Why is the world stuck on energy?

(Image caption) The world is not stopped transforming, but is stuck in a systemic bottleneck where "substitution is not yet complete and demand continues to rise".

 

 

Introduction | The world isn't unaware of the need for transformation; it's just not ready to undertake it.

 

Entering 2026, the global energy transition presents a highly contradictory reality that must be faced squarely.

 

On the power generation side, the growth rate of renewable energy is unprecedented. Solar and wind power have set new records in installed capacity and power generation in many countries, and clean electricity now accounts for nearly one-third of the global electricity mix, even surpassing coal power at times. This progress makes the assessment that "the energy transition is successful" an intuitive, but incomplete, conclusion.

 

However, when we shift our focus from "electricity" back to "primary energy"—that is, the energy source upon which the entire economy actually depends—another fact becomes undeniable:

Coal, oil and natural gas together still account for about 80% of the world’s primary energy supply, with limited decline, and in several years there have been cases of “slight decrease in share but record high absolute consumption”.

 

This is not a statistical error, but a structural reality.

 

Extensive core data shows that even after tens of trillions of dollars have been invested globally over the past 25 years in driving the energy transition, fossil fuels remain the primary energy source supporting industry, transportation, chemicals, cities, and national security. Meanwhile, global energy investment is projected to reach approximately $3.3 trillion by 2025, with about $2.2 trillion flowing into clean energy-related sectors, yet there has been no structural collapse in fossil fuel investment and usage.

 

This set of data itself illustrates a key fact:

 

The energy transition is not a question of "whether it has been done" but rather "whether it can be replaced".

 

Replacing someone means incurring costs, risks, and political consequences.

 

The world is "stuck on energy" not because it's heading in the wrong direction, nor because it lacks technology, but because energy is a civilization-level system, and its conversion requires four conditions to be met simultaneously:

 

If any one of these elements is missing, the transformation will be forced to slow down, revert, or even be suspended at some point.

 

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Chapter 1 | The Biggest Cognitive Misconception: The Victory of Electricity Does Not Equal Energy Substitution

 

One of the most common misconceptions in current public discussions about energy transition is that "improvement of the power structure" is directly equated with "completion of the energy structure transition".

 

(Image caption) Solar and wind power have set new records in installed capacity and power generation in many countries, and the proportion of clean electricity is rising rapidly. However, this progress is mainly happening on the "electricity side" and has not yet replaced fossil fuels in primary energy sources in an equal amount.

 

 

From the surface of the data, this misalignment is easy to occur.

The share of renewable energy in global electricity has indeed seen a historic leap; in some countries and at certain times, wind and solar power have even become the primary sources of electricity generation.

 

However, this narrative ignores a basic fact:

Electricity is only one part of the energy system, and it is the part that is most easily cleaned up.

 

At the primary energy level, what truly determines the status of fossil fuels is not power generation, but rather the following highly dependent scenarios:

 

Even with the rapid expansion of clean electricity, these scenarios still rely heavily on fossil fuels, not because of a lack of technological imagination, but because the cost of real-world alternatives is extremely high.

 

A phenomenon you repeatedly pointed out in the original manuscript is precisely the core of this misalignment:

In most parts of the world, new renewable energy is primarily used to meet new demand—such as population growth, urbanization, industrial reshoring, and the rapidly increasing electricity demand from AI and data centers in recent years—rather than to shut down existing fossil fuel facilities.

 

The result is a structural "addition" state:

Clean energy is increasing, but fossil fuels have not been replaced in equal amounts. As a result, the world has more energy equipment and more investment, but it also maintains a high emission structure.

 

This is not a policy failure, but rather that the replacement has not yet begun.

 

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Chapter Two | History Tells Us: Energy Transition Is Never a Linear Process

 

If we extend the timescale, the "stalling" of the energy transition is not actually unusual.

 

The energy history of the past two hundred years shows that almost no shift in energy dominance has been accomplished without significant external pressure.

 

Coal became the core energy source of the Industrial Revolution not because it was cleaner, but because it could support the entirely new industrial system of steam engines, steel, and railways.

The replacement of coal in transportation and military applications by oil was not due to environmental considerations, but rather because the internal combustion engine pushed energy demand toward higher density and mobility.

The expansion of natural gas and nuclear energy in the mid-to-late 20th century was closely related to energy security, price shocks, and pollution pressures.

 

These transformations share three common characteristics:

 

In contrast, the current green transition has a historically rare characteristic:

It attempts to proactively complete a system-wide replacement in the absence of a full-blown energy supply crisis.

 

This means that it relies more on government leadership, institutional coordination, and long-term public investment than any previous transformation; it also means that as long as political cycles are repeated, social tolerance is insufficient, and capital costs rise, the transformation will enter a repetitive phase.

 

Therefore, the energy transition is "stuck" not because humanity is more incompetent than in the past, but because this time, humanity is attempting to complete the most difficult transition under the most unfavorable conditions for a rapid transition.

 

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Chapter 3 | Why Fossil Fuels Remain Irreplaceable: Function, Not Morality

 

In the public narrative of energy transition, fossil fuels are often described as something that "should be removed from the historical stage".

However, from a systems perspective, the reason why fossil fuels still exist is not because they are "more correct," but because they still provide functions in several key dimensions that existing systems cannot easily replace.

 

These functions are not abstract, but concrete, engineered, and institutionalized.

 

(Image caption) Even with investments of tens of trillions of dollars to promote energy transition, coal, oil and natural gas still account for about 80% of the world’s primary energy supply, supporting industry, transportation and national security, indicating that the transition has not yet entered a true replacement phase.

 

 

I. Energy Density and Portability

 

One of the biggest advantages of oil and natural gas is their extremely high energy density and mature transportation system.

Liquid and gaseous fuels can be transported over long distances, stored for extended periods, and their energy released rapidly when needed.

 

This allows them to remain central in the following scenarios:

 

Even in countries where electrification is rapidly advancing, alternatives for these scenarios remain limited, costly, and not yet scalable enough to be replicated globally.

 

II. Scheduling and System Stability

 

Another key feature is schedulability.

 

Fossil fuel power plants can quickly adjust their output according to grid demand, and this "on-demand supply" capability is especially important in energy systems with a high proportion of intermittent energy sources.

 

When wind speeds decrease, sunlight is insufficient, and energy storage has not yet been replenished, the system still needs a reliable backup mechanism.

Under current conditions, fossil fuels often remain the primary player in this role.

 

This is why, even though some regions have significantly reduced the proportion of coal-fired power in their annual average electricity mix, coal and natural gas are still retained as "reserve capacity."

 

III. Existing Infrastructure and Sunk Costs

 

The world has built a century's worth of infrastructure for fossil fuels:

Oil fields, gas fields, mining areas, pipelines, ports, refineries, storage tanks, generator sets, and chemical industrial parks.

 

These facilities are not abstract assets, but concrete, existing investments, backed by local finances, employment structures, and national strategies.

 

Eliminating this system in a short period of time not only means technological replacement, but also means:

 

Therefore, fossil fuels are often retained in the system to mitigate the impact of the transition until an equivalent alternative is available.

 

IV. Political Tolerance

 

The last, and most practical, function is political tolerability.

 

Energy prices directly affect people's livelihoods, inflation, and industrial competitiveness.

Any energy policy that is widely perceived as "driving up the cost of living and reducing employment" will quickly become a political issue.

 

In such an environment, fossil fuels do not exist because they are "favored," but because they remain the least likely option to cause systemic disorder in the short term.

 

Therefore, from a functional perspective, the persistence of fossil fuels is not accidental, but rather a rational choice made by the existing energy system in the absence of a complete alternative.

 

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Chapter 4 | The First Real Hard Wall: The Engineering Realities of Intermittency, Energy Storage, and the Power Grid

 

If there is a bottleneck in the energy transition that cannot be bypassed by narrative, it is the physical system itself.

 

The rapid expansion of renewable energy has shifted the question from "whether or not electricity can be generated" to "whether the system can absorb the electricity".

 

(Image caption) The dense deployment of large-scale model training and data centers has led to a rapid increase in electricity demand, turning energy from a "background assumption" into a hard bottleneck restricting the development of AI.

 

 

I. Intermittency is not a technical defect, but a natural characteristic.

 

The core characteristic of wind and solar energy is their high dependence on natural conditions.

This is not because the technology is not yet mature, but because it is a natural law.

 

When the proportion of renewable energy is low, intermittentity can be absorbed by the system;

When the proportion increases to a certain level, intermittency will become the dominant factor in the system.

 

This means that the more successful the transformation, the higher the requirements for the system's adjustment capabilities.

 

II. The role of energy storage has been underestimated for a long time.

 

In systems with a high proportion of renewable energy, energy storage is no longer an auxiliary component, but a core component.

 

However, energy storage faces three practical limitations:

 

1) Time scale constraints

Current mainstream battery technologies are more suitable for short-term energy storage (minutes to several hours).

What the energy system truly needs is the ability to balance across days, weeks, and even seasons.

 

2) Cost and resource constraints

Energy storage systems require a large amount of mineral resources, including lithium, nickel, cobalt, and copper.

The extraction, processing, and supply of these resources are highly concentrated and easily affected by geopolitical and market fluctuations.

 

3) System integration limitations

Energy storage is not an isolated device; it must be highly coordinated with the power grid, dispatching system, and demand-side management.

This places higher demands on the digitalization and governance capabilities of the power system.

 

Therefore, although energy storage is one solution, it is not yet sufficient to independently undertake the balancing task of a high proportion of renewable energy systems at this stage.

 

III. Power Grid: The Slowest but Most Critical Part of the Transformation

 

Compared to power generation equipment, the pace of power grid upgrades is naturally slower.

 

Power transmission corridors, substations, and inter-regional interconnections involve:

 

These factors determine that power grid construction is typically measured on a ten-year scale, rather than a quarterly scale.

 

When the rate of change at the power generation end far exceeds the rate of grid upgrades, structural frictions will occur in the system:

On one hand, new energy sources are being forced to limit or abandon power generation.

On the other hand, the system still needs to retain fossil fuels as a backup.

 

This is not a policy choice, but an engineering reality.

 

 

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Chapter 5 | Economics and Finance: A Vicious Cycle of High Costs, Subsidy Dependence, and Investment Hesitation

 

If physical reality determines the upper limit of transformation, then economics and finance determine the speed of transformation.

The world is not without money being invested in clean energy; the problem is that this funding is not yet sufficient to create a predictable, replicable, and sustainable long-term cash flow structure.

 

I. Capital-intensive structure: huge upfront investment and long payback period

 

The cost curve for clean energy exhibits a typical characteristic:

It is highly capital-intensive in the early stages, but the marginal cost approaches zero in the later stages.

 

(Image caption) The pace of grid upgrades and energy storage construction is far slower than the expansion of power generation. Intermittent energy is difficult to be absorbed by the system, forming the most critical and slowest engineering bottleneck in the transformation.

 

 

This structure is attractive in low-interest-rate, policy-stable environments; however, it can rapidly amplify risks in high-interest-rate, policy-volatile environments. When capital costs rise and financing terms shorten, project financial models need to be recalculated, leading to investment delays or downsizing.

 

This is why, despite record-high total investment, many projects still exhibit slow approval, slow implementation, and slow expansion—not because they don't want to do it, but because they dare not scale it up at once.

 

II. The double-edged sword effect of subsidies: necessary, but unstable.

 

Government subsidies played a crucial role in the early stages of the transition, shortening the learning curve and facilitating scaling. However, subsidies also introduced a vulnerability: policy uncertainty.

 

When subsidies are seen as "tools that can be adjusted with political cycles," capital will add a risk premium to all long-term projects. The result is not that investment disappears, but rather that investment behavior becomes more conservative, more fragmented, and more inclined towards short-term returns.

 

In other words, subsidies can initiate the transformation, but they are unlikely to support the transformation on its own.

 

III. North-South Gap: The Regions Most in Need of Transformation Have the Highest Capital Costs

 

A problem that has been repeatedly proven but has yet to be addressed systemically is:

The regions with the fastest growing demand for clean energy are often also the regions with the highest cost of capital.

 

In many emerging economies, financing rates, exchange rate risks, political risks, and insufficient grid capacity make it difficult to commercialize projects even as technology costs decrease. As a result, these regions are forced to continue relying on existing fossil fuels, creating a structural lock-in of "high demand—slow transition—high emissions."

 

Without deeper involvement from cross-border financial instruments and public capital, this cycle is unlikely to be broken.

 

IV. Collective Consequences of Investment Hesitation

 

When capital hesitates, subsidies fluctuate, and funding costs remain high, the transformation will take on a "slow and gradual" state:

It is enough to generate news and progress, but not enough to complete the replacement.

 

This state will not lead to a collapse, but it will prolong the process.

Delay is itself the biggest enemy of energy transition.

 

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Chapter Six | Politics and Geopolitics: How Energy Security Repeatedly Rewrites Priorities

 

Any energy policy must ultimately be put to the test in reality: whether it can survive politically.

This makes the energy transition inevitably deeply intertwined with geopolitics, domestic politics, and election cycles.

 

I. Structural Regression of Energy Security

 

In most countries, energy security has never truly left the core of policy.

When supply chains are disrupted, price volatility increases, or geopolitical conflicts escalate, governments often adjust their pace, prioritizing "availability" over "speed of transformation."

 

This is not a rejection of carbon reduction goals, but rather a re-prioritization of risks.

In such times, fossil fuels are often reintroduced as a transitional safeguard, even if only in terms of capacity or backup.

 

Second, geopolitical fragmentation increases the cost of transformation.

 

The energy transition is highly dependent on cross-border supply chains: key minerals, equipment manufacturing, technology standards, and capital flows. As geopolitical fragmentation intensifies, the costs and uncertainties in these chains rise simultaneously.

 

turn out:

 

In this environment, the "economic" aspects of the transition are eroded, while political dependence on energy security is strengthened.

 

III. The Conflict Between Policy Consistency and Election Cycles

 

The energy transition requires a decade-long commitment, but the decision-making pace in most democracies is two to four years. As long as policies are likely to be reversed after the election, investors will postpone decisions and diversify their risk.

 

This has resulted in a politically charged pace of transition that is "two steps forward, one step back":

Declaring a goal is easy; maintaining the path is difficult.

 

(Image caption) Under supply chain disruptions and geopolitical pressures, countries often re-emphasize energy security and dispatchability, keeping fossil fuels as a "backup" in the transition process.

 

 

IV. Compromises under Geopolitical Realities

 

Therefore, when we see some regions reverting to carbon reduction policies or increasing fossil fuel use in the short term, this is often not a betrayal, but a compromise. An energy transition that cannot coexist with a security narrative is unlikely to be politically sustainable.

 

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Chapter Seven | Society and Equity: Transition is a Redistribution of Resources, Not Simply an Upgrading

 

The energy transition is also a profound social restructuring.

Any restructuring will produce winners and losers.

 

I. Impact on Employment and Local Economy

 

The fossil fuel industry is often concentrated in specific regions, forming long-term employment and identity structures. When these industries shrink, the local economy suffers a direct impact.

 

If the transformation only provides macro-level goals but lacks visible mechanisms for job transitions, training, and compensation, local communities will perceive the transformation as an external pressure rather than a shared plan.

 

II. Energy Prices and Cost of Living

 

Energy prices are highly politically sensitive.

When electricity or fuel prices rise, the transition will be redefined as a "cost of living issue" rather than a "long-term investment."

 

This forces policymakers to constantly strike a balance in practice:

Accelerate the transformation, or maintain affordable prices.

 

III. The Hidden Social Costs of Supply Chains

 

The transition requires vast amounts of minerals and materials, the extraction and processing of which are often concentrated in resource-rich countries. If supply chain governance is inadequate, environmental damage, social inequality, and labor problems will be shifted to remote regions.

 

If this asymmetry persists, it will undermine the moral legitimacy and political support for the transition.

 

IV. Institutional Gaps in Fair Transition

 

One of the biggest challenges at present is how to turn "fair transition" from a slogan into a system. Without a workable distribution mechanism, the transition will encounter resistance at the social level and ultimately manifest as political pressure.

 

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Chapter 8 | Regional Samples: The World Isn't "Stuck" in the Same Way All the Time

 

There is another often underestimated reason why the energy transition is difficult to advance:

The world is not transforming on the same track.

 

The "blockages" are not the same in different countries and regions. This means that there is no single solution that can be replicated globally, but rather "differentiated blockages" under different institutional and resource conditions.

 

I. China: Extremely fast growth, but held back by demand growth and security concerns.

 

China is the fastest-growing country in the world in terms of clean energy deployment. The scale of its investment in wind, solar, energy storage, and power grids is unparalleled at any single national level. This has led to significant progress in the clean energy conversion of China's power generation sector, with the proportion of clean electricity rising rapidly.

 

However, China is also one of the fastest-growing economies in terms of energy demand. Industrialization, urbanization, data centers, manufacturing reshoring, and infrastructure expansion continue to drive up aggregate demand. The result is:

Most of the increase in clean energy is used to meet new demand, rather than to replace existing fossil fuels.

 

Against this backdrop, coal is retained as a systemic base and security guarantee. This is not technological conservatism, but rather a systemic choice prioritizing energy security. China's "bottleneck" is not due to technology, but rather the simultaneous existence of "demand scale and security logic."

 

II. Europe: Highly clean electricity supply, but repeatedly pulled back by safety and price considerations.

 

Europe has long been a leader in renewable energy and efficiency improvements, with wind and solar power becoming the mainstays of the power mix in many countries. However, Europe's bottleneck lies not in deployment capabilities, but in external dependence and political tolerance.

 

When energy supply chains are disrupted and import costs rise, Europe has been forced to reintroduce coal and natural gas as short-term safeguards. Rising electricity prices and pressure to maintain industrial competitiveness quickly translated into political friction, forcing the slowdown of some transition policies.

 

Europe's predicament stems from the tension between high-standard transformation and high security risks.

 

III. The United States: Abundant capital and technology, but slowed down by policy cycles.

 

The United States possesses a robust capital market, innovative capabilities, and abundant energy resources. Clean energy and electrification are progressing rapidly in many states, but the pace at the national level is affected by policy inconsistencies and interstate differences.

 

At the same time, the United States faces another unique pressure:

The rapid increase in power demand from AI and data centers.

This has brought "stable and dispatchable power" back into the core policy issue.

 

In this environment, natural gas and existing power generation assets are seen as essential options in the short to medium term. The bottleneck in the US is not technology or funding, but the combined effect of policy consistency and surging demand.

 

IV. India and Most Emerging Economies: Explosive Demand, but Insufficient Basic Capacity

 

In India and most emerging economies, the first priority of the energy transition is not carbon reduction, but rather supply availability and economic growth.

 

These regions often face the following simultaneously:

 

Under these conditions, coal and natural gas remain the "most readily available and reliable" options. The transformation is stalled at the most basic level of engineering and financial capabilities, rather than at the level of willingness.

 

V. Japan: A Complex Context of Resource Dependence, Social Risks, and Policy Conservatism

 

Japan is highly dependent on imported energy, and the issue of nuclear energy is a highly sensitive social issue. The deployment of renewable energy is subject to geographical and institutional constraints. Under multiple pressures related to safety, cost, and social acceptance, the pace of transformation is becoming more conservative.

 

Japan's predicament stems from resource constraints and the amplified effect of social risks.

 

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Chapter 9 | The Key to Future Breakthroughs: Not More Technology, But More Complete System Capabilities

 

When we put all the checkpoints together, we can see a clear conclusion:

What the energy transition truly lacks is not a breakthrough in a single technology, but a simultaneous improvement in systemic capabilities.

 

Whether a breakthrough can be achieved in the future depends on whether progress is made in all four directions simultaneously.

 

I. Power Grids and Interconnection: Turning Geographical Differences into Systemic Advantages

 

A high proportion of renewable energy systems requires stronger inter-regional power transmission and interconnection to transform resource disparities between different regions into a stable supply. This is a major and slow-moving project, but it is one that cannot be skipped.

 

II. Energy Storage and Dispatch: Transforming Intermittency into a Manageable Variable

 

While progress has been made in short-term energy storage, long-term energy storage and seasonal balance remain key shortcomings. Only when energy storage and dispatch form a complete system can renewable energy truly assume the role of baseload.

 

III. Dispatchable low-carbon power sources: filling system gaps

 

Even in systems with a high proportion of renewable energy, there is still a need for dispatchable, low-carbon, and stable power sources to fill the gap. This is why nuclear energy and new nuclear technologies are receiving renewed attention: not due to an ideological shift, but rather because of systemic demands.

 

IV. Policy Consistency and Institutional Credibility

 

Capital needs stable signals on a ten-year timeframe, not slogans on a one-year timeframe. Without policy consistency, any transformation path will be discounted at the financial level.

 

V. Social equity and cost allocation mechanism

 

Whether the transformation can be sustained depends on whether the costs are distributed fairly. Without clear compensation, retraining, and support mechanisms, the transformation will encounter obstacles at the societal level.

 

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(Image caption) The world is not going in the wrong direction, but is simultaneously bearing the weight of the old and new systems; before engineering, finance, policy and society have been transformed in sync, the energy transition can only be a back-and-forth between "addition" and "substitution".

 

 

Conclusion | The world is stuck on energy not because it's heading in the wrong direction, but because it's focusing too heavily on that direction.

 

Looking back at the entire analysis, we can draw a sober but important conclusion:

 

The world doesn't not know where to go; it just isn't ready to bear the weight of that path.

 

The energy transition requires simultaneous changes:

 

This is a civilization-level project that cannot be completed by a single technology or short-term policy.

 

Therefore, being "stuck" is not a failure, but a transitional state.

Only when the power grid, energy storage, policy consistency, and social equity can be improved in tandem will the transformation move from "addition" to true "substitution".

 

Until then, the world will continue to oscillate between two states:

On the one hand, rapidly deploy clean energy,

On the one hand, fossil fuels are retained as a system insurance.

 

This is not the ideal situation, but it is the reality.

 

The real question isn't "why is it stuck?"

Rather, it's about whether we're willing to pay the real costs in terms of engineering, politics, and society to overcome this obstacle.