March 13, 2025

Written By: Pelino Colaiacovo

Maybe a medical metaphor is the wrong kind to use? It might be better to ask whether the Energy Transition has gone into hiding? Or maybe… maybe, it has gone underground? Like the “hero” in a movie that is accused of a crime, and is running scared but with an extremely-unlikely-but-sure-to-work-in-the-end “plan” to prove their innocence! Ok, whatever….

Donald Trump is President of the United States – again! – and in addition to vowing to reverse all support for renewable energy, quit all climate change treaties and agreements, and rescind any policy that was ever promulgated by a Democrat or a non-MAGA Republican (well, OK, maybe that last bit is hyperbole, but it sure feels that way…), he has also completely distracted the world from all other problems by declaring a multilateral trade war and withdrawing support from Ukraine in its hour of need. Clearly the Energy Transition is in trouble in the United States, and everywhere else any government who still supports it is now too busy dealing with the immediate or perceived threat of Trumponomics to worry about it!

Or is that really true? Is the Energy Transition just about government policy? Without a constant policy focus, does it just die on the vine, wither away, disperse like a puff of bad air?

Actually

• The cheapest cars in the world are now EVs made in China. They are being sold in Asia, Africa, Latin America and the Caribbean, and are also entering Europe. Even if North America will not see any of them any time soon, the global auto market is changing before our eyes, with long-term consequences for petroleum demand and hence production. In 2024, EVs accounted for about 17 million new car sales out of a global total of 77 million (a 22% share for EVs, and growing rapidly). Traditionally, the transportation sector globally consumed about 65% of all petroleum produced, but with sharply declining sales of gasoline and diesel vehicles, how long will that level of demand hold?
• Solar photovoltaic facilities are the cheapest form of electricity production in many parts of the world, on a totally unsubsidized basis. In other places, wind power holds that honour. True, electricity systems can’t run with just these resources, but dollars and cents (or Euros, Pesos, Yen, Reai, Renminbi or what have you) mean that more renewable energy projects will be built in most parts of the world, regardless of the fact that Mr. Trump prefers “drill baby drill” to “spin me right round baby right round” or “sunshine of your love”.
• Air-to-air and air-to-water heat pumps are now the cheapest form of residential and small commercial heating and cooling in any jurisdiction that has winter
  low-temperatures warmer than -5 C. That doesn’t help much in Canada, but it applies to most of the population in the world. Global production of heat pumps is growing by leaps and bounds (10% CAGR expected until at least 2030), and the technology continues to improve rapidly. Supportive policy helps, but is not necessary for continued growth, which will mean less use of natural gas, propane and fuel oil for heating in the future (and more efficient cooling in warm months).
• Billions of Dollars, Euros, Yen, Renminbi, etc. have been and are being invested around the world on better battery technologies (solid state, lithium-sulphur, zinc, graphene, etc.), more efficient and powerful electric motors (magnet-free, axial flux, etc.), higher performing and cheaper insulation materials (ultra-high reflectivity coatings, nanoparticles), more efficient and safer nuclear technologies (SMRs, Gen-V), cheaper hydrogen production (biological, high pressure electrolysis, photoelectrochemical, etc.), and a host of other advancements, all of which are continuing to result in announcements of breakthroughs on an almost daily basis, which are leading to the founding of new businesses and business models that are reshaping the way the global economy will generate and consume energy.

So if the Energy Transition is about the move away from fossil fuel-based energy, and towards greater use of electricity that is generated through non-emitting sources, this seems to be still happening, and potentially at an even faster pace than in the past two decades. This is where the analogy of a “supertanker” can be applied not only to the fossil fuel economy of the past 100 years, but also to the new “green” economy that has been formed over the past 20: it is now so large, with so much capital behind it, that it has developed an inertia of its own.
Mr. Trump can try to push the bow of the Energy Transition tanker to one side, but he is unlikely to change its course substantially in his four-year term.

Here in Canada, the consumer carbon tax is about to die. If the government in Ottawa changes political stripe, more green energy programs could disappear as well. But many provinces are still going to be procuring wind and solar power projects, as well as electric battery storage facilities, and hydrogen or ammonia production and sale to Europe may still make sense. Not to mention new nuclear builds! And many new electricity transmission lines, and distribution expansion to serve electric cars, etc.

Behind all of this, of course, are these two not-so-little sad realities:

Figure 1: Global Average Temperature Compared to 1951-80 Average (NASA)

Figure 2: Observed CO2 Concentration in the Atmosphere (NOAA)

Despite the fact that President Trump’s administration may defund the agencies that collect the scientific data which support these graphs, the impacts of this changing climate reality – in heat waves, hurricanes, fires, droughts, and general climate and political instability, with more and more acute (and uninsurable!) economic losses and human suffering – will only be increasing.

Temporary lack of action by governments on the Energy Transition – and downright hostility from the Trump administration and potentially other similarly inclined governments – may mean that, locally and temporarily, the public profile of the issue falls, but the general trend of an advancing Energy Transition on a global basis is not going to be changing direction. It will continue to make sense to look for business opportunities in all of its various nooks and crannies – I know I will!