. Because these countries are also developing further, energy consumption will grow substantially over the coming decades.

Over the past 20 years, the share of renewable energy (wind, hydro, solar, biomass) in total global energy consumption has roughly doubled, from about seven to 14 percent (3). The share of fossil fuels, however, remains above 80 percent; the remainder (four percent) is accounted for by nuclear power.

A transition to new energy sources must take place, if only because fossil fuels will eventually be exhausted. So the question is not whether wind and solar will play a role in the energy transition. The real question is whether this transition can be achieved in Europe within two decades exclusively using solar, wind, and storage, as some propagate. Such a strategy will lead to energy scarcity, which in turn will hit the most socially vulnerable members of society the hardest.

The economics of energy sources

The energy wealth of a civilization depends on how easily energy can be extracted. To make energy usable, an energy investment must first be made. To harness solar energy, for example, solar panels must be manufactured; here, above all, the production of pure silicon is very energy-intensive.

It is estimated that a modern solar module in Germany pays back its energy investment within 1.5 years. With an (optimistically) estimated lifespan of 30 years, a solar cell would therefore have produced 20 times as much energy as was needed to produce the cell. This is referred to as an "energy return" of 1:20 (4). For wind energy, the energy return is estimated to be as high as 1:25.

Fossil fuels have an average energy return of 1:30, so renewables have already made up a lot of ground compared to established fossil energy sources. However, renewables are unlikely to make similar improvements in the future. Moreover, this calculation does not yet take into account the storage of renewable energy.

A major advantage of fossil fuels is the fact that they are already stored energy, and are thus always available on demand when needed. Because of reduced solar power production in winter and periods of low wind, long-term storage of renewables is essential; but here the losses are high, as is the case, for example, with "green" hydrogen.

Reducing solar energy's return from 1:20 to 1:2

Because not enough green hydrogen can be produced in Europe, the German government is actually seriously considering to produce green hydrogen using solar energy in Australia (!) and then transport it to Germany (5); this would reduce the energy return of solar power from 1:20 to 1:2 (about 90 percent losses). The Roman Empire already had an energy return of 1:2 some 2,000 years ago (1); it is clear that such a society would be much poorer than our society today.

By contrast, nuclear energy stands out with a very high energy return of 1:75. Because of strict safety requirements, nuclear power is not cheap, and final disposal of the waste requires difficult political solutions. Nonetheless, it ranks among the most efficient energy sources, and one that is also low in CO₂.

The consequences of energy scarcity

The war in Ukraine and the resulting shortage of Russian gas plunged the German chemical industry into a full-fledged crisis — this shows how energy scarcity affects the economy. In addition, the high German electricity prices (caused by the energy transition) are placing a burden on households and industry. The social costs of an energy-poor future are foreseeable: de-industrialization and less purchasing power, especially for those on lower incomes.

There is also the question of energy security. By 2035 at the latest, Germany's coal power plants are supposed to be taken off the grid for good, but the construction of gas power plants is being delayed. It is risky that our society is becoming ever more dependent on electricity, while energy security is given so little emphasis at the same time. In this context, the inadequate expansion of the power grid must also be mentioned, along with the simultaneous boom in electric cars and heat pumps. All these developments make the power grid less stable, and therefore increase the likelihood of brownouts or even blackouts.

The energy transition stands at a tipping point. Investments in energy infrastructure are expensive and must be planned over decades. That is why it is so important that decisions be well thought through. Nothing less than our future is at stake.