I heard this week that the Energy Trilemma is dead; the decision is now how fast we transition and at what cost. Others disagreed and said that it’s still at the heart of policy.
The Energy Trilemma is the need to balance the objectives of decarbonisation, affordability and security in the energy system. No one has solved this yet and all are approaching it in different ways. France is betting on nuclear, the UK on wind, every US state is different, and I’m not entirely clear how Germany plans to solve this.
During the early months of the Energy Crisis after Putin’s invasion of Ukraine, it was clear that security of supply was the overriding concern - costs spiralled and the environment suffered. Governments immediately pumped billions into energy markets, tankers turned around mid ocean, and new facilities were bought online in record time, all to protect supplies.
Some argue that a decarbonised energy system is also the cheapest, therefore these two sides of the trilemma collapse into one, resulting in a simpler question: how quickly can we achieve security of supply with renewables? If this is right, then the key question is what to build and where, which leads to a question of whether central planning or the market can best decide this.
But despite costs reducing it doesn’t look like a renewables-based electricity system will be cheaper. Given the need for baseload and firm dispatchable power, filling in the gaps in renewable supply will be either be expensive (nuclear and batteries) or polluting (gas generators).
Local solutions remain critical to solving this. The food supply offers a helpful analogy. Through domestic production and imports, the government must ensure that there is sufficient, cheap and safe food, just as they must ensure there’s sufficient energy on the grid. Local providers such as supermarkets ensure each region gets enough and set the prices, like the distribution networks and retailers in the energy market. And in our own homes we decide how much food to buy and store, just as we make decisions on when to heat our homes.
The trilemma isn’t dead, but it’s a lot more complex than it used to be. Perhaps it’s an oversimplification we should replace with a series of key design decisions for the energy transition.
