The ‘Energy Trilemma’ And The Cost Of Electricity – OpEd - Highlighted Article

From: Eurasia Review

By: Dr. Lars Schernikau

Date: January 17, 2024

The ‘Energy Trilemma’ And The Cost Of Electricity – OpEd

Why “Renewables” cannot save but cost Billions

Over the last 150 years, abundant electricity from coal and gas led to an unprecedented reduction in poverty, as well as an increase in longevity and health. Currently, these low cost, reliable power sources generate approximately 60% of electricity and 50% of primary energy worldwide. Primarily due to climate change concerns, coal and gas fuels are now slowly replaced by ‘renewables’, such as wind and solar based energy. But this comes with a cost.

Bloomberg issued their latest global Levelized Cost of Electricity (1) (LCOE) analysis in 2023, comparing the historical LCOE of various ‘renewables’ with the cost of coal, gas, and nuclear, drawing a misleading conclusion of wind and solar being most cost-effective (Figure 1). LCOE based reports and analyses also by other organizations such as IEA, IRENA, IEEFA, IMF, Agora, form the basis for many governments to mistakenly conclude that the transition from a coal and gas based power system to wind and solar will save billions, if not trillions at global scale.

Political decision makers know the three pillars of a successful energy policy (a) reliability, (b) affordability, and (c) environmental sustainability. But when taking a closer look, it becomes apparent that, power ministries are struggling to find a balance within this ‘Energy Trilemma’ and moreover, that the three pillars follow a specific priority:

As a prime concern, access to reliable energy is needed, before considering the affordability thereof. Once the balance between reliable and affordable energy is achieved, only then environmental sustainability can be tackled in a meaningful way.

Claiming “renewable” energy from wind and solar is cheap and comes without environmental consequences, is a crucial and detrimental energy economic misunderstanding.(continue reading)

The ‘Energy Trilemma’ And The Cost Of Electricity – OpEd