The Power Crunch Just Made Renewables Stronger

The Power Crunch Just Made Renewables Stronger

A few months ago, it looked like a cascading global power crunch was about to turn back the tide of the energy transition.

In China, shortages of coal drove prices of solid fuel to 1,908.20 yuan per metric ton ($299.29), leading to power cuts and industrial shutdowns as generators refused to sell fixed-tariff power at a loss. In Europe, the great sucking sound as coal-starved Asian grids vacuumed up liquefied natural gas combined with weak supplies from Russia and the Netherlands to send gas prices soaring. They’ve now hit 146.93 euros ($165.74) per megawatt hour, more than six times their level at the start of the year.

On the eve of the COP26 climate change conference in November, these ructions led to dire warnings: The shift to zero-carbon energy was being led by well-meaning naivety, rather than a sober consideration of what a 21st century power system needs. The energy transition would now have to go into reverse to provide the secure electricity the world requires.

With the year drawing to an end, those prognostications don’t appear to be panning out. If anything, the power crunch seems to be accelerating the push away from fuel-based energy, whose volatile prices caused this crisis, and