Why developed countries must prevent an electricity crunch

A giant battery sits on top of northern Europe. That battery is called Norway . But as the Nordic nation’s surplus electricity runs down, its neighbours face the loss of dependable spare capacity. And that story is being repeated from the UK to Australia, as the environmental mantra of “ electrify everything ” collides with challenges to new power plants, grids and the obsolescence of legacy facilities . There are four types of persistent international electricity shortfalls . The first comes in conflict-prone, or politically unstable countries, where building sufficient new generating capacity and maintaining the electricity grid is very difficult. The Middle East region knows well the problems of Iraq, Lebanon and Yemen, where people have increasingly turned to small-scale solar panels to help meet household needs. South Africa is a special case. Corruption, theft, political capture of the electricity sector and a long-running failure to refurbish or replace coal-fired power stations have led to a long-running and worsening electricity crisis that has dragged down the continent’s second-largest economy. Andre de Ruyter, the former chief executive of state utility Eskom, who championed renewables, was sacked in February after alleging politically-linked crime syndicates had infiltrated the company. He also survived an apparent attempt to poison him with cyanide in his coffee. In this region, political deadlock in Kuwait has prevented sufficient investment in new gas or renewable power stations, despite the country’s enviable solar and wind resources. The country has an ambitious pipeline of projects, including the 1.1 gigawatt Shagaya Al Dabdaba solar farm, but it has to move quickly. Last August, peak demand reached nearly 17 gigawatts, and maximum generating capacity is only at about 18 gigawatts, having fallen since 2021. The second is in lower-income countries, where financial instability, below-cost electricity tariffs, high costs of capital, unreliable payment and other such problems deter investors. Much attention at Cop28 was devoted to bringing investment in renewable energy to Africa in particular, where many people still lack access to modern energy systems. The other two cases are less obvious, but more important for the health of the global economy and the low-carbon transition. China, India and other rising Asian economies are building capacity at a breakneck pace, but still struggle to keep up. Generally, they have coped, but they still suffer blackouts at times when coal supply flags, drought cuts hydroelectric output or heatwaves boost air-conditioning demand. Pakistan and Bangladesh face the problems of huge populations, dwindling domestic gas resources, inability to pay for expensive gas imports, and environmentally-related unwillingness to finance coal power. Finally, and most puzzling, is the fourth situation: wealthy developed countries, that are sleepwalking into a power crunch. This comes from five causes. On the supply side, old coal and nuclear plants are being retired and several countries – notably Germany – have unwisely hastened out of nuclear. Belgium, Switzerland and Spain also plan to phase out their reactors. There is a reluctance to refurbish coal power or build new gas-fired power because of climate commitments and banks’ refusal to lend to fossil-fuelled projects. Environmental and community opposition make building large hydropower plants almost impossible. Rugged Albania has discovered this over plans to dam the Vjosa, Europe’s last free-flowing wild river. Second, heatwaves and droughts are reducing output from hydroelectric and nuclear stations and making them less reliable, a big problem in France in 2022 during Europe’s summer power crisis. Conversely, the current winter freeze across North America has brought power cuts and shown that all forms of generating and fuel distribution are vulnerable. Third, the build-up of renewable energy, though fast and accelerating, is still not quick enough. Put these issues together and Europe’s once reliable electricity exporters – Germany, France, Switzerland, Sweden and the Czech Republic – have become importers, or at least are no longer dependable large suppliers. The fourth problem is moving electricity from increasingly remote renewable sites or foreign sources to consumers. “Without transmission, there is no transition,” said Allen Andersen, a professor at the University of Oslo. To reach a net-zero electricity system, the UK would need to build five times more transmission lines by 2030 than it did in the past 30 years. The US is finding just how hard it is to string new power cables across states and through people’s properties. A proposed electricity line to bring hydropower from Canada into the north-eastern US has been held up by opposition from environmentalists, landowners and American utility vested interests. Connecting electricity exporter Spain with its northern neighbour France is similarly almost impossible. And fifth, on the demand side, economies that have become used to very little electricity demand growth suddenly have to contend with a great acceleration. Efficiency can cut consumption, but net-zero plans require electrons for battery cars, home heat pumps replacing gas boilers and new electricity-based industrial processes, such as making steel and the key petrochemical ethylene. These countries likely won’t suffer blackouts – their market-based power systems will adapt. But prices will rise further, straining consumers and forcing heavy industries to shut down. Prices will also be more volatile, going negative in windy periods, spiking on cold, dark, calm winter days. Major new users will wait years to connect to the grid. Concentrated points of demand, such as motorway electric car charging stations, will be delayed, setting back other decarbonisation goals. Some countries have woken up to the urgency. The UK has just announced plans to quadruple nuclear power capacity by 2050 to complement its growing offshore wind fleet. In December, it opened Viking Link, a new cable under the North Sea from windy Denmark, and is considering a giant subsea transmission line from solar and wind farms to be built in Morocco. Norway plays a key balancing role in European power because of its hydroelectric reservoirs, which act as giant batteries. Its utility, Statkraft, has unveiled a €6 billion ($6.57 billion) programme to upgrade wind and hydroelectric capacity. Utilities need to plan ahead for connections and new demand. Governments need to facilitate new transmission lines, particularly connections to neighbouring states. Both need to work together to keep existing nuclear plants alive, and build new ones where appropriate. Batteries, hydroelectric storage and thermal storage are needed on a much bigger scale. And some amount of gas power using hydrogen or carbon capture and storage will be low-carbon while staying cheaper, less volatile and more reliable than an entirely renewable-based system. So, with foresight, these problems are fixable. But if Europe, the US and others get it wrong, this could discredit the strategy of converting largely to renewables. To avoid deindustrialisation and to meet net-zero targets, developed countries must prevent an electricity crunch. Robin M. Mills is chief executive of Qamar Energy, and author of Capturing Carbon