The Energy Transition Is Happening. Just Not Fast Enough.
Solar and wind are now the cheapest electricity ever generated. The grid that needs to carry that power, and the politics surrounding it, are the real bottleneck.
The cost curves for solar and wind energy have been among the most dramatic in the history of technology. The cost of utility-scale solar has declined by more than 90 percent since 2010; offshore wind by more than 70 percent since 2015. In much of the world — the United States, Europe, India, China, Australia — new solar and wind installations are now cheaper to build and operate than new natural gas plants, and in many regions cheaper to build than continuing to operate existing coal plants.
This is a genuinely revolutionary change, and it is happening faster than the most optimistic projections from as recently as 2015 suggested. The International Energy Agency's forecast in 2010 that solar would supply 1 percent of global electricity by 2020 turned out to be roughly eight times too pessimistic; solar and wind together supplied approximately 14 percent of global electricity in 2024 and are on trajectory to reach 30 percent by 2030.
None of this means the energy transition is on track to meet the climate targets that science says are necessary to avoid catastrophic warming. The gap between where the transition is and where it needs to be is still large — driven not by the cost of clean energy generation but by the infrastructure, regulatory, and political conditions that determine how quickly clean generation can actually be built and integrated.
The grid as bottleneck
The electricity grid was designed to deliver power from large central generators — coal and natural gas plants — to distributed users. Clean energy requires a different grid architecture: one that can accommodate power from thousands of distributed sources (rooftop solar, offshore wind farms, large utility-scale arrays), handle the variability inherent in sun and wind generation, store energy when generation exceeds demand and release it when demand exceeds generation, and move electricity efficiently across longer distances.
The transmission infrastructure required for this transition is largely unbuilt in the United States. High-voltage direct current (HVDC) lines that can carry large quantities of power across long distances — connecting the abundant wind resources of the Great Plains to the large population centers of the coasts, or the solar resources of the Southwest to the industrial loads of the Midwest — are technically proven and economically viable. They face regulatory and permitting obstacles that make their construction timelines measured in decades.
The primary regulatory bottleneck is the permitting system for transmission infrastructure, which requires approval from every jurisdiction a line crosses and which provides ample opportunity for local opponents and competing interests to delay or block projects. FERC Order 1920, finalized in 2024, attempted to streamline regional transmission planning; its implementation is ongoing and its effectiveness remains to be demonstrated.
The queue for interconnection to the US electrical grid — the process by which new generation projects request connection and receive engineering studies and cost allocations — has grown from approximately 200 gigawatts of pending projects in 2016 to more than 2,500 gigawatts today, of which the vast majority are solar and wind. The average time from interconnection request to in-service date for a new project in the US is more than five years. This is not a cost problem; it is a regulatory and infrastructure capacity problem.
The storage question
Solar and wind are variable: they generate when the sun shines and wind blows, not necessarily when electricity demand is highest. Managing this variability at scale requires storage — either batteries that can hold energy for hours to days, or longer-duration storage that can hold it for weeks to seasons.
Lithium-ion batteries, whose costs have followed a similar trajectory to solar — declining by approximately 90 percent since 2010 — are now economic for four to eight hours of storage and are being deployed at scale. The United States added approximately 22 gigawatt-hours of battery storage in 2024, a significant increase but still a small fraction of what the grid will require.
The challenge is duration. Four to eight hours of storage handles the daily mismatch between solar peak generation (midday) and demand peak (early evening). It does not handle multi-day weather events where wind and solar generation are simultaneously low across large regions, or seasonal variation where solar generation is much lower in winter than summer. These longer-duration storage challenges require different technologies — pumped hydro (limited by geography), flow batteries (expensive), green hydrogen (inefficient but improving) — that are earlier in their cost reduction curves.
Metaculus forecasts a 71 percent probability that utility-scale battery costs will decline below $100 per kilowatt-hour before 2030, which would make eight-hour storage broadly economic and substantially reduce the variability challenge for moderate grid penetrations of renewables. The probability that longer-duration storage will reach commercial scale before 2030 is substantially lower — around 28 percent for technologies other than pumped hydro.
The political backlash
The energy transition has generated a political backlash that is partly about climate ideology and partly about the real distributional effects of the transition on communities whose economic identity is bound up with fossil fuel production.
Coal communities in Appalachia, Wyoming, and elsewhere face a genuine economic transformation that the energy transition is accelerating. The communities that have hosted coal mines, natural gas processing facilities, and fossil fuel power plants have received real economic benefits — employment, tax revenue, contract work — that have structured local economies for generations. The transition's benefits are diffuse and long-term; its costs, for these communities, are concentrated and immediate.
The Inflation Reduction Act's clean energy incentives have generated substantial clean energy investment in many of the same states that are most politically resistant to climate policy — Texas, Wyoming, Oklahoma — because the economics of clean energy are good regardless of climate politics. But they have not been sufficient to address the specific displacement effects in specific communities, and the political salience of fossil fuel communities in key electoral states has allowed the concentrated costs to continue to drive national energy policy in directions that are inconsistent with the aggregate interest.
Kalshi was trading a contract on whether the US will achieve 50 percent clean electricity by 2030 — the Biden administration's target — at 41 percent. The target is ambitious relative to current trajectory; whether it is achieved will depend heavily on whether the permitting and transmission bottlenecks can be resolved faster than they have been.
Daniel Osei is a staff writer at The Auguro covering climate, energy, and environmental policy.