Energy Transition: A balancing act of Capital, Climate and Constraints.

In case you want to listen to this as a podcast - I have generated a relatively natural sounding one using google podcasts - HERE

Energy Transition: A balancing act of Capital, Climate and Constraints.

1. Introduction: A World at an Energy Crossroads

How can the world sustain an accelerating transition to clean energy while one of its largest economies swerves off course? This question hangs heavy since January 2025, when the United States – a key driver of recent climate progress – abruptly reversed direction under a new administration.

The return of President Donald Trump, who took office in January 2025, has ushered in a stark policy U-turn. Aggressive federal support for clean energy, embodied in 2022’s landmark Inflation Reduction Act (IRA), has given way to fossil-fuel boosterism and rolled-back incentives. In an echo of his 2017–2020 term, Trump has moved swiftly to “unleash” domestic oil, gas, and coal while stripping support from renewables and electric vehicles. This whiplash in U.S. climate policy introduces profound uncertainty at a delicate moment in the global transition. The world had only begun to believe a tipping point was at hand – annual clean energy investment eclipsing $2 trillion and far outpacing new fossil fuel investment – when a major player hit the brakes.

This “article”, “passion project”, “documentation of my rabbit hole journey”, whatever you wanna call it, is a deeply analytical look at the evolving dynamics of these massive capital flows and emerging supply chain constraints, with special emphasis on changes since Trump assumed office in January 2025. We will examine how record-high clean energy investments (now roughly $2.1–2.2 trillion per year in 2024–25, about double the money going into fossil fuel) are reshaping the energy landscape, and how new political decisions are altering the trajectory. We will analyze the Trump administration’s early actions – from repealing parts of the IRA and cutting clean energy tax incentives to reopening public lands for drilling and provoking trade clashes – and assess how these moves are reshaping U.S. climate leadership and investor confidence. I also want to address the global ripple effects, including shifts in where clean tech manufacturing and finance may migrate, and heightened uncertainty for projects worldwide.

Crucially, its going to be imperative to talk about supply chain bottlenecks and constraints that have come to the forefront: escalating trade frictions with China, new bottlenecks in permitting and transmission, regulatory fragmentation across markets, the quest for secure supplies of critical minerals, shortages of skilled labor, and even environmental opposition at local levels. Each of these factors could pump the brakes on the transition just when it needs to accelerate. Internationally, we compare how other regions are responding – from Europe’s efforts to uphold its Green Deal amid U.S. retrenchment, to China’s dominant clean tech manufacturing (and its weaponization of that dominance in trade disputes), to the struggles of developing nations left behind in investment and capacity.

Throughout the report (yeah I think I am going to call it - report), we prioritize analysis of key technologies – solar, wind, batteries, hydrogen, small modular reactors, carbon capture, grids – weighing their cost per watt, scalability, material needs, and geopolitical vulnerabilities. This approach helps identify which solutions are most ready to scale and which could become chokepoints due to resource or supply chain issues. The narrative is enriched with recent data, policy documents, corporate announcements, and macroeconomic trends to ensure a fully up-to-date picture (as of mid-2025).

In structured format, we first detail the surge of global clean energy investment and its composition (Section 2). Next, we examine the Trump administration’s policy reversals in detail (Section 3) and then the global consequences of these shifts (Section 4), including supply chain stresses and international developments. In Section 5, we delve into comparative developments in the EU, China, and the Global South. Finally, Section 6 provides a technology-by-technology assessment of priorities and vulnerabilities.

The stakes are enormous: the world’s ability to meet climate targets and modernize energy systems hangs in the balance. Will the momentum of the transition prove resilient to policy setbacks and bottlenecks? Or will the coming years be defined by delays and fragmented progress? The following analysis seeks to answer these questions with comprehensive evidence and insight.

2. Surge in Global Clean Energy Investment (2024–25)

The past two years have seen an extraordinary surge in global investment toward the energy transition. After decades of gradual build-up, annual capital spending on clean energy technologies has reached record levels, eclipsing investment in fossil fuels by roughly 2-to-1. 

This financial momentum suggests that market forces and policy support have, until recently, been aligning worldwide to turbocharge renewable energy, electrified transport, and associated infrastructure. In 2024, global investment in the low-carbon energy transition hit an all-time high of about $2.1 trillion, up 11% from the previous year. To put this in perspective, that means the world is now spending over $6 billion every day on deploying cleaner energy systems – a remarkable pivot from the fossil-fuel-dominated investment patterns of the past.

This torrent of finance is not only large – it’s also broad-based across sectors. Electrified transport and renewable energy are the two largest areas of investment, together accounting for the majority of the $2.1 trillion. In 2024, about $757 billion flowed into electric vehicles and related charging infrastructure, a 20% jump over 2023 as EV sales continued to soar. Another $728 billion went into renewable power projects – spanning wind farms, solar parks, bioenergy, geothermal and more – marking a record high for renewables investment (about 8% higher than in 2023). These figures re flect unprecedented deployment of clean generation and electric mobility worldwide. For perspective, the EV investment alone in 2024 (over $750 billion) roughly equaled the total global investment in all clean energy just a decade earlier.

Significant capital is also being directed into the often-overlooked backbone of the transition: electricity grids. In 2024, over $390 billion was invested in expanding and upgrading transmission and distribution networks globally. That represents roughly 15% growth in grid spending year-on-year, as nations recognize that “no transition can succeed without transmission.” Strong grids are needed to integrate the surge of new renewable capacity and to handle rising electricity demand from EVs, heat pumps, and data centers. Yet grid investment remains a known bottleneck – a topic we will revisit in detail (Section 4.3).

While funding for these mature clean technologies (renewables, EVs, storage, and grids) reached new heights, it’s noteworthy that emerging climate technologies struggled to attract the same growth in 2024. According to BloombergNEF, investment in less-established solutions – such as hydrogen, carbon capture and storage (CCS), advanced nuclear, and clean industrial processes – actually fell by 23%, totaling only about $155 billion worldwide in 2024. Early-stage sectors face challenges around commercial viability and policy support, which have made investors cautious. As BNEF analysts noted, proven sectors with clear business models have drawn nearly all the financing, while nascent technologies “are not likely to have any meaningful impact on emissions by the end of the decade” unless public and private sectors do much more to de-risk them. This is a sobering reminder that even $2 trillion a year is not yet being allocated optimally for long-term deep decarbonization – most money is going into the low-hanging fruit (solar, wind, EVs) rather than the harder, still-expensive solutions needed for heavy industry, aviation, or long-duration storage.

Regional dynamics of investment have shifted as well. China has cemented itself as by far the largest player in clean energy finance. In 2024, China alone accounted for roughly $818 billion – nearly 40% of total global energy transition investment. This was an astounding 20% jump in Chinese investment from the year before, meaning China contributed about two-thirds of the entire world’s growth in clean energy spending in 2024. By contrast, the United States, European Union, and United Kingdom – which had all seen major surges in 2023 – hit a plateau or declined. U.S. clean energy investment was essentially flat in 2024 at $338 billion, while the EU actually saw a dip to around $375 billion, and the UK fell to about $65 billion. In fact, China’s single-country total ($818 billion) exceeded the combined investment of the U.S., EU, and UK in 2024. Other contributors included India (up 13% to ~$35 billion) and Canada (up 19% to ~$25 billion). These figures highlight a concerning trend: while China is accelerating, some Western markets stalled in 2024, even before accounting for the U.S. policy reversals of 2025. Europe’s slight downturn may reflect the tailing off of post-Covid stimulus and the impact of the 2022 energy crisis, while the U.S. plateau in 2024 came despite the IRA’s boost – a possible harbinger that investor enthusiasm was hitting limits or awaiting clearer signals.

Another critical dimension is the distribution of investment between developed and developing countries. An analysis by the International Energy Agency underscored a major imbalance: most clean energy spending is concentrated in wealthier markets (North America, Europe, China), with only about 15% of global clean energy investment occurring in emerging and developing economies (excluding China).

This reflects the high cost of capital and greater perceived risks in developing countries, which deter needed investments. As the World Economic Forum observed, “the high cost of capital is holding back the development of new projects” in emerging economies. In other words, money is flowing at record levels, but not to all the places it’s most needed. Regions like sub-Saharan Africa, South Asia, and parts of Latin America account for a tiny sliver of renewable investment, even though they often face the worst energy access deficits and climate vulnerability. This raises the specter of an inequitable transition – a topic we explore later (Sections 5.3 and 4.1). For now, it is enough to note that by mid-decade, a de facto two-speed energy transition is emerging: a capital-rich transition in the Global North and China, versus a capital-starved transition in much of the Global South. What's clear is that the world is adding more renewable capacity than ever, yet global emissions have not decisively turned downward, and fossil fuel consumption remains near record highs. Fatih Birol, head of the IEA, noted in 2024 that while clean investment surges, 81% of global energy still came from fossil fuels – the same share as 30 years ago, thanks to rising overall energy demand. Are we, then, in an energy transition or simply an energy expansion?.

3. U.S. Policy Whiplash Under Trump 2.0: Undermining Climate Investment

No development has cast a longer shadow over the energy transition in 2025 than the abrupt change in U.S. federal policy with the inauguration of President Trump. In the span of a few months, the United States has moved from being a growth engine of clean energy investment (thanks to 2022’s IRA) to a source of uncertainty and retrenchment. Trump’s early actions have targeted the very pillars of America’s recent climate strategy – freezing or repealing clean energy funding and aggressively promoting fossil fuel production. This section examines Trump’s key policy moves in his first half-year back in office, and how they are reshaping U.S. climate and investment leadership. The picture that emerges seems to be one of deliberate destabilization: a climate law under siege, incentives slashed, and a “drill, baby, drill” ethos back at the center of U.S. energy policy. We also explore the domestic fallout and legal pushback, as well as how these moves intersect with trade policy and international climate commitments.

3.1 Sabotaging the Inflation Reduction Act: Freezes, Rollbacks, and Litigation

The Inflation Reduction Act of 2022 was the most ambitious climate investment law in U.S. history, providing over $369 billion in clean energy incentives and funding a vast array of programs to cut emissions. By late 2024, the IRA had spurred a factory-building boom and a pipeline of renewable projects across America. All of that was put at risk on January 20, 2025, when President Trump, on his first day back in the White House, took aim at the IRA with a sweeping executive order. Executive Order 14154, titled “Unleashing American Energy,” directed all federal agencies to immediately halt disbursement of funds from the IRA (and the 2021 infrastructure law) and to review every related grant, loan, or contract. In effect, Trump tried to single-handedly freeze the climate law’s implementation. The Columbia Law School’s Sabin Center for Climate Change Law described the situation bluntly: “the President of the United States is determined to undermine the Inflation Reduction Act… the administration’s interference with IRA implementation has had drastic implications for climate action”.

Because the IRA’s programs were deeply embedded across 16 federal agencies and at least 119 distinct climate-related provisions, this across-the-board freeze was chaotic. Agencies were ordered (via a January OMB memorandum M-25-13) to “temporarily pause all activities” related to IRA funds, especially anything that could be linked (in the order’s parlance) to the “green new deal”. Overnight, grant recipients and project developers found their federal support in limbo. By late January, many awardees under IRA programs reported they “were unable to access their funding” – a situation that persisted for weeks. Some agencies went further: the Environmental Protection Agency, for instance, took the extraordinary step of canceling $20 billion in grants that had already been awarded under the IRA’s Greenhouse Gas Reduction Fund (a program to capitalize national and local clean energy financing institutions). The EPA justified terminating these grants with “baseless accusations of program-wide fraud and misalignment with current priorities”, a move now being fought out in court.

One slight silver lining: the administration has selectively spared or restarted certain IRA-funded programs when politically expedient. For instance, facing pressure from farm-state constituencies, the U.S. Department of Agriculture in March released a frozen tranche of $20 million for IRA-funded conservation contracts with farmers, stating it would “honor contracts that were already made directly to farmers”. This indicates Trump’s team is calibrating its rollback – honoring programs that benefit key political groups (e.g. rural farmers) while gutting those it ideologically opposes (e.g. grants for community solar or environmental justice). But overall, by the 100-day mark of Trump’s term, the IRA had been hacked at from all sides, prompting Sabin Center analysts to conclude that “one thing is crystal clear: [Trump] is determined to undermine the Inflation Reduction Act”.

3.2 “One Big Beautiful Bill”: Slashing Clean Energy Tax Incentives

Parallel to the executive branch’s assault on IRA implementation, Trump and Republican allies in Congress moved to legislatively gut the law’s clean energy tax credits. The vehicle for this was an expansive budget reconciliation package, ironically nicknamed the “One Big Beautiful Bill” Act, which the GOP majority ushered through by the narrowest of margins in June 2025. On July 4, 2025, President Trump signed this bill into law with great fanfare – and the impacts on clean energy were immediate and far-reaching. “Coal is back,” Trump declared triumphantly at the signing ceremony. Surrounded by lawmakers on the White House lawn, he derided wind power (“Wind – it doesn’t work, I’ll tell you”) and celebrated the rollback of what he viewed as Biden’s excessive green subsidies.

In concrete terms, the new law dramatically scales back or eliminates many of the IRA’s tax credits for clean energy projects. It places tighter restrictions and earlier phase-outs on the core incentives that had been driving U.S. wind and solar expansion. Notably, the bill shortens the timeframe for the IRA’s marquee clean electricity production (45Y) and investment (48E) credits, requiring projects to be placed in service by 2027 to qualify (much sooner than IRA’s original 2030s horizon). It also terminates the residential solar tax credit (Section 25D) after 2025 – meaning homeowners will lose the 30% credit for rooftop solar installations beyond this year. Furthermore, the law ends several electric vehicle credits as of September 30, 2025. In one swoop, the U.S. has signaled that federal support for solar rooftops, wind farms, and electric cars will expire years earlier than previously planned.

Clean energy industries and analysts warn these changes could be devastating. The Princeton ZERO Lab’s REPEAT Project analyzed the legislation and found it would likely cut capital investment in U.S. electricity generation and clean fuel production by about $500 billion over the next decade relative to prior law. By 2035, that translates into a loss of roughly 140 GW of new solar capacity and 160 GW of wind capacity that would have been added but now may not materialize. For context, 300 GW is almost the entire current U.S. renewables fleet – essentially, an entire cycle of clean power build-out could be forfeited. The REPEAT analysis also projected the bill will raise U.S. household and business energy expenditures by $28 billion annually in 2030 (due to higher reliance on more expensive or volatile fossil energy). These stark numbers underscore that pulling back incentives doesn’t just slow clean energy; it can impose economy-wide costs via higher fuel and electricity prices in the long run.

The political battle around these cuts was intense. The budget bill squeaked through the House by a single vote, and even some Republican lawmakers from clean-energy-benefiting states voiced concern. A group of GOP senators from states like North Carolina, Alaska, Utah, and Kansas wrote in April that repealing the tax credits “would disrupt investment” and “damage our states’ economies”, urging moderation. But hardliners in the House Freedom Caucus insisted on deep cuts. In fact, they extracted a promise from Trump: in exchange for their support of the bill, the President would use executive powers to further “phase out” any remaining clean energy subsidies that the legislation didn’t kill. Representative Ralph Norman recounted that Trump personally assured them he’d target “Solar panels, wind and… electric vehicles” and, intriguingly, would tackle issues “particularly with getting permits”. This hints that beyond federal funding, the administration may lean on permitting and regulatory obstacles to stymie renewables (for instance, potentially using federal authority to slow-walk or deny permits for offshore wind farms or transmission lines that primarily carry renewable power).

Already, data points to a flurry of canceled or delayed clean energy investments in the U.S. in 2025, totaling over $14 billion by mid-year. These include high-profile examples like the cancellation of a $1.3 billion EV battery factory in Arizona (Kore Power) and an EV parts manufacturer (BorgWarner) closing two facilities in Michigan. Companies explicitly cited the policy uncertainty and the possibility that tax credits would vanish as reasons to pull back. E2 (Environmental Entrepreneurs) has been tracking such announcements and found that “cancellations now total $15.5 billion since January [2025]; nearly 12,000 jobs lost” as a direct consequence of the changed federal stance. This reversal is particularly bitter in Republican-led states that have ironically been big beneficiaries of clean energy investment. A Reuters analysis noted that roughly 75% of announced IRA-related clean energy manufacturing investments were in red (Republican) states. States like Utah, Texas, and Tennessee have seen billions in new solar, battery, and EV factories. Now those very projects (like the PanelClaw solar component plant in Utah, or a Fluence battery factory) face an uncertain future. The CEO of PanelClaw warned that if the credits are removed, “we could essentially shut [our new factories] down… the market would go away”. Similarly, a solar developer in Utah said the rollback “would threaten [our] 15 GW pipeline” of projects and undercut tens of millions in tax revenue for a rural county transitioning from coal.

3.3 “Drill, Baby, Drill”: Reopening the Fossil Fuel Spigots

Concurrent with dismantling support for clean energy, the Trump administration has moved aggressively to expand fossil fuel development. This was a core pledge of Trump’s 2024 campaign – to restore what he called American “energy dominance” by maximizing oil, gas, and coal output – and it has been pursued with zeal in early 2025. On Inauguration Day, alongside the IRA funding halt, Trump declared a “national energy emergency” forwarding a raft of executive actions favoring fossil fuels. This dramatic proclamation set the tone: climate change was out, energy (read: fossil) abundance was in. “Drill, baby, drill” – once a campaign slogan – effectively became official policy again.

One of the first concrete moves was to reverse protections on federal lands and waters that were off-limits to drilling and mining. In March 2025, Interior Secretary Doug Burgum traveled to Alaska to announce the reversal of a late-2024 Biden order that had banned new oil and gas leasing in a 23-million-acre portion of the National Petroleum Reserve–Alaska (NPR-A). This vast Arctic wilderness, west of Prudhoe Bay, had been set aside for conservation of critical habitat, but the Trump team framed the moratorium as federal overreach “undermining our ability to harness domestic resources”. By June 2025, the administration formally opened millions of acres in Alaska to drilling and mining, stating that “obstruction over production” was ending. Environmental groups decried the move as sacrificing one of the wildest, most sensitive ecosystems – home to caribou herds and polar bears – for the sake of a short-term oil rush. “This is another outrageous attempt to sell off public lands to oil industry billionaires,” said the director of the Alaska Wilderness League.

Similarly, Trump moved to ‘un-ban’ offshore drilling that had been restricted. In late 2024, the outgoing Biden administration had used executive authority to bar new oil/gas leasing in around 625 million acres of federal offshore waters (in the Atlantic, Pacific, and Eastern Gulf) for the next decades – a conservation step cheered by environmentalists. Upon taking office, Trump officials blasted this as a threat to energy security and set about undoing it. As of mid-2025, they have initiated processes to resume leasing in the Gulf of Mexico and are exploring legal avenues to overturn or work around Biden’s offshore ban (though completely reversing it may require new legislation or lengthy court fights). The Arctic National Wildlife Refuge (ANWR) in Alaska – where Biden had suspended drilling leases that Trump’s first term had opened – is also back in play. In April, Trump signed an order revoking Biden’s actions that halted oil exploration in ANWR’s coastal plain. In effect, every major fossil fuel frontier that was closed is being flung open again, from Arctic tundra to outer continental shelf.

These actions are being justified in familiar terms: bolstering energy independence, lowering fuel prices, and creating jobs in extractive industries. Burgum, the Interior Secretary, argued that under Biden “production was sacrificed” and that now America must exploit its abundant reserves to ensure affordable energy. The administration also touts the economic benefits for states like Alaska – noting, for example, that oil revenues fund 90% of Alaska’s budget. However, the climate implications are dire. Expanding fossil extraction today locks in new carbon emissions for decades, at a time when the IEA and IPCC have warned no new oil or gas fields can be developed if we are to limit warming to 1.5–2°C.

3.4 Trade Wars and Retreat from Climate Cooperation

A final piece of the Trump policy shift puzzle is the arena of trade and international engagement, which significantly affects supply chains for clean energy. True to form, President Trump wasted no time reviving a confrontational trade stance toward China – a stance with direct implications for clean tech manufacturing and critical minerals. In late January 2025, the administration escalated tariffs on Chinese goods and sought to decouple supply chains, echoing and exceeding the trade war of Trump’s first term. By April 2025, the U.S.–China trade conflict had reached fever pitch: President Trump had hiked tariffs on Chinese imports to levels never seen before (a peak “baseline” tariff of 145% on all Chinese goods), and China had retaliated with its own blanket tariffs up to 125% on U.S. exports. The tit-for-tat moves happened in dizzying succession – 20% tariffs, then 54%, then breaking into triple digits almost overnight. Such extreme tariff rates, even if partially rolled back later, created whiplash for global supply chains. For clean energy sectors, this meant massive uncertainty around the cost and availability of imported components like solar panels, battery cells, wind turbine parts, and raw materials, many of which come from China or are processed there.

China, for its part, wielded a powerful lever: its dominance in critical mineral supply. In January 2025, Beijing responded to U.S. pressure by imposing export controls on a range of minerals – including rare earth elements like bismuth, indium, molybdenum, tungsten, and tellurium – citing national security concerns. These minerals are used in everything from semiconductors to solar panels and military hardware. Then in April 2025, as the tariff war crescendoed, China went further: it required special export licenses for seven key rare earths (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium) and high-performance rare earth magnets. The message was clear: if the U.S. chokes China’s exports via tariffs, China will choke the supply of materials the U.S. (and its allies) need. Rare earth magnets are vital for EV motors and wind turbine generators (neodymium-iron-boron magnets), and China produces the vast majority of these magnets and their constituent elements. Similarly, in late 2024 China had already announced limits on graphite exports (essential for lithium-ion battery anodes) and had banned exports of gallium and germanium (critical for solar panels, LEDs, and defense tech). By mid-2025, this “weaponization” of clean tech supply chains was in full swing. As one headline put it, “China’s rare earth export controls are good for Beijing, bad for everyone else”, because they strengthen China’s leverage in negotiations.

For the global energy transition, this trade conflict is a double-edged sword. On one hand, it spurs efforts in the U.S. and Europe to onshore or “friend-shore” their supply chains for solar, batteries, and critical minerals – potentially building more resilient, diversified production over time. Indeed, Trump’s own order about boosting rare earth mining hints at trying to seize this moment to develop domestic mines. The U.S. is also invoking the Defense Production Act and partnering with allies (like Australia, Canada) to secure supplies of lithium, cobalt, and rare earths outside of China. On the other hand, these measures take years, and in the meantime, trade friction can cause immediate shortages and price spikes for essential components, delaying projects. Already, developers are reporting difficulty sourcing transformers and grid equipment (much imported from overseas) due to both supply chain bottlenecks and new trade barriers – a topic we will cover in Section 4.3. Moreover, if clean tech becomes another front in a prolonged U.S.–China cold war, it could bifurcate the global market: for instance, Chinese EV makers may face tariffs in Western markets (the EU launched an anti-subsidy probe in 2024; the U.S. already effectively bars Chinese-made EVs via the IRA rules), and Western companies might find it hard to export to China. This kind of regulatory fragmentation – where different blocs have incompatible standards or trade restrictions – can slow innovation and raise costs across the board.

Trump’s trade policy extends beyond China. The administration’s general approach is nationalist and protectionist, which includes withdrawing from cooperative climate efforts on the global stage. In his first term, Trump famously pulled the U.S. out of the Paris Agreement (only for Biden to rejoin in 2021). While as of mid-2025 the U.S. has not formally exited Paris again, it has essentially abandoned its Paris emissions targets and climate finance commitments. For example, under Biden, the U.S. had pledged to cut emissions ~50% by 2030 and to contribute $11 billion per year to international climate finance by 2024. The Trump administration is almost certain to renege on these pledges. Early indications show U.S. negotiators obstructing ambitious language in international forums and stripping climate considerations out of trade and development discussions. The Administration has also weakened or withdrawn support for multilateral climate funds– an analysis of budget documents indicates plans to zero out remaining contributions to the Green Climate Fund and other UN climate initiatives (consistent with Trump’s approach in the 2010s). This retreat from climate cooperation could have ripple effects: other countries might also ease off their commitments, or lose trust in the U.S. as a partner in technology sharing and climate finance.

One tangible effect is on the Global South’s investment climate. Many developing countries were counting on funds and technical support catalyzed by the U.S. and other G7 nations to implement their clean energy goals. If that leadership vanishes, some projects may never materialize. As Section 5.3 will discuss, emerging economies already struggle with high financing costs; a U.S. pullback exacerbates the gap. Furthermore, on trade, if the U.S. and China remain at loggerheads, developing countries might suffer collateral damage – e.g., high tariffs could reduce the availability of cheap Chinese solar panels in Africa, or Chinese restrictions could make batteries costlier in India.

Domestically in the U.S., state governments and private sector players are attempting to fill some gaps left by federal reversal. Multiple states (e.g. California, New York) reaffirmed their commitment to aggressive clean energy targets and have even increased state-level incentives to keep projects moving. Some red states, interestingly, are also voicing support for the clean industries now in their backyard – creating a political tension within the Republican coalition (as seen with Utah’s Senator Mitt Romney and Rep. John Curtis defending IRA-driven jobs in Utah, or Texas cautiously backing its massive wind and solar sector). Large corporations continue to invest in renewables to meet ESG goals or to lock in cheap power prices, regardless of federal stance. These subnational and market forces can buffer, but likely not fully offset, the effect of hostile federal policy.

4. Global Consequences: Capital Reallocations and Supply Chain Strains

The shockwaves from the U.S. policy reversal are being felt worldwide. In this section, we assess how Trump’s early actions – combined with existing challenges – are influencing global clean tech investment patterns and exacerbating supply chain constraints. The key questions are: Will other countries and companies step up to fill the void left by U.S. retrenchment, or will global momentum falter? And how are trade frictions and bottlenecks in permitting, materials, and labor complicating the execution of energy transition projects?

4.1 Capital on the Move: Shifts in Investment and Investor Sentiment

One immediate consequence of the uncertainty in the U.S. is a potential reallocation of capital geographically. Renewable energy developers, manufacturers, and financiers are all re-evaluating their strategies in light of the massive U.S. market becoming less hospitable. Investment that was earmarked for U.S. projects is now at risk of moving abroad or being put on hold. By mid-2025, over $14 billion in specific clean energy projects in the U.S. have been canceled or delayed due to fears that federal credits will vanish and markets will shrink. For example, the planned Kore Power lithium battery gigafactory in Arizona (a $1.25 billion investment) was scrapped in early 2025 once it became clear the IRA’s lucrative battery production credit might be curtailed. Likewise, BorgWarner, a major automotive supplier, announced closure of two EV component manufacturing sites in Michigan, citing the changed policy environment. These are not isolated incidents – the advocacy group E2 has tallied over 16 clean energy projects abandoned in just the first quarter of 2025, amounting to nearly 7,800 lost jobs and billions in economic value that would have primarily benefited Republican-leaning states.

Where will this capital go instead? In some cases, companies may redirect it to friendlier shores. Europe, for instance, has been actively courting clean tech investment through its EU Green Deal Industrial Plan, which offers easier state aid and a more predictable regulatory framework for clean industries. It’s plausible that a battery manufacturer that nixed U.S. plans might expand in Germany or Hungary instead (where generous subsidies and access to EU markets beckon). Similarly, India and Southeast Asian countries could see more solar and electronics manufacturing investment as firms look to diversify out of China while avoiding U.S. trade turbulence. Canada and Mexico – USMCA partners – might also attract facilities that originally aimed for the U.S. market, since they still offer proximity and free trade access to the U.S. if rules of origin can be met. Indeed, if the U.S. imposes strict “Buy American” or FEOC rules, some companies may find it easier to build just north or south of the border and hope for exemptions or to supply other markets.

Meanwhile, Europe and China may fill some of the leadership void in climate finance. The EU, despite its own challenges, has reaffirmed many of its commitments (like climate finance contributions to developing nations and strengthened emissions targets via the Fit for 55 package). China continues to invest heavily domestically and abroad (though often in fossil as well as clean projects under its Belt and Road Initiative). Notably, as the U.S. pulls back from multilateral climate funding, Europeans and other G7 members are discussing topping up institutions like the Green Climate Fund to cover some gaps – but budget constraints make that tough. Wealthy oil states (like some in the Gulf) have also begun positioning themselves as clean energy investors (for example, the UAE investing in renewables projects in Africa). These shifts suggest that while global investment in clean energy might still rise in aggregate (the IEA projects global energy investment to reach $3.3 trillion in 2025 with clean tech accounting for over two-thirds), the geography of that investment could tilt even more heavily toward a few regions – especially China and Europe – if the U.S. slows down.

Investor sentiment has clearly been dented by U.S. developments. The phrase “policy uncertainty” is anathema to financiers, and the U.S. has unfortunately become Exhibit A of that risk. This could lead to a higher risk premium on U.S. clean energy projects (translating to requiring a higher return on equity or interest rate, which makes fewer projects financially viable). Some investors might opt to deploy capital in Europe or Asia where policies seem more stable or, in China’s case, where the state guarantees massive domestic demand for clean tech (despite other risks). Global clean energy investment could thus shift to where policy is predictable and supportive. An irony is that U.S. states with strong policies (like California’s renewable mandate or New York’s climate law) might still attract investment, but the overall national branding has taken a hit.

It’s worth noting that global capital is not infinite nor perfectly flexible. If the world loses the U.S. as a robust market, it might simply mean the total pie of clean investment grows more slowly. For example, European renewable developers that had planned big expansions in the U.S. (to take advantage of IRA credits) may not automatically build more in Europe instead – they may just scale back growth plans. Some large European energy companies (BP, Orsted, Iberdrola, etc.) invested heavily in U.S. offshore wind and solar; now some of those projects are in jeopardy, and the companies may incur losses or write-downs which actually reduce their capacity to invest elsewhere in the near term. We’ve seen hints of this: Orsted (a Danish offshore wind giant) warned in 2024 that U.S. policy uncertainty, combined with inflation, could impair its projects, and indeed a few Northeast U.S. offshore wind contracts were canceled or renegotiated due to worsened economics. A less-discussed but crucial point is macroeconomic conditions: with interest rates still relatively high globally (as central banks fight residual inflation), the cost of financing renewable projects has risen in the past two years. In emerging markets, rates in 2023–25 often exceeded 10%, stalling many projects. If, on top of that, climate policy support wanes, investors may decide to park money in safer assets rather than in long-horizon infrastructure projects.

In developing countries, the U.S. retreat from climate finance and trade tensions could further deter investment. Consider a solar farm in sub-Saharan Africa: it might rely on low-cost Chinese panels (now subject to potential export license delays) and hoped-for concessional finance from a U.S.-backed development bank (now less likely to prioritize climate). The result may be that the project doesn’t get built, and the country sticks with the status quo (e.g. diesel generators or coal power). The World Economic Forum flagged that “developing nations are being left out of the renewable energy transition” in part because of financing hurdles. That risk increases if global cooperation frays – one country pulling back can have an outsized chilling effect.

On the other hand, there is some resilience in the system. Clean energy often makes economic sense now even without subsidies – solar and wind are the cheapest new power sources in many regions, and EVs are competitive in total cost of ownership. So investment won’t collapse simply due to U.S. policy; it might re-route or slow, but the overall transition has strong market drivers.

Will the energy transition prove to be “too far along to fail,” continuing under its own economic momentum? Many in the industry believe that despite temporary setbacks, the train has left the station – the cost declines and technological progress of the past decade have created an irreversible shift. For example, over 90% of the world’s new power capacity additions in 2023 were renewable, not fossil. Once solar and wind underbid coal and gas routinely, as they do in much of the world, investment logic will favor them regardless of politics. Indeed, the IEA noted in 2024 that even with slower growth, investment in clean energy was “far exceeding” that in fossil fuels, and this trend is likely to continue absent a major shock.

4.2 Bottlenecks: Permitting, Infrastructure, and “Slow Pipes”

As trillions of dollars chase new energy infrastructure, a sobering reality has surfaced: money alone can’t overcome certain bottlenecks in time. Chief among these are permitting delays and grid infrastructure limitations. Around the world, projects are encountering long waits for approvals and connections, which threaten to slow the deployment rate needed for climate goals. The International Energy Agency warns that transmission grid expansion is struggling to keep pace with surging electricity demand and renewable additions, due to permitting and supply chain challenges. In advanced economies, it commonly takes 8–10 years to permit and build major high-voltage power lines – by which time many proposed wind/solar farms have given up or been canceled. This is an acute problem in the U.S. (where an immense backlog of over 1,600 GW of proposed solar and wind projects are stuck awaiting grid interconnection) but it’s also an issue in Europe (e.g. Germany’s north-south transmission lines have been delayed for over a decade by local opposition and regulatory hurdles) and other regions. “No transition without transmission,” as the saying goes – and right now, transmission is a bottleneck.

Even when permits are granted, key equipment shortages are emerging. A striking example is large power transformers, the workhorse devices that connect generation to the grid. Demand for these transformers has spiked with grid expansions, but supply is tight. Procurement lead times for the biggest transformers have stretched to 3–4 years, about double what they were in 2021. Manufacturers (mostly in a few countries like Germany, South Korea, and China) are at capacity. Similar delays afflict high-voltage cables: orders for specialized subsea cables (needed for offshore wind farms and inter-island links) now face 5+ year lead times. The IEA reports that prices for essential grid components have skyrocketed – in real terms, transformer prices are ~75% higher than in 2019, and cable costs nearly double. This inflation is partly due to commodity prices (copper, steel) and partly due to sheer demand outpacing supply. It’s a global issue – grid developers in India, Brazil, the EU, and the U.S. are all chasing the same limited global manufacturing capacity for these components.

Furthermore, the permitting remains the primary cause of delays. In the EU, despite the Green Deal, it often takes 5–7 years to permit a wind farm due to environmental assessments and local objections. Recognizing this, the EU in 2023 passed a law designating renewables projects as being “in the overriding public interest” to streamline permits, but implementation is uneven. In the U.S., attempts to reform permitting rules have been mired in political fights – ironically, both fossil and renewable projects suffer from slow permitting under different laws (pipelines under NEPA and state reviews; power lines under a mix of state/federal jurisdictions).

The focus seems to be on aiding fossil projects and perhaps transmission that facilitates fossil as well. Meanwhile, some red tape affecting renewables remains – e.g., in some states, local siting rules for wind/solar have grown more restrictive as opposition movements gained ground (there are at least 395 local ordinances in 41 states blocking or restricting renewables as of 2024). The Sabin Center found 378 renewable energy projects in 47 states have faced significant community opposition, a number that has grown rapidly in recent years. This “Not In My Backyard” (NIMBY) factor is now a serious constraint, especially for land-intensive projects like onshore wind or utility solar, and for transmission lines that often traverse multiple communities. Even in countries with more top-down governance, public pushback can delay projects (for instance, in India and China, land acquisition for transmission corridors has caused slower builds than planned).

Trade frictions, discussed earlier, also feed into these bottlenecks: if rare materials or components face export controls or tariffs, delivery times lengthen further. For example, when China restricted exports of power transformer cores or certain steel, U.S. utilities sounded alarms that replacing aging transformers (some lost to hurricanes) was taking dangerously long. Utility Dive recently reported that transformer shortages in the U.S. are reaching a point where grid reliability could suffer. Hurricanes or wildfires that wipe out hundreds of transformers could cause prolonged outages if replacements aren’t available. This highlights how supply chain bottlenecks are now a resilience issue, not just a climate issue. The electrification of everything (EVs, heat pumps, etc.) means demand on the grid is rising, but grid upgrades are lagging due to these constraints, creating vulnerabilities.

Globally, overcoming these “slow pipes” (both literal pipelines/power lines and figurative bureaucratic pipelines) will require coordinated policy effort: e.g., faster permitting processes, standardized designs for equipment to scale manufacturing, workforce training programs, and maybe even something akin to “Marshall Plans” for grid build-out in various regions. The EU’s Net-Zero Industry Act and discussions of an Electricity Grids Europe initiative show recognition of the issue – including a goal to double the rate of grid expansion. China has moved faster on grid; it built huge ultra-high-voltage (UHV) transmission projects in the 2010s to connect remote renewables to cities, often in ~5 years per line. But even China now faces delays on some lines due to land constraints and the sheer scale needed. The IEA concluded that to meet climate goals, annual global investment in transmission needs to rise to over $200 billion by the 2030s (from $140 billion in 2023), and more importantly, non-monetary barriers must come down.

In the U.S., a potential near-term outcome is a shift of focus: if big interregional lines are too slow, more projects will try to locate closer to demand to avoid transmission dependence (e.g., more distributed solar and batteries in cities, or offshore wind near coastal load centers rather than far-flung onshore wind). That can work to some extent but often at higher cost or less resource quality. Another outcome is higher curtailment of renewables – already, places like West Texas and Inner Mongolia have wind farms that sometimes produce power that can’t reach users due to grid limits, leading to wasted potential and lower return on investment.

4.3 Critical Minerals, Labor, and Local Opposition: Navigating the “Chokepoints”

Beyond grids and trade, the energy transition faces a trio of additional constraints that have intensified: the security of critical mineral supply, shortages of skilled labor, and increasing local opposition to projects. Each of these represents a chokepoint that, if not managed, could slow deployment and raise costs. We examine each in turn, noting recent developments.

Critical Minerals and Rare Earth Security: Modern clean energy technologies are far more mineral-intensive than the fossil fuel systems they replace. A typical electric car requires 6 times the mineral inputs of a conventional car (mostly in its battery). A wind turbine and a solar farm similarly consume large amounts of aluminum, copper, rare earth metals, and other materials per unit of energy. This has shifted energy security concerns from oil and gas supply to lithium, cobalt, nickel, copper, and rare earths supply. As discussed, China’s quasi-monopoly in some of these has become a strategic vulnerability for other nations. The scale of demand is daunting: by 2040, in a scenario aligned with Paris goals, the IEA projects a 4x increase in overall mineral demand from clean energy tech, with lithium demand growing 40-fold and graphite, cobalt, nickel 20-25x. Already by 2023, strains were visible – lithium prices spiked to nearly 10x their 2020 levels at one point (though they have since fluctuated), and cobalt and nickel saw volatility due to geopolitics (DRC instability, sanctions on Russia).

China’s moves to restrict exports of gallium, germanium, and rare earth magnets in 2024–25 were a wake-up call. For instance, 80-90% of the world’s processing of rare earth elements (which go into EV motors and wind turbines) occurs in China. If that processing is curtailed, countries can have rare earth mines (like the U.S. Mountain Pass mine) but still be unable to produce usable magnets. Recognizing this, Western governments are investing in alternative processing facilities (e.g., the U.S. and Australia are funding rare earth separation plants, and the EU is supporting recycling). But these efforts are nascent. In the meantime, companies are exploring workarounds and substitutions: EV makers are shifting some models to induction motors that don’t use rare earth magnets, and wind turbine manufacturers are trying to reduce or eliminate heavy rare earths like dysprosium in their designs. Similarly, battery makers are diversifying chemistries – moving some production to LFP (lithium iron phosphate) batteries which use no cobalt or nickel, thus easing dependence on those. We’ve seen LFP’s share of EV batteries rise sharply, largely thanks to Chinese innovation (CATL, BYD). Western automakers are now adopting LFP for standard-range vehicles too. These substitutions are promising, but they come with trade-offs (LFP has lower energy density, etc.) and don’t eliminate the need for lithium and graphite, where supply is tight.

The Trump administration’s approach to minerals is paradoxical: it emphasizes mining at home, which aligns with a long-term solution to supply security, but its trade wars worsen short-term supply pressures. For example, by stoking conflict with China, it might accelerate Chinese restrictions on exports of things like battery-grade graphite; the U.S. does not currently have any operating graphite anode material plants at scale – building those will take years. The administration is pushing to develop domestic mines for lithium in Nevada, rare earths in California, etc., and streamline permits (potentially invoking the Defense Production Act, as Biden did in 2022 for battery minerals). Yet local opposition to mining is significant too (e.g., Native American tribes and conservationists have protested the Lithium Americas Thacker Pass lithium mine in Nevada through lawsuits and rallies). The Project 2025 conservative roadmap specifically lists dozens of environmental protections to roll back to facilitate mining and drilling. If Trump succeeds in loosening mining regulations, that could help increase supply of some minerals down the road, but at the cost of environmental damage and controversy domestically – and likely facing legal challenges. Notably, a uranium mining ban near the Grand Canyon that Biden had enacted is also targeted for reversal by Trump allies, which ties into small modular reactor fuel supply (since new reactor designs need high-assay uranium partly sourced from abroad).

From a global perspective, other countries are jockeying to ensure access: Japan and the EU struck partnerships with resource-rich nations (e.g., with Kazakhstan for rare earths, with Chile for lithium, etc.), essentially trying to create an “allied supply chain” less reliant on China. Resource nationalism is also on the rise: Indonesia, for instance, banned export of raw nickel ore to force companies to build battery metal refineries domestically (which largely benefitted Chinese firms that set up shop there). Mexico nationalized its lithium resources in 2023. These moves complicate the picture – they may localize supply chains but could also reduce overall efficiency or deter investment if seen as risky.

Skilled Labor Shortages: The clean energy sector’s rapid growth has led to a hiring spree – and a gap in the availability of skilled workers. A report estimated a global shortfall of 7 million skilled workers for the energy transition by 2030 if current trends continue. These include engineers, electricians, welders, technicians, and other roles needed for renewable energy projects, grid upgrades, building retrofits, etc. In the U.S., the IRA had labor provisions (prevailing wage and apprenticeship requirements to get full tax credit value) to both ensure quality jobs and spur training. Ironically, with IRA rolled back, some momentum on apprenticeship programs might slow, but the underlying shortage remains. The American Clean Power Association reported that to meet expected project demand, the U.S. needs tens of thousands more electricians, wind technicians, solar installers than are currently in the pipeline. For instance, over 40,000 additional electricians will be needed in the next few years in the U.S. to wire all the EV chargers, solar panels, and grid equipment being installed. Europe faces similar gaps – e.g., Germany’s heat pump rollout has been slowed by a dearth of qualified HVAC installers; the UK’s offshore wind expansion could be constrained by too few maritime engineers and divers.

Labor shortages can delay project completion and drive up wages (which, while good for workers, can make projects more expensive and strain budgets). We already see renewable energy companies reporting wage inflation for craft labor. The flipside is this represents a huge job creation opportunity – globally, renewable energy jobs reached 16.2 million in 2023 (up from 12.7 million in 2021) and are set to keep rising. Clean energy now employs more people worldwide than fossil fuels (when including EV manufacturing). By 2030, clean energy jobs are projected to outnumber fossil jobs by a wide margin. But matching workforce skills to jobs is the challenge. Many fossil fuel workers can transition (e.g., oil rig workers becoming geothermal drillers, coal plant workers moving to battery factories or CCS projects) – but that requires retraining and not all skills are 1-to-1 transferable.

Notably, the Trump administration’s stance on workforce development for clean energy appears lukewarm. It has rescinded or weakened regulations that encouraged consideration of climate risks in the economy, and it emphasizes a return to fossil jobs (coal miners, pipeline construction, etc.). One could argue that by pushing fossil expansion, it may alleviate labor shortages in renewables by pulling some labor back to fossil projects – but that is not a real solution, just a reallocation that slows the transition. Meanwhile, states and private sectors are stepping in: unions and companies are expanding apprenticeship programs for electrical and construction trades focused on renewables (some, like RenewableWorks’ program, were catalyzed by the IRA’s requirements). The EU also launched initiatives like the “EU Solar PV Industry Alliance” which includes a skills agenda, and countries like Canada and the UK have introduced “Green Skills” training programs. These efforts will need scaling up dramatically. If they succeed, the labor shortage can be mitigated; if not, it becomes a hard cap on how fast projects can roll out, no matter the capital available.

Local Opposition and Environmental Backlash: As renewable infrastructure spreads, it ironically faces some of the same opposition that fossil projects long did – plus some unique challenges. Communities across nearly all 50 U.S. states have seen fights over wind turbines (due to aesthetics, noise, concerns about birds or property values) and large solar farms (land use concerns, impact on farmland). The Columbia University database documented nearly 400 local policies restricting renewables – such as strict setback requirements for wind turbines or moratoria on solar farms. The trend is global: in the Netherlands, onshore wind faced so much pushback that the government put a pause on new turbines unless municipalities agree; in France, solar farms in rural areas have been opposed by farmers and activists wanting to preserve countryside; in Kenya, a major wind project was entangled in legal disputes with local herders over land rights. Even transmission lines are unpopular – the term “Not In My Backyard (NIMBY)” has spawned variants like “BANANA” (Build Absolutely Nothing Anywhere Near Anyone) in describing extreme local resistance.

Some opposition is driven by genuine concerns: wind farms can kill birds and alter landscapes; mining for critical minerals can pollute water; large solar fields could displace agriculture or natural habitats. Environmental organizations find themselves in a quandary when a renewable project threatens biodiversity or cultural heritage. For example, a planned lithium mine might pit climate goal proponents against local indigenous groups protecting sacred land. These conflicts are intensifying. In Alaska, as noted, indigenous communities are fighting a proposed uranium mine that they fear could poison their environment. In Nevada, tribes are suing over the Thacker Pass lithium mine. Offshore wind projects in the U.S. northeast have encountered legal action from beachfront communities and fishing groups.

This “green vs. green” tension – renewable energy versus local environmental/social values – could slow the transition significantly if not addressed through better planning and community engagement. Solutions being tried include: Community benefit agreements (pay local residents or invest in local services in exchange for hosting a project); siting on disturbed lands (e.g., putting solar on brownfields or mine sites instead of pristine land); wildlife mitigation (like improved turbine siting and technology to reduce bird strikes); and giving communities a stake (co-ownership of projects). For instance, Denmark’s wind boom succeeded partly because local farmers and cooperatives were given ownership shares in turbines – they had skin in the game, so opposition was minimal. Emulating that model elsewhere could help. The EU’s Renewable Energy Directive now encourages “renewable energy communities” and streamlined procedures for them, to bolster acceptance.

However, time is short. If every project gets bogged down in multi-year legal battles, net-zero timelines will slip. There’s a rhetorical question often posed: “Will the green transition falter due to a thousand local roadblocks, even if national policy and economics are favorable?” The risk is real. One need only look at the example of high-speed rail in the U.S. (which has been stymied by local opposition and legal challenges) to see how infrastructure can be delayed indefinitely. Renewable energy must avoid that fate. There is growing recognition among climate advocates that community engagement and equitable transition are as important as technology and finance. The concept of a “Just Transition”stresses that communities should see tangible benefits and have a voice, so they do not feel projects are imposed on them for a global good while they bear local burdens.

5. Global Developments: Europe, China, and the Rest in a Shifting Landscape

While the United States recalibrates its approach, other major players in the global energy transition are navigating their own trajectories. In some cases, they are adapting to the new U.S. posture; in others, they forge ahead on independent paths shaped by regional imperatives. This section provides a comparative look at key developments in the European Union, China, and the developing world (Global South). We assess how each is dealing with the twin challenges of accelerating clean investment and managing constraints, and how U.S. policy shifts are influencing (or not influencing) their choices. We’ll see that Europe remains publicly committed to its Green Deal but faces economic and political headwinds; China continues its clean energy expansion and supply chain dominance, even as it weaponizes that dominance in trade disputes; and developing nations struggle with investment gaps and are seeking new alignments to avoid being left behind.

5.1 Europe: Upholding the Green Deal amid Economic and Political Crosswinds

The European Union entered 2025 still firmly rhetorically committed to its landmark European Green Deal, which aims to make Europe the first climate-neutral continent by 2050. Over the past few years, the EU has translated this vision into an array of binding policies: a strengthened Emissions Trading System (with a tighter cap and inclusion of shipping emissions), the Fit for 55 package targeting 55% emissions cuts by 2030, a ban on new combustion engine car sales from 2035 (with a controversial late exception for e-fuels at Germany’s insistence), and the launch of a Carbon Border Adjustment Mechanism (CBAM) to impose carbon costs on certain imports by 2026. In addition, reacting to the U.S. IRA, the EU rolled out its Green Deal Industrial Plan in early 2023, which relaxes state aid rules to allow members to subsidize domestic clean tech manufacturing, and reprograms EU funds toward clean tech. By July 2025, the EU is on track to implement a Net-Zero Industry Act to streamline permits for strategic clean tech projects and a Critical Raw Materials Act to ensure secure supplies (including setting targets to mine 10% and refine 40% of critical minerals domestically by 2030).

All this signals that Europe intends to continue leading on climate action, even if the U.S. federal government steps back. In fact, European officials openly criticized the U.S. rollbacks – for instance, EU climate chief Frans Timmermans lamented the “short-sighted” cuts to U.S. clean energy credits, while pledging Europe would stay the course. The EU also sees opportunity: European firms disadvantaged by the IRA’s local content rules might feel somewhat relieved if those are weakened or phased out, leveling the playing field. Nonetheless, Europe has its own challenges. The energy crisis of 2021–2022, triggered by Russia’s invasion of Ukraine and the curtailment of Russian gas supplies, rocked European economies. Gas and electricity prices soared in 2022, forcing emergency measures and a temporary return to coal in some countries to keep lights on. By 2025, that acute crisis has abated – gas storages are full, alternative suppliers (Norway, U.S. LNG, Qatar) have replaced most Russian gas, and prices have moderated. However, the shock left a legacy of higher inflation and concerns about industry competitiveness. European heavy industry (steel, chemicals) complains that high energy costs and stricter climate rules put them at a disadvantage vs. U.S. and Chinese rivals, especially now that the U.S. had the IRA (though now tempered) and China gives cheap energy to its industries. This led to the EU’s “carbon leakage” measures (like CBAM) and discussions of more state aid. But political cracks are evident: some member states and parties argue the EU should slow down on new climate regulations to prioritize economic recovery and avoid fueling populist backlash.

Indeed, Europe faces rising political polarization over climate policy. In several countries, right-wing or populist parties skeptical of or hostile to the Green agenda have gained support. For example, in the Netherlands, a farmer’s protest party (angry about emissions regulations on agriculture) surged in 2023 provincial elections, forcing the government to collapse and delaying climate-related farm reforms. In Germany, the far-right AfD (which opposes many Green Deal elements) has climbed in polls, attacking high costs of green policies. Even in Sweden and Finland, governments have shifted more conservative, with some dialing back climate ambitions (Sweden’s new govt removed a 2030 EV target, for instance). The EU Parliament elections in 2024 returned a more fragmented legislature, with Greens losing some seats and a slight rise in right-wing Euroskeptics who are less enthusiastic about climate measures. Although the main pro-EU centrist bloc remains in favor of climate action, they might moderate some proposals to maintain unity.

Despite these crosswinds, the EU in 2024–25 successfully updated key laws: it approved a law mandating 40% renewable energy in overall consumption by 2030 (up from 32%), and individual countries are racing to deploy. For instance, Spain and Germany hit records in renewable generation (Spain nearly 50% of power from renewables in 2024; Germany sometimes hitting 80% on windy/sunny days). France is belatedly embracing solar and wind (while also planning to build new nuclear reactors to maintain its low-carbon dominance). Eastern Europe is gradually pivoting – Poland, long reliant on coal, is now one of Europe’s biggest solar installers by number of systems (due to a vibrant rooftop solar program) and plans its first nuclear plant with U.S. technology. The UK, though outside the EU, similarly remains committed to net-zero by 2050 and banned new ICE car sales from 2030 (recently pushed to 2035 for some hybrids under political pressure). However, the UK government in 2025 did something noteworthy: it approved new North Sea oil and gas licenses and delayed certain green measures (like pushing back a ban on gas boilers) citing consumer cost concerns. This indicates even in Europe, high energy prices and wariness of voter backlash can slow the stride.

The Trump factor has a mixed impact on Europe. On one hand, EU leaders publicly reaffirm that someone must lead by example if the U.S. won’t. The EU doubled its climate finance for developing countries by 2025 (targeting €8 billion/year from EU budget, plus more from nations). On the other hand, European industries worry that if the U.S. has cheaper energy (by favoring fossil fuels in the short term) and less stringent rules, European companies could be disadvantaged. This may fuel louder calls from industry for the EU to relax things like the planned 100% emissions reduction for cars by 2035 or the pace of building renovations mandated by EU law. Already, Germany’s government in 2023 had to water down a law to ban new gas boilers by 2024 after public pushback – now it’s a more gradual phase-in. If the public perceives that Europe is “going green” while America returns to “drill, baby, drill,” it might undermine support for tough measures. Policymakers have been emphasizing that the EU’s path is not just altruistic for climate but smart economically (to avoid dependency on volatile fossil imports and to seize cleantech markets). The war in Ukraine solidified a consensus that renewables and efficiency = energy security. That argument still holds weight: the EU managed to cut its gas consumption by ~20% in 2022–23 and ramp up renewables to weather the crisis, which many see as vindication of clean energy, not a liability.

So, Europe as of 2025 seems poised to forge ahead, albeit at a careful pace, balancing climate ambition with economic realism. It aims to spur domestic cleantech manufacturing through subsidies (e.g., France and Germany have announced multi-billion-euro plans for battery gigafactories and hydrogen electrolysers, with several already under construction). The EU’s CBAM is in a trial phase in 2025, requiring importers of steel, fertilizer, etc., to report CO₂ content, with full levy to start by 2026 – this is a world-first carbon tariff system and could prompt other countries to strengthen their own climate policies to avoid fees on exports. Notably, if the U.S. is not pricing carbon but rather cutting green incentives, its exporters might face a disadvantage under CBAM unless a trade compromise is reached. There were talks of a U.S.–EU “Carbon Club” under Biden (to align carbon measures and avoid trade friction), but those have likely stalled under Trump. Still, CBAM will proceed, and it essentially says: if you don’t have climate policies, we’ll tax your goods at our border. This could be a subtle pressure on the U.S. in coming years – though enforcement might be politically tricky, and the EU might focus it more on obvious high-CO₂ sources like China or Russia.

5.2 China: Green Superpower – Manufacturing Might, Deployment at Scale, and Strategic Ambiguity

China’s role in the global energy transition is immense and multifaceted. It is simultaneously the world’s largest emitter (currently ~30% of global CO₂), the largest coal consumer and builder, and the undisputed leader in manufacturing and deploying clean energy technologies. China’s influence can hardly be overstated: it produces over 70% of the world’s solar PV panels, 50% of wind turbines, and about 80% of lithium-ion battery cells, along with refining the majority of critical minerals like lithium, cobalt, and rare earths. It also has the biggest market for EVs (roughly 60% of global EV sales in 2024 were in China) and adds more renewable power capacity each year than the rest of the world combined. In 2024, as noted, China invested roughly $818 billion in energy transition technologies – more than the U.S., EU, and UK combined. This included installing an eye-popping amount of renewables: preliminary figures suggest China added on the order of 100–120 GW of solar PV and 50–60 GW of windin 2024 alone, both records (the solar figure especially is unprecedented – China has been doubling its solar installations and is now approaching 500 GW cumulative solar installed). China’s government targets for 2030 – at least 1,200 GW of renewables – will likely be met well ahead of schedule.

China’s motives for this massive push are a mix of industrial strategy, energy security, and environmental concerns. The government sees clean tech as a pillar of economic growth and global influence – hence heavy subsidies and support for companies like CATL (batteries), LONGi (solar), and BYD (EVs). It also aims to reduce local air pollution, which has been a political issue domestically; transitioning to EVs and renewables helps clear smog. At the same time, China is not abandoning fossil fuels yet – energy security and economic stability mean China is still expanding coal power, albeit at a slower pace than renewables. In 2023, reports showed China permitted a surge of new coal plants (around 100 GW worth) as a “backup” to avoid power shortages, though many of these may run at low capacity factors. China’s official stance per President Xi’s pledges: peak CO₂ emissions by 2030 and achieve carbon neutrality by 2060. Many analysts believe China might peak emissions earlier (possibly mid-2020s) given the renewables boom, but the post-Covid economic stimulus did increase coal use. Currently, Chinese emissions are rising slightly as the economy grows, but emissions intensity (CO₂/GDP) is falling.

The weaponization of trade we discussed is an extension of China’s willingness to leverage its dominance. For years, China supplied the world with cheap solar panels, driving costs down over 80% in a decade – a boon for global adoption. But now that these technologies are strategic, China is asserting control. By restricting exports of certain minerals and equipment, it can hobble competitors or retaliate against sanctions. For example, after the U.S. cut off Huawei from advanced semiconductors, China’s gallium/germanium ban in 2024 was seen as tit-for-tat (those metals are critical for high-performance chips and military applications). The rare earth magnet export license rule in 2025 responded to Trump’s tariff escalations. China is basically saying: “We can play hardball too.” This is not new – back in 2010, China cut rare earth exports to Japan during a diplomatic spat, causing a price shock. But now the stakes are global decarbonization. Western governments are alarmed that if China, say, banned graphite exports next, global EV production could stall since nearly all battery-grade graphite is processed in China. However, China also risks overplaying its hand – if these restrictions are too severe, it could push the rest of the world to invest heavily in non-Chinese supply chains faster, eroding China’s market share in the long run. So far, China’s approach has been calibrated: they often announce export controls with some loopholes (licenses can be granted, presumably to friendly customers).

China’s sheer manufacturing scale has also made clean tech more affordable worldwide. For instance, the cost of EV batteries fell ~80% in the last decade, thanks largely to mass production by Chinese firms. Solar modules cost as little as $0.20/W now, again due to China-centric supply chains. While Western governments are uneasy about dependency, they also benefit from cheap imports to meet their own climate targets. Thus, there’s a love-hate dynamic: e.g., Europe slapped tariffs on Chinese solar panels in the 2010s but eventually removed them because Europe needed cheap panels to hit renewables goals. In 2023, the EU initiated an anti-subsidy investigation into Chinese EVs, worried that subsidized cheap Chinese cars (like those from BYD or Nio) could flood Europe and harm EU automakers. This is reminiscent of solar – if the EU imposes tariffs on Chinese EVs, it protects its industry but could slow EV adoption via higher prices. These dilemmas are playing out in many sectors, highlighting China’s pivotal role.

From a geopolitical standpoint, China is positioning itself as a leader in climate-friendly tech without necessarily being a climate policy leader. It has not committed to an absolute emission cut by 2030 (just a peak by then). It negotiates hard at UN climate talks to ensure its responsibilities as a “developing country” remain lower than those of the U.S./EU historically. But it also gains clout by being the supplier of solutions – essentially, countries need China’s goods to cut their emissions. For instance, India’s solar boom relies on Chinese panels; Africa’s nascent EV and solar markets similarly depend on low-cost Chinese products. In a sense, China has a lever: if relations sour too much, it could restrict exports and thereby slow others’ transitions, although that would also hurt its own economic interests.

Domestically, China is grappling with integrating so much renewable capacity. It’s building huge ultra-high-voltage transmission lines to ship power from resource-rich west (wind/solar) to load centers east. It’s also investing heavily in energy storage (both batteries and pumped hydro) to manage intermittency. By 2025, China likely has the world’s largest fleet of grid batteries. Additionally, it remains committed to nuclear power – about 21 GW under construction (the most in the world) and new approvals for advanced reactors like SMRs. In nuclear tech, China might soon become an exporter (they inked deals to build reactors in Argentina, Pakistan, etc.). On hydrogen, China currently uses a lot of gray hydrogen for industry, but it’s piloting green hydrogen (with big solar-to-hydrogen projects in Inner Mongolia).

It’s noteworthy how resilient China’s clean energy investment has been even during economic ups and downs. In 2024, while its overall economy faced headwinds (property sector issues, etc.), clean investment still grew 20%. This suggests a strong state-driven prioritization. Provincial governments like Inner Mongolia and Xinjiang are approving record wind/solar bases to meet central targets and also create jobs. And Chinese consumers are embracing clean tech too – e.g., EVs reached ~30% of new car sales in China in 2024, supported by a vast charging infrastructure (over 5 million chargers installed) and domestic brands offering EVs at all price points.

Looking ahead, if the U.S. continues a confrontational stance, China might double down on self-reliance and Asian partnerships. For instance, it might deepen ties with resource-rich Russia (already, China is buying more Russian metals after Western sanctions) or African nations for minerals, ensuring its factories have supply even if cut off from Western sources. It might also attempt to dominate emerging cleantech fields like next-gen batteries (solid-state), EV autonomy, or carbon capture (China has a few CCS pilot projects, not much yet, but it’s watching). On climate negotiations, some speculate China could step into a more leading role if the U.S. completely abdicates – but more likely, China will stick to its “developing nation” bloc alignment, possibly aligning with India and others to pressure the West for more finance while making incremental domestic commitments that it knows it can exceed if needed.

5.3 The Global South: Between Opportunity and Obstacles – Bridging the Investment Gap

For many developing countries in Asia, Africa, and Latin America – often referred to as the Global South – the energy transition presents a cruel paradox: these nations have the most to gain from clean energy (in terms of improved access, lower local pollution, avoiding future climate damages) and often abundant renewable resources, yet they receive a disproportionately small share of investment and face steep barriers to deploying clean technologies. As earlier noted, only about 15% of clean energy investment is happening in emerging and developing economies (ex-China), even though these countries represent the majority of the world’s population and are where energy demand is growing fastest. This section examines how the Global South is faring in the transition, the initiatives aimed at closing the financing gap, and how changes since early 2025 (including the U.S. policy shift) affect these dynamics.

Energy access and demand: First, it’s important to recognize that in many developing nations, the priority is extending reliable energy to populations that still lack it. Around 770 million people globally have no electricity access, and nearly 2.4 billion rely on polluting fuels for cooking. Countries in sub-Saharan Africa, South Asia (e.g., Bangladesh, parts of India) and elsewhere are balancing expanding energy supply with trying to keep emissions low. Their stance in climate negotiations is encapsulated by the term “Just Transition” – they emphasize the transition must also address energy poverty and development needs. This translates to calls for significant support (finance, technology) from wealthy nations so that they can leapfrog to clean energy rather than following the fossil-heavy path of industrialized countries.

Investment gap: The IEA and others have highlighted that the cost of capital in developing countries can be 2-3 times higher than in advanced economies. Investors perceive risks (currency risk, political risk, off-taker risk from often-weak utilities), which drive up required returns and thus make renewable projects more expensive or unviable. A solar farm in Germany might finance at 1-3% interest; the same in Nigeria might face 10%+. This is a huge impediment. As a result, despite often excellent solar/wind potential, many African and some Asian countries are developing renewables slowly. Instead, some are investing in new fossil capacity (e.g., new coal plants in Indonesia, Vietnam – though Vietnam recently canceled some plans under its JETP deal) because historically, multilateral lending was more readily available for conventional power, or because local politics favor coal/gas development.

Climate finance and initiatives: To address this, various initiatives have been launched. Wealthy countries promised to mobilize $100 billion per year in climate finance by 2020 for developing nations – they have fallen short (recently around $83 billion/year is being met, with hopes to hit $100B by 2023 or 2024, albeit counting generously loans and private flows). Nonetheless, programs are emerging: the Just Energy Transition Partnerships (JETPs) – such as the $8.5 billion South Africa JETP (UK, EU, U.S. coalition supporting South Africa’s coal transition), and newer ones announced for Indonesia ($20 billion) and Vietnam ($15.5 billion) in 2022. These aim to provide blended finance (grants, loans) to retire coal plants early and spur renewables in those countries. However, progress has been slow – recipient countries worry about terms (too much loans vs grants), and implementing large shifts is complex. Still, these JETPs are a prototype of targeted climate finance. A similar partnership is under discussion for India, but India has been ambivalent, preferring financing on its own terms.

Multilateral development banks (MDBs) like the World Bank are under pressure to reform and lend more for climate. In 2023, there was momentum (with U.S. urging under Biden appointee Ajay Banga now heading the World Bank) to expand lending capacity and integrate climate into development projects. If the U.S. under Trump deprioritizes that, it could slow such reforms. African countries have been vocal: at the 2023 African Climate Summit, leaders called for a global carbon pricing and better access to finance. They point out Africa has 60% of the world’s solar potential but only 2% of installed solar capacity.

Technology adaptation: Many developing countries are nonetheless pushing forward where they can. For example, Morocco built one of the world’s largest solar farms (Noor) and is investing in green hydrogen, aiming to export to Europe. Kenya and Ethiopia have made their grids nearly 90% renewable (thanks to geothermal, hydro, wind). India installed over 15 GW of solar in 2024 alone and plans 500 GW of renewables by 2030. India also is expanding manufacturing via the PLI scheme (already attracting major investments in solar module and battery production domestically). Brazil is rapidly expanding wind and solar (long reliant on hydro, now diversifying), and it has a highly successful biofuel (ethanol) program. Indonesia, after being one of the last bastions of new coal, agreed under its JETP to peak power sector emissions by 2030, meaning a turn to renewables and possibly tapping its great geothermal resources.

However, Global South progress is uneven. Many poorer nations simply cannot afford large investments without outside help. And some regions, like Sub-Saharan Africa (excluding South Africa), remain extremely underpowered: the entire installed power capacity of Sub-Saharan Africa (pop ~1 billion) is about 250 GW – roughly the same as Germany (pop 83 million). Of that, a lot is coal/gas in South Africa and Nigeria. Renewable investment in Africa was only $5-6 billion in 2022 (a tiny fraction of global). One positive development: costs have fallen so much that in many African countries, solar and wind are now the cheapest option for new power, even beating diesel or coal in auctions. Countries like Namibia and Zambia have seen solar bids at 4-5 cents/kWh. So the economics are lining up; the barrier is financing.

Impact of U.S. policy shifts: Developing countries are sensitive to signals from big powers. The U.S. pulling back climate funds or focusing on fossil fuels can embolden local fossil lobbies (“even the U.S. is expanding oil, why shouldn’t we exploit our gas?”). For example, some African leaders argue they should use their natural gas reserves for development (a hot topic at COP27 in Egypt, branded as Africa’s right to develop). On the other hand, if U.S.-China tensions disrupt trade, developing countries might find cheaper surplus Chinese equipment or maybe benefit from being courted by both sides (as manufacturing shifts, some might move to Vietnam, India, or Mexico). But overall, the lack of U.S. leadership likely means less pressure on laggards to act and potentially less financial aid. It may reinforce the old North-South divide in climate talks, where developing nations resist new commitments until the rich fulfill theirs (which now the U.S. is backtracking on). This could slow progress in global negotiations on things like phasing down fossil fuels (at COP26 and COP27, an effort to commit to “phase down coal” was agreed but not oil/gas, partly due to divisions). If the U.S. is not pushing ambition, don’t expect countries like Saudi Arabia or even India to up their pledges unilaterally.

One encouraging trend is South-South cooperation: countries sharing expertise. E.g., China and India are collaborating on solar (India uses Chinese tech, and Chinese firms invest in India until recently, though India now is protective). Brazil and India lead the International Solar Alliance (ISA), a coalition of 100+ countries to promote solar in the tropics via knowledge sharing and pooled financing. Similarly, small island states have formed groups to collectively buy renewables. Private sector interest is also growing: increasingly, international investors see emerging markets as next growth areas – some private equity and climate funds are looking at places like southeast Asia, Latin America. But they often need guarantees or co-investment from MDBs to be comfortable.

6. Technology Priorities: Cost, Scale, Materials, and Geopolitical Risks

Which energy technologies will carry us into a net-zero future, and how do they stack up against each other in terms of economics, scalability, resource requirements, and resilience to geopolitical shocks? In this section, we compare and contrast the major low-carbon technologies – solar photovoltaics, wind power, batteries and energy storage, clean hydrogen, nuclear (with a focus on Small Modular Reactors), carbon capture and storage, and the critical enabler: power grids/transmission. Each of these plays a distinct role, and each comes with advantages and drawbacks. Prioritizing among them involves understanding metrics like cost per watt (or per kWh), the ease or difficulty of scaling up manufacturing and deployment, the intensity of material inputs (steel, cement, rare elements), and how vulnerable each is to supply disruptions or strategic leverage by nations. We provide an overview of each technology’s status as of 2025 and prospects looking forward, to inform where investment and policy might best be directed.

6.1 Solar Photovoltaics (PV): The Scalable Workhorse with Supply Chain Pitfalls

Cost per watt: Solar PV has become the cheapest source of new electricity in most of the world. Utility-scale solar module prices are near all-time lows in 2025 – around $0.20–0.30 per watt for standard panels, translating to all-in installation costs of roughly $0.80–1.00 per watt (utility-scale) or $1.20–1.50 per watt (rooftop) in many markets. This yields levelized electricity costs often below $0.05 per kWh in sunny regions, undercutting new coal and gas plants. The International Energy Agency famously dubbed solar “the new king of electricity” in 2020 when it concluded solar’s LCOE was the lowest in history. By 2024–25, even with some inflation in materials, solar’s cost advantage holds; the global average LCOE for utility solar is around $0.04–$0.06/kWh, and best-in-class projects (Middle East, etc.) have seen auction bids at $0.01–$0.02/kWh (though such ultra-low bids often assume favorable financing and perhaps optimistic performance). In short, on pure cost, solar PV is a champion.

Scalability: Solar is highly modular and quick to deploy, which makes it extremely scalable. A solar farm can be as small as a few kilowatts or as large as several gigawatts, composed of mass-produced panels. The industry has shown it can ramp output fast – global PV manufacturing capacity is over 300 GW per year and expanding. China alone produces ~70–80% of panels, but new factories are coming up elsewhere (India, U.S., Southeast Asia) spurred by policy incentives and desire to diversify. Installation rates are accelerating: in 2022 the world added about 200 GW of solar; 2023–24 likely even more. Nothing in physical principle limits scaling solar to multi-terawatt annual additions – it mainly requires continued factory expansion and enough raw materials (silicon, silver, aluminum, glass – all available in large quantities, though silver could be a constraint if usage isn’t reduced). Rooftop solar, however, grows at a different pace as it needs consumer adoption, which is rising in places with supportive policy or high retail power prices (Australia, Germany, California, etc.). One challenge is that as solar becomes a very large share of generation, managing its variability (no output at night, reduced on cloudy days) requires complementary storage or dispatchable resources. But technologically, solar can be deployed almost anywhere there is sunlight – deserts, rooftops, floating on reservoirs, etc. So it is highly scalable geographically too, though higher latitudes get less winter sun.

Material intensity and supply chain: A standard silicon PV module is mainly made of silicon (the most abundant element after oxygen), glass, aluminum (for frames), and small amounts of silver (for electrical contacts) and other trace metals. Materials per MW: about 3–4 tons of polysilicon, 30–50 tons of glass, 5–10 tons of aluminum, and roughly 20 kg of silver for older panels (newer ones use less). These are moderate amounts – nothing extremely rare except silver. Silver’s supply (~25,000 tons/yr mined) is ample now, but if PV production skyrockets and no thrifting occurs, silver demand could strain (the industry has been reducing silver per cell by using copper or novel screen printing). There’s R&D into silver-free PV (using copper or aluminum conductors) which could alleviate this. Polysilicon had a supply crunch in 2021 when demand overshot supply, spiking prices, but massive new capacity in China has since alleviated it; now polysilicon is oversupplied and cheap (though the industry is very consolidated). The big supply chain issue is that China dominates refining and production of these materials into panels. Over 80% of polysilicon, >95% of wafering, and >70% of module assembly is in China. The U.S. and Europe have almost no wafer capacity left (a couple percent). That means any trade conflict or sanctions could disrupt supplies. For instance, the U.S. banned imports from Xinjiang over forced labor concerns – Xinjiang produces ~50% of global polysilicon. Companies had to shuffle supply chains and prove non-Xinjiang origin, causing some hiccups. Going forward, Western countries are trying to rebuild some PV manufacturing domestically (IRA incentivizes it in U.S.; Europe has targets too), but it will take a few years and costs are higher outside China. Nonetheless, because the raw materials are common (silicon, etc.), solar is less geopolitically vulnerable than, say, batteries (which need cobalt, lithium). The main risk is just heavy dependence on one country for manufacturing. That risk is being addressed gradually by diversification.

Geopolitical vulnerability: As noted, China’s near-monopoly in some solar supply stages is the primary vulnerability. However, China is unlikely to cut off solar exports as it’s a major revenue source, except perhaps in extreme scenarios. One scenario: if Western nations slapped high tariffs on Chinese panels (some already do), that could slow deployment and raise costs in those nations until alternative supply scales. But many countries have local content rules already or are building domestic industry (India for instance imposes tariffs to spur local production). Another vulnerability is that solar output depends on weather and climate – ironically, climate change could shift cloud patterns; also solar farms are exposed to extreme weather (hail, storms). But those are localized issues that can be engineered around to an extent (better panel durability, insurance).

In terms of prioritization: Solar’s extremely low cost and high scalability make it a top priority technology for global deployment. It offers energy independence to sunny developing countries, can be deployed in distributed manner (helping resilience and access), and its supply chain issues, while real, are arguably easier to solve than those of some other tech (because they revolve around industrial policy, not resource scarcity). The world should prioritize ramping solar capacity while addressing supply chain diversification and integration solutions like storage and grid upgrades. The marginal cost per watt is so low that solar gives the most immediate carbon reduction per dollar in many cases.

6.2 Wind Power (Onshore and Offshore): Abundant Potential, Material Needs, and Systemic Challenges

Cost per watt: Onshore wind is another of the cheapest energy sources. Typical utility-scale onshore wind installations cost about $1.2–1.6 per watt (lower in China and India, higher in U.S./Europe due to labor costs and longer project lead times). This yields levelized costs in good wind sites of around $0.03–0.06 per kWh, making onshore wind competitive with solar and often cheaper than new fossil generation. Offshore wind, a newer segment, is more expensive – installation costs are roughly $3–4 per watt and recent projects have LCOEs around $0.08–0.15/kWh (though some European auctions in 2021 saw “zero-subsidy” bids implying ~$0.06–0.08 if all went perfectly; since then costs rose and some projects got delayed/canceled). Recent reality check: several offshore wind developers in the U.S. and UK in 2023–24 said that due to inflation (steel, vessels, financing) their feasible price is higher than earlier contracted, leading some to abandon contracts. So offshore wind is currently at a delicate point – expected to get cheaper through scale and technology (larger turbines up to 15–20 MW each, floating platforms, etc.), but supply chain bottlenecks and high commodity prices temporarily raised costs. Over the long run, offshore wind still has large cost reduction potential through innovation and volume; but in near term, onshore wind remains the cheaper option by roughly a factor of two.

Scalability: Wind power is scalable but with some caveats. Onshore wind deployment peaked in some places due to land and community constraints. Still, globally, wind additions are significant (~100 GW added in 2024 globally). The industry can scale manufacturing – major turbine makers (Vestas, Siemens Gamesa, GE, Goldwind) can ramp production if demand is there. The limiting factors for onshore wind are often permitting times and acceptance. Turbines have gotten huge (tower heights 100m+, blades 80m long), which improves cost efficiency but also raises local opposition in populated areas. There is still enormous untapped wind potential in plains, deserts, and coasts worldwide. Many developing countries have scarcely exploited onshore wind (e.g., vast swathes of Africa, Central Asia have good wind). So physically, there’s plenty of room to scale. Offshore wind greatly expands accessible resource – winds at sea are stronger and more consistent. Countries like UK, China, and those around North Sea are going big on offshore (China installed a record ~7 GW offshore in 2022, now the world leader). Floating offshore wind (still demonstration stage) could eventually allow turbines in deep waters, opening areas like Mediterranean, Pacific coasts, etc. So wind can scale to provide a large chunk of power (some scenarios see wind being 30–50% of electricity by mid-century). The integration of very high wind shares requires grid upgrades and flexible balancing, similar to solar.

Material intensity: Wind turbines are heavy machines. A modern 3 MW onshore turbine uses roughly: several hundred tons of steel (in tower and nacelle), ~100 tons of concrete for foundation, and ~8 tons of fiberglass/plastic for blades. Additionally, many turbine designs (especially larger ones and almost all offshore turbines) use rare earth permanent magnets in their generators: primarily neodymium and dysprosium (and praseodymium) in the NdFeB magnets. A single large turbine can contain a few hundred kg of neodymium and a smaller amount of dysprosium in its generator. Rare earth usage is not universal – some designs use electromagnets (without rare earths but heavier and less efficient). However, the trend had been towards direct-drive turbines with rare earth magnets for reliability and weight advantages. Thus, wind is a notable consumer of rare earths (along with EV motors). Most rare earths come from China, which, as discussed, restricted magnet exports. This is a geopolitical risk for wind. There are efforts to reduce rare earth content (e.g., use less dysprosium by improving magnets) or to develop alternatives (e.g., superconducting generators, not yet practical). But for now, large wind expansion outside China depends on rare earth supply. Material intensity in bulk: per MW, wind uses more steel and concrete than solar uses per MW, but wind’s higher capacity factor (~30–50% vs solar’s 10–25%) means per kWh generated they’re more comparable. Still, the steel and concrete demand for wind is significant, which has implications: they contribute to upfront CO₂ emissions of construction (though paid back by clean generation). Also, supply of these is generally not a limiting factor globally (iron and limestone are abundant), but price fluctuations affect project costs.

The supply chain for wind has been under strain: Europe’s wind industry had profitability issues as commodity prices rose and auction systems squeezed margins. Turbine makers are trying to pass on costs. If they don’t, expansion could slow if manufacturers go bankrupt or cut back (Siemens Gamesa had major losses recently due to turbine blade defect issues, etc.). China’s wind supply chain is robust and expanding, now starting to export more (Chinese turbines are being exported to Latin America, Asia, and even Europe in some cases). If Western turbine makers falter, we might see Chinese companies fill the gap internationally, which again has geopolitical considerations (Western nations might not want reliance on Chinese turbines heavily, though so far it’s less politicized than solar).

Geopolitical vulnerability: Rare earths are the big one. China controls ~85% of rare earth refining and could squeeze magnet supplies. There was also a recent case: in 2023, the U.S. FERC (grid regulator) raised concern that a Chinese-owned company installed equipment in a U.S. wind farm could pose security risks, illustrating mild concerns about foreign involvement. But overall, wind is less globally traded than solar; turbines are large and often made near where they’re installed (to ease logistics). Thus, localized manufacturing exists (e.g., U.S. has several turbine factories, Europe too, though reliant on some imported components like electronics). Offshoring of manufacturing is less than in solar, though blades and towers are often made regionally due to shipping challenges. So wind’s supply chain vulnerability is more about specific components (magnets, control systems) than entire turbines.

Capacity factor and integration: It’s worth noting wind’s output variability – windy regions can get 30–50% capacity factors (offshore often 50+% now), meaning a 1 MW turbine yields ~2–4 GWh/year. Wind tends to produce at different times than solar (often stronger at night or different seasons, depending on region, which can complement solar). A diversified fleet of wind and solar is helpful. But high wind penetration requires grid management: wind forecasts and balancing reserves. Some countries like Denmark already get 50% of their electricity from wind annually and up to 100% on windy days, managing it by interconnections with neighbors and flexible power sources. This shows that integration, while challenging, is feasible up to high levels with proper grid connectivity and storage.

Prioritization: Wind is a must-have for decarbonization given its scale and relatively low cost. Onshore wind should be prioritized where feasible – it yields cheap bulk energy, often at evening times complementing solar. Offshore wind is strategic for countries with limited land or strong offshore resources (e.g., Japan, UK, much of EU, East Coast U.S., etc.) – it's more expensive but also more reliable (steadier winds) and huge in potential (North Sea alone could power much of Europe if fully tapped). The challenge will be smoothing the boom-bust cycles in the industry. Policies might prioritize stable auction schemes or direct investments to ensure turbine makers stay solvent and expand capacity. And addressing local opposition is crucial (some regions have effectively halted onshore wind expansion due to local bans – e.g., parts of Germany had restrictive setbacks, though they're adjusting rules to reaccelerate wind, and France streamlined permitting in 2023 to try to double onshore wind by 2030). Permitting reform and community engagement will be key to unlock onshore wind’s full potential.

In summary, wind power is highly scalable and cost-competitive, but more material-intensive and locally contentiousthan solar. It should be pushed aggressively but accompanied by efforts to resolve supply chain bottlenecks (e.g., developing rare earth supply outside or recycling magnets) and community issues. Given its high capacity factor, wind nicely complements solar as the backbone of a renewable-heavy grid.

6.3 Batteries and Energy Storage: Key to Flexibility, Facing Materials Crunch

Cost per unit (kWh): Batteries – specifically lithium-ion batteries – have seen dramatic cost declines, though the trend paused or slightly reversed in 2022–2023 due to commodity inflation. By 2025, battery pack prices average around $130–$150 per kilowatt-hour (kWh) for EV-grade cells (up from a low of $105 in 2021). For stationary storage (grid batteries), costs might be slightly higher due to different packaging and lower volumes. These prices are far lower than a decade ago ($1000/kWh in 2010). Continued innovation (cheaper materials, scale, new chemistries) is expected to resume the cost decline, possibly reaching $80/kWh by 2030 or lower for certain chemistries (especially lithium iron phosphate (LFP) which is already cheaper than nickel-rich chemistries). On a per watt basis for power output, a typical 1 kW battery system with 4 hours storage (4 kWh) costs about $500–$600, i.e., $0.5–$0.6 per watt, but storage is more often rated by energy (kWh) than power (kW).

For grid storage, an important metric is $ per kWh per cycle. Lithium batteries currently might store electricity at ~$0.10–0.20 per kWh levelized cost (depending on cycle life and depth of discharge). This is acceptable for daily cycling and peaking services but still somewhat high for longer duration or seasonal storage – hence interest in other storage tech like pumped hydro (cheaper but site-specific) and emerging flow batteries, thermal storage, etc., for longer durations.

Scalability: Lithium-ion manufacturing is scaling very rapidly, thanks to EV demand. Global battery manufacturing capacity is projected to exceed 1,500 GWh/year by 2025, enough for ~20 million EVs plus grid storage. China leads (contributing ~75% of cell production), but many new megafactories are under construction in Europe and North America spurred by EV trends and policies (e.g., IRA requires North American sourcing to get EV credits). There’s no fundamental limit to scaling – factories can be built relatively quickly (18-24 months). However, scaling the raw material supply for batteries is a concern: lithium, cobalt, nickel, graphite all need mining/refining expansions. For instance, lithium demand could grow 4-5x by 2030. Mining projects often lag (7+ years to develop). If material supply doesn’t keep pace, prices can spike as they did in 2022 (lithium carbonate went up ~500%). Right now, after a spike, lithium prices moderated as more production came online from Australia, Chile and new sources (even some direct lithium extraction tech is being piloted). But this will be an ongoing balance – every EV, every grid battery adds to demand. Recycling eventually will supply a share (battery recyclers ramping up – by 2030, recycling could supply 10-15% of lithium, more of cobalt, etc., if collection is robust). So battery scalability is not factory-limited but resource-limited in the medium term. Alternative chemistries like LFP (which uses iron and phosphorus – common materials – instead of nickel/cobalt) alleviate some pressure. Indeed, LFP now accounts for nearly half of EV batteries (especially in China), eliminating cobalt and nickel constraints at the expense of slightly lower energy density. Sodium-ion batteries are on the horizon (sodium is extremely abundant and cheap) – CATL plans mass production of sodium-ion in 2023–2025, though with lower performance, likely for stationary or low-range EV applications initially. If sodium-ion or other new chemistries (like zinc-based or flow batteries) can take off, they could supplement lithium for certain uses and reduce overall supply strain.

Material intensity: Lithium-ion batteries require several critical materials. For a 1 kWh of a typical NMC (nickel-manganese-cobalt) battery: ~0.8 kg of lithium carbonate equivalent (~0.15 kg of pure lithium), ~0.5 kg of nickel, ~0.1 kg of cobalt (less in newer formulations), ~1.4 kg of graphite for the anode, plus copper, aluminum for current collectors, and some manganese. LFP batteries need lithium and graphite but no Ni or Co (they use iron and phosphate which are plentiful). The supply chain vulnerabilities:

• Lithium: mining concentrated in Australia, Chile, China and Argentina. Refining is dominated by China. Lithium is not rare but new mines faced delays (environmental concerns, permitting). Lithium extraction from brines (Chile, Argentina) can conflict with water use for local communities.
• Cobalt: ~70% comes from the Democratic Republic of Congo, often with human rights issues (artisanal mining, child labor). This is a major ESG concern. Battery makers are shifting to low-cobalt chemistries (NMC811 has 10% cobalt of older NMC111, and LFP has zero). Still, certain high-energy cells for longer range may continue using some cobalt for stability.
• Nickel: abundant but high-grade Class 1 nickel (needed for batteries) comes from limited sources (Russia was a big supplier; sanctions complicated that; Indonesia is now top producer but its nickel is laterite ore needing energy-intensive processing). Chinese firms invested heavily in Indonesia’s nickel processing (HPAL plants) to secure battery nickel, raising environmental issues (acid leaching, waste).
• Graphite: Nearly all graphite anode material is processed in China (even if some raw graphite from elsewhere, it’s refined in China). In 2022, China curbed exports of unprocessed graphite to keep value in-country, and in 2023 it put licensing on battery-grade graphite exports, showing willingness to use it as leverage. There are synthetic graphite alternatives but also often made in China.
• Others: Copper, manganese, etc., which are used too, but those are less critical as those markets are large and diversified (copper is used widely in all electrical infrastructure, mostly mined in Chile, Peru, DRC, etc., and refined worldwide).

Geopolitical vulnerability: The battery supply chain is highly globalized and currently China-centric. China’s CATL, BYD, etc., not only produce cells but control much of upstream processing (e.g., >60% of lithium chemicals, 70% of cobalt refining, 80% of graphite processing). This raises potential choke points: e.g., if China were to restrict battery exports or materials in retaliation to Western actions, it could slow EV rollout in other countries significantly in short term. The U.S. IRA tries to onshore or “friend-shore” battery supply by requiring a percentage of critical minerals from U.S./FTA countries and battery components from North America each year to qualify for credits – this is already shifting supply lines (e.g., Tesla and others switching to LFP cells made outside China like CATL’s new plant in Germany or considering phosphate mines in U.S.). But realistically, near-term EV growth still leans on Chinese supply heavily. For grid storage, U.S. and Europe are also starting to localize (some new battery gigafactories announced specifically for energy storage products).

Another risk: the balance of supply and demand. If demand grows faster than supply ramp, we could see persistent high battery prices or shortages, which in turn would slow EV adoption or make grid storage uneconomical. Conversely, if too many factories come online and materials keep up, prices could fall faster, accelerating adoption. The interplay is delicate.

Scalability beyond lithium-ion: For true energy transition, we may need very large-scale storage (to handle multi-day or seasonal gaps in renewables). Lithium-ion excels at short to medium duration (seconds to 4-8 hours). For longer durations, other solutions could be more cost-effective: pumped hydro storage (PHS) is still the largest storage (globally ~95% of storage capacity is PHS). PHS is cheap per kWh (often <$0.05/kWh LCOE) but needs suitable geography (mountains, water). Many developing countries are building PHS (e.g., China has a massive PHS expansion plan too). Flow batteries (like vanadium redox) allow larger energy capacity by just adding electrolyte tanks, but they’ve been niche due to lower round-trip efficiency and higher initial cost; some projects are scaling up, and if vanadium (or zinc-bromine or iron-based) flow batteries can mass manufacture, they could complement li-ion for stationary storage. Hydrogen can act as seasonal storage (excess power to hydrogen, store, then convert back via fuel cells or turbines) but efficiency is low, so it’s considered for long-term storage beyond a few days.

Prioritization: Batteries are crucial for decarbonizing transport (EVs) and enabling high renewable grids (smoothing solar peaks, providing fast response). So investment in battery tech and supply is a top priority. Key priorities within that:

• Expand mining and refining of battery minerals responsibly, including diversifying sources (e.g., new lithium mines in Australia, Canada, U.S., and direct extraction in geothermal brines in California, as well as recycling).
• Innovate to reduce critical mineral usage: e.g., more LFP and even sodium-ion for less demanding uses; solid-state batteries that could use different materials; improving recycling tech to recover lithium, cobalt, nickel at high rates to loop back into supply.
• Support alternative storage for niche uses (flow batteries for long duration stationary storage, ultra-capacitors for ultra-fast response, etc.).
• Grid integration solutions: storage is one, but also demand response and transmission reduce need for storage by balancing over larger areas.

In sum, batteries – primarily lithium-ion – are the linchpin of transport electrification and short-term grid balancing, but they bring along a new suite of resource dependencies that must be managed to avoid replacing one unsustainable extractive system (fossil fuels) with another (mineral bottlenecks or environmental harm from mining). The good news is these minerals are generally recyclable and substitutable to a degree; and unlike burning fossil fuels, using a battery doesn’t consume the elements – they can be reused at end of life. So a long-term steady-state could be reached where recycling provides a large share of material needs once the stock of batteries is built up. But getting to that steady-state will require heavy mining in the near term – a reality that must be addressed with strong environmental and social safeguards.

6.4 Hydrogen and E-fuels: Versatile but Costly, Needing Clean Energy and Platinum

Cost per unit: Hydrogen, specifically green hydrogen (made by electrolyzing water with renewable electricity), is widely seen as a key tool for decarbonizing sectors that electricity can’t easily reach (like steel, fertilizer, long-haul shipping, maybe aviation fuel via synthetic fuels). However, as of 2025, green hydrogen is still significantly more expensive than hydrogen from fossil fuels (gray hydrogen from natural gas with CO₂ emitted, or blue hydrogen with CCS). The cost of green H₂ depends on electricity price and electrolyzer capex. Currently, electrolyzers (mostly alkaline or PEM) cost around $500–$1000 per kW of capacity. With renewable power at, say, $0.03–0.05/kWh and decent utilization (~50% capacity factor if running mostly when wind/solar available or using grid), the resulting hydrogen might cost $4–6 per kg of H₂ in many places. $5/kg is roughly equivalent to $40 per million BTU, which is several times current natural gas prices (or in energy terms, ~$0.15/kWh). By contrast, gray hydrogen from cheap gas could be $1–2/kg (depending on gas prices). So there’s a gap. Some sunny regions with ultra-cheap solar/wind can get closer to $2–3/kg. The U.S. DOE’s target is $1/kg (“1 1 1” goal – $1 for 1 kg in 1 decade). Achieving <$2/kg would likely make green H₂ competitive in many applications. Costs are expected to drop as electrolyzer manufacturing scales (cost could halve with economies of scale and learning) and if low-cost dedicated renewables are used. Also, some countries introduced subsidies like the U.S. IRA’s H₂ tax credit of up to $3/kg for clean hydrogen, which effectively could make green H₂ in the U.S. cost-competitive very soon if realized (that is, producers get paid a credit to cover the gap).

Scalability: The ingredients for green hydrogen are water and renewable electricity – both abundant globally (though water availability can be an issue in arid regions, but even then you can use seawater with desalination). The core tech, electrolyzers, are modular and can be mass-produced like batteries or solar panels. Currently, the world’s electrolyzer manufacturing capacity is a few GW per year, but huge projects have been announced and manufacturing is expected to scale to tens of GW/year by late 2020s. There are two main types: Alkaline electrolyzers (more established, cheaper, but slower response) and PEM (proton exchange membrane) electrolyzers (more flexible, can handle intermittent power better, but use precious metals like platinum/iridium). There’s also solid oxide electrolyzers in development (efficient if heat available, but mostly experimental). Scale-up is happening: Europe, China, U.S., Middle East all planning large hydrogen projects. E.g., a cluster of 100 MW to 1 GW electrolyzer plants have been announced (like Neom in Saudi Arabia planning a 4 GW electrolyzer with solar/wind for ammonia production). One constraint is that to make significant amounts of H₂, you need huge renewables: making 1 million tons of H₂ (which is ~1% of current global hydrogen use) might need ~120 TWh of electricity – equivalent to e.g. 15 GW of dedicated solar at good capacity factor. So scaling hydrogen is tied to scaling renewables beyond just grid power needs. Some countries with rich solar/wind resources and land (like Australia, Chile, Saudi, Kazakhstan, parts of Africa) are eyeing hydrogen as an export product (in form of ammonia or methanol). Shipping H₂ is challenging (it's volumetric energy density is low unless liquefied at -253°C or converted to ammonia), but ammonia (NH₃) is easier to ship and can be used directly in fertilizers or burned in power plants/ships. Japan and South Korea are planning to import ammonia/hydrogen as part of their decarbonization.

Material intensity: The main material issue for electrolyzers is catalysts: PEM electrolyzers require platinum (for cathode) and iridium (anode) – these are scarce and pricey. Each MW of PEM might use ~0.5–1 oz of platinum and 1–2 oz of iridium. Iridium is extremely rare (annual production ~7 tons). If PEM tech is scaled massively, iridium supply could bottleneck – so there's work on reducing loading or alternative catalysts (or using alkaline tech which uses nickel-based catalysts and no noble metals). Alkaline electrolyzers use more common materials (nickel electrodes, etc.) but are bulkier and operate at lower current densities. Fuel cells (for using H₂ in vehicles or power) similarly use platinum (though amounts per vehicle fuel cell have been cut drastically, now maybe 10-20g per car). So platinum group metals (PGMs) could be a supply choke if fuel cells or PEM electrolysis skyrockets. South Africa and Russia are main PGM sources – so that’s geopolitical. Recycling PGMs is feasible (they are already heavily recycled from catalytic converters), which will help if fuel cell cars become widespread.

Another aspect: hydrogen use in steelmaking requires building DRI (direct reduction) furnaces and electric arc furnaces – that’s steel industry scaling, somewhat separate from making hydrogen itself but relevant to potential demand scaling.

Geopolitical vulnerability: Many countries view hydrogen as a chance to reduce fossil imports – so if they can produce domestically or get from friendly allies, it improves energy security. However, new dependencies might form: e.g., if Europe imports green ammonia from the Middle East, that’s a new energy trade reliance (albeit with presumably more suppliers). There’s also a risk that hydrogen could be made from fossil gas with CCS (“blue hydrogen”) as a transitional or in some places (like low gas cost regions). Blue H₂ still has emissions (not all CO₂ is captured, and upstream methane leaks), but some governments are supporting it (e.g., Canada, and initially U.S. allowed H₂ tax credit for gas-derived hydrogen if it meets emissions threshold). If countries invest in blue hydrogen, they may rely on gas producers (which are status quo actors like Russia or Gulf states) – potentially locking in more gas infrastructure. So that’s a strategic consideration: the EU has signaled preference for green, but not ruling out blue if low-carbon enough.

Use cases: We should note hydrogen is not a silver bullet for all sectors; best used where direct electrification is not possible or inefficient: e.g. heavy industry (steel, chemicals), long-range heavy transport (maybe trucking, shipping, aviation via e-fuels). Using H₂ for general heating or passenger cars is generally less efficient than using electric heat pumps or battery EVs. So prioritization matters – otherwise we waste a lot of renewable energy making hydrogen for things electricity could do directly at less energy loss. That said, some countries (like Japan) push hydrogen for even power generation or domestic heating, arguably due to limited renewables or interest in leveraging existing gas infrastructure.

Prioritization: Hydrogen should be prioritized for decarbonizing industries like fertilizer (ammonia), refining, steel, and possibly shipping/aviation fuels via synthetic fuels (e.g., combining green H₂ with captured CO₂ to make methanol or kerosene). The tech is proven (ammonia synthesis is >100 years old, just needs green feedstock; direct reduction steel with H₂ has pilot plants working in EU). The focus should be on lowering cost of green H₂ by deploying electrolyzers at scale (with subsidized bridging of cost gap in near term, as IRA and EU’s Hydrogen Bank are doing), building out hydrogen transport/storage infrastructure in industrial hubs (pipelines, salt cavern storage perhaps), and ensuring renewables growth to power it. Also critical is to expand PGM supply or reduce reliance on them for PEM, and invest in alternative electrolysis technologies to avoid material bottlenecks.

6.5 Grids and Transmission: The Critical Enabler – Expanding and Upgrading the Backbone

Cost per km or kW: Transmission lines cost roughly $0.5–$2 million per km for high voltage lines depending on capacity and terrain (underground or subsea cables can be 5–10x more than overhead). A rule of thumb: a new HV transmission project might cost $1–2 per watt of capacity for long distances (e.g., 1000 MW line spanning 500 km could cost $1 billion, = $1/W). Distribution grid upgrades (lower voltage local lines) also are needed for EV charging, distributed solar, etc. Global grid investment in 2023 was around $300–$400 billion, needing to double by 2030s. Unlike generation tech with clear per-unit costs, grid projects are often bespoke and plagued by permitting delays more than pure cost issues. Still, they absolutely require capital and advanced planning: e.g., building a 500 kV transmission may take 5–10 years of planning and 2–3 years of construction.

Scalability: Expanding grids is more a political/regulatory challenge than a technical one. Technically we know how to build big grids; China demonstrates this – in the last decade, China built tens of thousands of km of high-voltage lines (including HVDC lines transporting GW of power over >1000 km). Other regions, like Europe and the U.S., have struggled to build new lines due to multi-jurisdiction permitting and NIMBY opposition (nobody wants new pylons in their backyard). Solutions include using existing rights-of-way (like along highways or railways), or upgrading voltage on existing lines to carry more power (“dynamic line rating”, or reconductoring with advanced conductors). There's also a push for “Smart grids”: using IT and power electronics to improve efficiency and flexibility of the grid we have (like dynamic routing, demand response to ease congestion instead of always building new lines). But ultimately, a high-renewables world will need significantly more transfer capacity because wind/solar resources are not always where loads are (e.g., U.S. needs more lines from Midwest wind belts to coasts; Europe from North Sea/offshore wind and solar in south to load centers; China from interior to coast).

Material intensity: Transmission build-out uses steel (for towers), aluminum or copper for conductors. These materials are globally traded commodities – scaling up grid doesn't worry about physical scarcity of steel/copper (though high copper demand could raise prices – but note EVs and electrification generally are also raising copper demand significantly). We might see pressure to use aluminum more instead of copper for some cables due to price (aluminum is lighter, cheaper but more resistive – used widely in overhead lines; copper still common in underground cables). Concrete for foundations, etc. – trivial in big scheme.

Geopolitical vulnerability: Grids themselves are national/regional infrastructure – not usually a trade issue except perhaps reliance on certain suppliers for high-end equipment (like large transformers as mentioned, a lot made in Germany, S. Korea, U.S., some in China – there have been concerns in U.S. about buying Chinese transformers due to cybersecurity, and conversely Chinese state restricted exports of advanced power grid technology due to “security of supply” reasons). But by and large, grid technology (towers, wires, transformers) is old and widely available; not heavily sanctioned or reliant on rare minerals (except some uses of electrical steel and large HVDC converters needing semiconductors – those latter rely on global electronics supply chain but many players exist).

Instead, grid vulnerability is more physical/cyber: e.g., weather events (like storms knocking down lines) or malicious attacks (the Ukraine grid cyberattack in 2015, or attacks on substations by vandals in U.S.). A resilient, modern grid needs investment in hardening (bury lines, better maintenance, sensors) and cybersecurity.

Prioritization: Strengthening and expanding transmission is arguably the highest priority enabler for clean transition that often gets overlooked. No matter how cheap solar/wind are, without grid capacity, they get curtailed or can't reach demand centers. Many regions are experiencing this: e.g., Texas has so much wind that at times they curtail due to inadequate transmission to cities; China has/had wind “curtailment” issues in its interior until HVDC built out; Germany's north-south grid lag caused it to pay to curtail wind in north and run coal in south ironically because lines not finished. So prioritization means:

• Policy and planning: governments need long-term grid expansion plans aligned with renewable build-out (some places now requiring grid planners to incorporate 100% renewables scenarios in planning).
• Permitting reform: streamline approvals, maybe designate projects as national interest to override local vetoes (like EU and U.S. discussing how to speed up).
• Regional coordination: often best wind/sun are not in same state/country as loads, so need multi-state or cross-border lines. That requires regulatory alignment and cost-benefit sharing deals.
• Modernization: upgrade old lines with better conductors (increase ampacity by using advanced composite cores to reduce sag, etc.), add sensors for dynamic rating (use more capacity on cold windy days when lines cool more).
• Smart solutions: use power electronics like FACTS (Flexible AC Transmission Systems) to route power more efficiently on existing network, and grid-forming inverters to maintain stability with high inverter-based resources (wind/solar).
• Energy storage and demand response: these complement transmission – by reducing peaks and providing local balancing, they can reduce how much new lines must carry at peak. A balanced approach invests in both wires and bytes (control systems, markets to shift demand).

In summary, the grid is the backbone of the transition, and its expansion is actually one of the hardest challenges not because of technology but social/governance reasons. It's absolutely a top priority to invest money and political capital into solving it. Without it, all other technologies can't reach full potential.