The Renewable Energy Trap: A Warning to Nations Pursuing Blind Sustainability

By Terry L. Headley

As the world increasingly shifts toward renewable energy, there is a growing risk that nations could fall into the “renewable energy trap.” This trap is the result of embracing an energy transition without fully understanding its economic, environmental, and geopolitical consequences. While renewable energy sources like wind, solar, and hydropower have been hailed as the future of global energy, nations rushing toward these technologies without a strategic plan may face grave economic and security challenges. The truth is that blind adherence to renewable energy, in its current form at least, is not the panacea many believe it to be. In fact, it could prove to be a short, green path to economic ruin for both developed and developing nations alike.

The False Promises of Renewables: Hidden Costs and Risks

The promise of renewable energy often comes with an aura of infallibility—clean, green, and limitless. However, this narrative overlooks the hidden costs of transitioning to renewable energy systems, many of which are disguised through misleading claims and incomplete accounting. For example, Germany’s “Energiewende” (Energy Transition) provides a cautionary tale of how well-intentioned policies can lead to unintended consequences.

Germany, once hailed as a leader in the renewable energy revolution, has spent over a decade investing heavily in wind and solar energy. Despite spending billions of euros, Germany has seen little reduction in its greenhouse gas emissions, and the financial burden on consumers has been significant. In 2020, Germany had the highest electricity prices in Europe, largely due to the subsidies and support provided to renewable energy companies. The country’s energy bills for consumers have surged, in part because of the costs associated with maintaining backup fossil fuel plants to ensure grid stability when wind and solar energy are insufficient.

Furthermore, Germany’s renewable energy push has led to a paradoxical reliance on coal. As has been said so many times before, when the wind isn’t blowing and the sun isn’t shining, Germany has been forced to turn back to coal-fired power plants to meet demand. Ironically, this has undermined the very environmental goals the country sought to achieve. Despite Germany’s heavy investment in renewables, it has seen a rise in coal usage due to the intermittent nature of its renewable energy sources, highlighting one of the most significant flaws of a renewable-dominant grid: reliance on fossil fuels to fill in the gaps.

Why?

Because Germany must maintain at least as much baseload coal generation in reserve as it has in renewable energy generation to make sure it has electricity available at all times. The reality is that Germans are paying for the same electricity two or three times.

Rising Energy Costs and the Threat of Energy Poverty

The financial burden of renewable energy policies extends beyond Germany, affecting millions of households across the globe. One of the most significant, yet often overlooked, consequences of the renewable energy transition is the rising cost of electricity. The shift toward renewables has caused electricity prices to increase to the point where energy poverty is becoming a real issue in many countries.

Energy poverty refers to the inability of households to afford sufficient energy for heating, cooling, and powering their homes. The International Energy Agency (IEA) defines energy poverty as the lack of access to affordable and reliable energy. As the costs of renewable energy policies continue to rise, more and more households find themselves at risk of falling into energy poverty.

In the United Kingdom, for example, the government’s push for renewable energy has resulted in substantial increases in electricity prices. A report by the UK’s National Grid showed that between 2008 and 2020, the average annual energy bill for a UK household rose by 30%, with a significant portion of the increase attributed to the country’s renewable energy investments. The UK government has heavily subsidized wind and solar energy projects, but those subsidies are paid for by consumers through higher electricity bills. The result has been a situation where millions of British households struggle to keep up with the rising costs of energy.

In California, energy poverty is also on the rise as the state aggressively pursues renewable energy goals. While California has invested heavily in solar power, it has failed to address the intermittent nature of renewable energy. During periods of peak demand, when solar and wind energy are insufficient, the state is forced to turn to natural gas and imported electricity, which drives up costs. California has one of the highest electricity prices in the United States, and many low-income families are feeling the impact. According to the California Public Utilities Commission, more than 1.3 million households in the state were at risk of energy poverty in 2020. Despite the state’s focus on clean energy, many residents are unable to afford their electricity bills, forcing them to choose between paying for energy or other necessities like food and medicine.

In South Australia, another example of the renewable energy trap is evident. South Australia has aggressively pursued renewable energy policies, becoming one of the leading adopters of wind and solar power in the world. However, this shift has led to significant spikes in electricity prices. The state has faced price volatility and blackouts due to the intermittent nature of renewable energy. In 2017, South Australia experienced a widespread blackout after a storm damaged the transmission network, and the state has since struggled to maintain grid stability. The increased reliance on renewables has led to soaring electricity prices, and many households are now unable to afford basic energy needs. According to the Australian Energy Regulator, electricity prices in South Australia have risen by 50% in the past decade, and many low-income families are feeling the squeeze.

The Geopolitical Trap: Energy Dependency, Raw Materials and National Security

The renewable energy transition also raises important geopolitical concerns, particularly in the area of raw materials. Renewable energy technologies are heavily reliant on rare earth metals, lithium, cobalt, and nickel for the production of batteries, solar panels, and wind turbines. These materials are predominantly sourced from countries with less stable political environments or are monopolized by a few nations, such as China.

This creates a new form of energy dependency. For instance, the global supply chain for lithium and cobalt is largely controlled by China, raising questions about national security and the potential for price manipulation or trade disruptions. Countries that rush toward renewables without developing diversified supply chains may find themselves dependent on a handful of foreign nations for critical materials—echoing the geopolitical vulnerability that oil-dependent countries have faced for decades. This new energy dependence could undermine the goal of energy independence that many nations seek.

Moreover, the mining process for these materials is far from clean or environmentally friendly. In countries like the Democratic Republic of Congo, where much of the world’s cobalt is sourced, mining operations are linked to severe environmental degradation and human rights abuses. The environmental damage associated with mining for lithium, cobalt, and rare earth metals often goes unreported in the “green” narrative surrounding renewable energy. In many cases, the extraction of these materials results in significant water contamination, deforestation, and harmful air emissions.

The Hidden Costs: Economic Burdens and Social Inequality

Another significant issue with the renewable energy push is the way its real costs are hidden from the public. Governments often advertise the economic benefits of renewables without accounting for the financial burden on consumers. The transition to renewable energy technologies often requires substantial government subsidies, which are typically funded by taxpayers or passed onto consumers through higher utility rates. In the case of the European Union, the cost of renewable energy subsidies is often obscured by misleading accounting practices that fail to capture the true cost of maintaining grid stability.

Take California, a state that has aggressively pursued renewable energy initiatives. While solar and wind have gained in popularity, California’s reliance on intermittent renewables has led to skyrocketing energy prices and blackouts. The state has been forced to rely on natural gas plants as backup power sources, creating a contradictory energy system that still depends on fossil fuels. Additionally, the high costs of implementing renewable energy infrastructure have disproportionately affected low-income families, who are unable to afford higher utility bills.

The Crucial Role of Coal-Fired Baseload Electricity

As nations scramble to meet ambitious renewable energy goals, the role of coal-fired baseload electricity cannot be overlooked. Contrary to the widespread narrative that coal is a relic of the past, coal remains the most dependable, affordable, and scalable option for providing stable electricity in an increasingly energy-demanding world.

Baseload electricity refers to the minimum level of demand on an electrical grid over a span of time. Coal-fired power plants are uniquely capable of providing this baseload power reliably. Unlike wind and solar, which are intermittent and weather-dependent, coal-fired plants can produce electricity 24/7, irrespective of external conditions. This ensures a stable and predictable energy supply, crucial for both industrial needs and residential consumption.

Coal is also among the most affordable sources of electricity. The levelized cost of energy (LCOE)—the cost to produce electricity per megawatt-hour—is lower for coal-fired plants than for many renewable alternatives, especially when factoring in the full infrastructure and grid integration costs associated with wind and solar energy. In the U.S., for example, coal remains more cost-effective than natural gas and many renewables, particularly in regions like the Midwest, where the energy grid is more reliant on coal-fired plants.

Moreover, coal is abundant and domestically available in many countries, reducing dependence on foreign energy sources. This enhances energy security, particularly for nations that are trying to avoid the geopolitical risks associated with imported energy, including oil, natural gas, and the rare earth metals required for renewable technologies.

Conclusion: A Balanced Approach, Grounded in Reality is Essential

While renewable energy holds promise for a sustainable future, the world must proceed with caution. Nations cannot afford to fall into the renewable energy trap by embracing these technologies without considering the full spectrum of their impacts. Germany’s experience with its Energiewende shows that pushing too hard for renewables can create new environmental problems, economic burdens, and political risks. A balanced energy strategy that incorporates energy security, economic sustainability, and environmental responsibility is crucial.

Coal-fired baseload electricity remains an essential and reliable component of a balanced energy portfolio. It provides affordable, stable, and secure electricity, ensuring that nations do not risk energy poverty or grid instability as they transition to greener sources. The renewable energy revolution must be a step forward, not a leap into the unknown. By acknowledging the true costs of renewable energy and the irreplaceable role of coal, we can forge a more reliable and sustainable energy future for all.

Terry L. Headley is President, The Headley Company. 

This article was originally published by RealClearEnergy and made available via RealClearWire.