The Unstoppable Force: Why Economics Trumps Politics in Energy

If you only read the headlines in 2025, you might think the renewable energy transition is in trouble. In the United States, the political rhetoric against “woke capital” and ESG (Environmental, Social, and Governance) investing has reached a fever pitch, with legislative efforts in multiple states aiming to block renewable projects. In Europe, a populist pushback against green mandates is making waves, challenging everything from heat pumps to EV mandates. And in China, the world’s largest emitter, coal production just hit another record high of 182 exajoules.

The narrative seems clear: The green dream is hitting the hard wall of political reality. Proponents of fossil fuels are declaring victory, arguing that the “unreliable” and “expensive” nature of renewables has finally been exposed.

But if you look at the hard data—the order books, the interconnection queues, the capital expenditure plans of major utilities, and the balance sheets of global energy majors—a completely different story emerges. The renewable energy transition has crossed a critical threshold where it no longer relies on political goodwill, subsidies, or moral arguments to survive. It has become an unstoppable economic force, driven by the cold, hard logic of profit and loss.

This isn’t about saving the planet anymore. It’s about saving money. And in the brutal arena of global capitalism, money always wins.

The Political Mirage: The Case of Vineyard Wind

To understand why politics is losing its grip on the energy transition, we need to look no further than the saga of Vineyard Wind.

Located 15 miles off the coast of Massachusetts, this project was poised to be a flagship for US offshore wind—the first commercial-scale utility offshore wind farm in the nation. However, for years, it became a lightning rod for political opposition. During the previous administration, the project faced delay after delay. Critics cited everything from radar interference with commercial fishing vessels to impacts on the North Atlantic right whale. It was the perfect test case for the “anti-renewable” political agenda, a symbol of how regulatory sand in the gears could grind a project to a halt.

Yet, in late 2024 and early 2025, a series of quiet but decisive legal victories cleared the path for completion. By mid-2025, turbines were spinning, sending power to the New England grid. What happened? Why couldn’t the political headwinds stop the blades?

The Legal Firewall

The answer lies in the American judicial system’s reverence for contracts and property rights. Federal judges ruled that the regulatory frameworks established for these projects create binding obligations. When a company invests billions of dollars based on a “Record of Decision” from the federal government, the government cannot simply reverse course because the administration changes.

[!NOTE] Key Legal Precedent: The courts have consistently held that “arbitrary and capricious” changes to regulatory status violate the Administrative Procedure Act. Once the steel is in the water and the contracts are signed, the “legal firewall” protects capital-intensive energy projects from political volatility.

This is a critical, often overlooked dynamic. Energy projects operate on 30-year timelines. Political cycles operate on 4-year timelines. If every election cycle could cancel the previous administration’s infrastructure projects, nothing would ever get built. The courts ensure that capital investment creates permanence. The lesson from Vineyard Wind is clear: While politicians can slow things down with red tape, they cannot easily dismantle the economic and legal machinery of the energy market once it is in motion.

The Economic Gravity: LCOE in 2025

While judges protect the projects, it is the Levelized Cost of Energy (LCOE) that ensures their dominance.

LCOE matches the total cost of building and operating a power plant over its lifetime (including capital costs, fuel, operations, and maintenance) divided by the total electricity it produces. It is the single most important metric in the energy industry. It tells a utility CEO not what is “cleanest,” but what is “cheapest.”

In 2025, the math is brutal for fossil fuels.

The Crossing of the Curves

According to the latest industry data from Lazard and BloombergNEF, we have reached a “crossing of the curves” that many analysts predicted would happen in 2030, but has arrived five years early.

$LCOE_{Solar} < MC_{Coal}$

In many parts of the US and the world, the all-in cost of building a new solar or wind farm is now lower than the marginal cost of simply buying fuel for an existing coal or gas plant.

Energy Source	2025 LCOE ($/MWh)	Trend
Utility Scale Solar	$28 - $41	↘ Declining
Onshore Wind	$30 - $48	↘ Declining
Natural Gas (Combined Cycle)	$45 - $75	↗ Rising (Volatility)
Coal	$68 - $118	↗ Rising (Carbon/Regs)

Data approximated from 2024-2025 Industry Averages.

Wright’s Law vs. Geology

The fundamental reason for this divergence is that renewable energy is a technology, while fossil fuel energy is a commodity.

Technologies follow Wright’s Law (often conflated with Moore’s Law), which states that for every cumulative doubling of production, costs fall by a constant percentage. Solar modules have dropped in price by nearly 90% over the last decade. Batteries have dropped by 80%. As we build more, we get better at it, and it gets cheaper.

Fossil fuels, conversely, face the problem of depletion. We have already mined the easiest coal and drilled the easiest oil. To get more, we have to dig deeper, go farther offshore, or frack harder rock. This means the long-term cost curve for fossil fuels is flat or rising, while the cost curve for renewables is asymptotically approaching zero.

Zero Marginal Cost

The “killer app” for renewables is Zero Marginal Cost. Once you build a solar farm, the fuel is free. A gas plant, by contrast, is exposed to the volatility of global commodity markets. In a world of geopolitical instability—wars in Eastern Europe, tensions in the Middle East—a power source that doesn’t need to import fuel is not just “green”—it’s a national security asset. Utilities know this. They aren’t buying solar to be nice; they are buying it to hedge against gas price spikes.

The Missing Link: The Storage Revolution

For years, the critics had one valid point: “The sun doesn’t always shine, and the wind doesn’t always blow.” Intermittency was the Achilles heel of the renewable argument.

In 2025, that argument is dying a rapid death.

The collapse in battery prices—driven largely by the EV supply chain war between Tesla and Chinese manufacturers like CATL and BYD—has made Grid-Scale Storage economically viable.

We are seeing the deployment of massive “4-hour” and “8-hour” battery systems that soak up cheap solar power at noon and discharge it during the evening peak (the famous “Duck Curve”).

• Sodium-Ion Batteries: The emergence of sodium-ion technology in 2024/2025 has been a game-changer. These batteries use cheap, abundant salt instead of expensive lithium. They are perfect for stationary storage where weight doesn’t matter.
• Virtual Power Plants (VPPs): Utilities are connecting thousands of residential Powerwalls and EVs into aggregated networks that act like a massive, distributed power plant.

With storage becoming cheap, renewables are becoming dispatchable. A solar farm paired with a battery system is functionally equivalent to a gas peaker plant, but with a fixed fierce price and zero fuel risk.

The China Question: Peaking the Dragon

The most common counter-argument to the renewable transition is: “What about China? They are building more coal plants than the rest of the world combined.”

This is effectively true—China did start construction on 95 GW of coal capacity in 2024. But looking at capacity ignores the reality of generation.

The “Peaker” Shift

China is undergoing a massive structural shift in how it operates its grid. Historically, coal provided “baseload” power—running 24/7. Today, China is building coal plants to act as peakers.

These new plants are not designed to run all day. They are designed to turn on only when the sun isn’t shining and the wind isn’t blowing to support the massive “Clean Energy Bases” in the Gobi Desert.

• Utilization Rates: The average utilization of Chinese coal plants is forecast to drop sharply, likely below 40% by 2026. Only running a coal plant 30-40% of the time destroys its economics, further incentivizing the shift to storage solutions.
• The 2025 Peak: Based on Q1-Q3 2025 data, approvals for new coal plants have collapsed. Multiple independent analyses now confirm that China’s coal consumption likely peaked in 2024/2025.

[!IMPORTANT] The Data Point: In 2025, China’s coal demand is expected to fall for the first time in eight years. This is the signal that the “insatiable dragon” has finally been sated by renewables.

China installed more solar in 2024 than the US has installed in its entire history. The momentum of their manufacturing engine—producing modules at $0.09/watt—has flooded the world with cheap energy tech, effectively subsidizing the global transition.

Future Outlook: The Abundance Mindset

We have passed the tipping point. The debate over “if” the transition will happen is over. The only question remaining is “how fast.”

The political headwinds in the US may cause friction. They may delay interconnection cues or create tariff barriers that temporarily raise prices. But they cannot reverse the physics of the market. The transition is now on “autopilot,” driven by the relentless gravity of lower costs.

There is a broader philosophical victory here as well. The old energy model was based on scarcity—collecting limited resources (coal, oil, gas) and burning them. The new energy model is based on abundance—harvesting unlimited flows of energy (sun, wind) using manufacturable technology.

In the end, the winner of the energy wars wasn’t decided in the halls of Congress or the rallies of a campaign. It was decided on the spreadsheets of project developers and utility CFOs. And the math is undeniable: Renewables have won.