Why protectionism could make the energy transition more accurate

The global transition of energy has long been framed as a necessary shift to sustainability, but the emerging economic and geopolitical challenges suggest that it may be time to reconsider the way we approach this transformation. While efforts to reduce carbon dioxide emissions remain a priority, new concerns about economic access and energy safety are remodeling the debate, raising questions about the feasibility of today’s strategies.

The challenge lies in the balance of long -term viability targets with short -term economic and political realities. The energy system operates in large investment cycles and the transition from fossil fuels requires significant infrastructure changes, capital investment and regulatory support. The momentum of Legacy Energy Systems, built for decades, cannot be reversed overnight.

The reality of energy transition

The energy transition had to be a story of innovation and the decline of costs. For years, the price of renewable energy has been reduced, driven by economies of scale, technological discoveries and globalized supply chains. But now, as governments are pushing for onshoring and economic nationalism, a new reality puts in pure energy it becomes more and more expensive.

Steven Knell, a professor in practice at the World Energy and Climate Policy Center at Soas University in London, does not mention words when it comes to this growing dilemma. “If the energy transition is done in the United Kingdom or takes place in the US, it lasts twice as long as it costs twice as long,” he explains. “And basically it means that, even from the most optimistic projections, we are lacking our climate goals.”

In the last decade, China has emerged as the dominant force in the production of solar, wind and battery, controlling more than 75% of world production capacity for basic clean energy technologies. With the hierarchy of scale and cost efficiency, China has made renewable sources accessible, accelerating global adoption. Now, governments in the US and Europe are trying to regain market share – but at a high price. “This energy transition,” Knell argues, “has always been a cost of cost. And now we make it more expensive than it should be.”

The increasing cost of energy transition

One of the most important challenges for the transition to energy was the variability of the cost. While the initial narrative focused on the reduced cost of renewable energy sources, the post-literary era has been significant inflation in technology and infrastructure costs. The price of basic components such as solar panels and wind turbines increased due to restrictions on the supply chain, increased costs of raw materials and increased competition for resources.

According to Knell, industry figures showed an increase in the cost of solar photovoltaics (PV) by about 25% from 2022 to 2023, questioning previous cases on the financial accessibility of the transition. While the cost has been reduced somewhat from the top of the stern of the supply chain, the price for selected goods and technologies remains relatively high.

In addition, political decisions have unintentionally led to the costs, as the growing politicization of energy policy has led to an increase in economic nationalism. Protective measures in United States And Europe, with the aim of reducing the dependence on Chinese supply chains, have increased construction costs, making the transition more accurate than originally foreseen. This is a challenge that is by expanding the supply chain. While the intention behind these policies-the creation of domestic job creation and energy security-is understandable, can ultimately slow progress by reducing access to the most cost-effective technologies.

Governments around the world give priority to local construction and supply chains, often at the expense of effectiveness and cost efficiency. While these policies are aimed at enhancing national energy security, they are also at risk of fragmenting the global market and blocking the development of critical renewable energy technologies.

Protection against economic access: hidden compromises

Such protective policies increase costs for consumers and slow down the transition. “Solar panels manufactured in the US cost 40 to 50 percent more than those imported from China,” Knell points out. “Wind turbines in Europe are already 20 to 30 percent more expensive. These price increases pass under the chain, which means that for everyday people, the transition is no longer as affordable as they once were.”

The irony is that many of the same governments that once supported low -cost renewable energy sources make deliberately more expensive, limiting imports and subsidizing ineffective domestic production. The result? Fewer projects, longer delays and higher prices – all at a time when energy costs are already an important financial concern.

“We live through a moment of cost inflation,” Knell explains. “Everything is more expensive and now those responsible for policy -making choosing to make the energy transition more accurate. The problem is that the more expensive it gets, the harder it becomes to sell to voters.”

Global South pays the price

Beyond the rich nations, protective energy policies have an even greater impact on emerging markets, where economic access is the most important factor in energy policy.

“The fastest growing energy demand is in the world south,” Knell points out. “These countries need low -cost renewable sources, and at the moment, the cheapest way to get them is from China. But if the US and Europe continue to push for invoices and local content rules, they make net energy less accessible to countries that need it most.”

For decades, fossil fuels remained dominant in developing nations because they were cheap and accessible. Renewable energy sources began to dispute them when the cost was dramatically reduced. Now, as a fragment of global supply chains, the fear is that the highest prices will slow down adoption and extend fossil fuel dependence.

“People who make these policies assume that governments will continue to pay, that companies will continue to invest,” says Knell. “But when the cost of the transition increases, support begins to erode. You start to lose the public.”

A lost bet for nationalism

The case for the construction of clean energy onshoring is often framed around energy security and job creation. But history suggests that governments often overestimate how quickly and effectively domestic industries can escalate.

“Look at the American Solar Industry,” Knell points out. “Despite the billions of motivations, US panels cannot compete with Chinese prices. In Europe, offshore winds are delayed because they are very expensive. Governments are trying to build a new supply chain one night, but these things take years.”

At the same time, the demand for clean energy is only increased. People will need to double electricity production by 2050 to keep up with electric drive and savings. The slowest and most expensive domestic production is at risk.

“This is not just a political problem – it’s economical,” Knell warns. “If we continue to make energy more accurate, people will begin to push back. And when that happens, the whole transition slows down.”

What is the alternative?

Knell believes that a realistic approach to global supply chains is the only way to keep costs under control. Instead of absolute protectionism, he argues, policy makers should focus on differentiation of suppliers instead of completely cutting China.

“The US and Europe do not need to do everything at home,” he says. “They just have to make sure they don’t depend on one country. This means investment in production in places such as India, Southeast Asia and Latin America. It’s not isolation – it’s a balance.”

At the same time, it highlights the need for better market structures and infrastructure reform. “At the moment, we have the offshore wind farms in the United Kingdom that are not even connected to the network,” Knell points out. “We pay for energy that is not used. This is a market failure and the determination would do more to reduce the cost of the slap in Chinese batteries. ”

In the end, the choice is simple: a cost -effective transition action or politically guided. “Energy transition is the most important economic shift of our lives,” says Knell. “We can’t do it more expensive than it should be.”

This is the economic reality of the green transition – and a warning to those responsible for the policy of betting on isolationism to ensure the future of pure energy. People need a low -cost, high -speed transition, not a costly, protective. The question now is whether politics will allow the economy to do its job.