Chapter 5 — The Escape Hatches

Three reasons are given for optimism. None of them work.

This is Chapter 5 in a series walking through the core arguments of my forthcoming book “The Energy Trap: Why the Renewable Energy Transition Can’t Work — And What Can”. Start with Chapter 1 here.

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BY NOW, you may be looking for a way out. The dominant energy supply is depleting. The proposed replacement returns less net energy than the system it replaces. The physical buildout is beyond anything attempted in human history. Surely there must be an escape.

Enthusiasts of the renewable transition commonly offer three: efficiency, hydrogen, and decoupling. Each sounds plausible. Each is popular with policymakers precisely because it allows them to avoid confronting the energy cliff described in Chapter 4. And each collapses on contact with the evidence.

This matters because these are the last three reasons anyone has for believing the transition can work. If they fail, there is nowhere left to hide.

Escape hatch 1: Efficiency

The argument is intuitive. If the energy supply is shrinking, we’ll simply use less — better insulation, better engines, better lighting. Efficiency will close the gap that physics has opened.

In 1865, the economist William Stanley Jevons noticed that Britain had dramatically improved the efficiency of its steam engines. Coal was being used more productively than at any point in history. Yet coal consumption was soaring. Why? Because more efficient engines made coal cheaper to use, which made people use more of it — in more places, for more purposes, in industries that had never previously been worth powering. This is the Jevons Paradox, and it has held for 160 years.

Consider lighting. The LED bulb uses roughly 80% less electricity than the incandescent bulb it replaced. If efficiency reduced consumption, global electricity use for lighting should have collapsed. It rose. Cheap, efficient light made it economical to illuminate car parks, building facades, advertising hoardings, and entire city skylines that nobody would have lit with incandescent bulbs. Total electricity consumed by lighting continues to increase.

Or consider cars. American fuel economy standards have roughly doubled the efficiency of new vehicles since 1975. In the same period, vehicle miles travelled rose by more than 40%. People responded to cheaper motoring not by driving the same distance on less fuel, but by driving further and buying heavier vehicles. Total US gasoline consumption did not fall.

The most comprehensive review of the evidence — 33 studies — found an average economy-wide rebound of 58%. For every ten units of energy that improved efficiency should have saved, fewer than five were actually saved. The rest were spent on doing more. No country in history has reduced its aggregate energy consumption through efficiency gains while maintaining or growing its economy. Not one. Efficiency is not a way of reducing energy use. It is a way of using energy more productively — which, in practice, means using more of it.

Escape hatch 2: Hydrogen

Hydrogen is the most abundant element in the universe. It is also the most seductive distraction in energy policy, because it is not a fuel. It is an energy carrier — a way of storing and moving energy that has already been generated elsewhere. Natural hydrogen deposits exist but remain at the earliest stage of exploration. Today, virtually all of the almost 100 million tonnes produced annually is manufactured — from natural gas and coal — making hydrogen a carrier of fossil energy, not an alternative to it.

The round-trip efficiency of the full chain — electricity to hydrogen and back to electricity — is roughly 25-35%. For every three units of renewable electricity you feed in, you get roughly one back. The other two are waste heat. Compare this with a lithium-ion battery, which returns 85-95%. Hydrogen does not solve the storage problem. It makes it three times worse.

And the scale is staggering. The world currently produces almost 100 million tonnes of hydrogen per year, virtually all from natural gas and coal. To replace that production with electrolysis would require approximately 3,600 TWh of electricity — roughly the entire annual output of the European Union. That is before any new uses. Just replacing current fossil-based hydrogen production would require doubling Europe’s electricity system and dedicating all of the new capacity to hydrogen.

Then there is the infrastructure that does not exist. Hydrogen is the smallest molecule in nature. It leaks through seals and welds that are perfectly tight for natural gas. It diffuses into the crystal structure of steel, embrittling it — weakening pipelines and pressure vessels in ways that are difficult to detect. You cannot repurpose the existing gas grid. You would need to build a new one from scratch, from specialised materials, at a cost no government has seriously estimated. Oh and, unlike hydrocarbon gas, it can spontaneously ignite under rapid decompression — no spark required.

The hydrogen economy takes expensive renewable electricity, throws away two-thirds of it, stores the remainder in a gas that destroys its own containers and ignites without a spark, and calls the result clean energy.

Escape hatch 3: Decoupling

Every net-zero plan on Earth rests on an assumption so central it is rarely stated: that the economy can keep growing while using less energy. This is called decoupling — the idea that GDP and energy consumption, having risen together for the entire history of industrial civilisation, can now go in opposite directions. Green growth. More from less.

The evidence for it is an accounting trick.

When Britain claims its carbon emissions have fallen since 1990, it counts only what is burned within its borders. It does not count the energy embodied in the steel, cement, electronics, and manufactured goods it imports from China, where the coal is actually burned. The Office for National Statistics found that UK consumption-based emissions were 37% higher than territorial emissions. The country had not decoupled. It had offshored.

This is not a minor discrepancy. A study of 186 countries found that the resources consumed by wealthy nations through trade were roughly three times larger than the physical quantity of goods crossing their borders.

At the global level, the picture is unambiguous. World primary energy consumption has risen every year for which records exist, barring brief dips during wars and recessions. In 2024, it rose by 2.2% — faster than the average of the previous decade. The services economy has not dematerialised economic activity. It has relocated it. A hospital consumes energy. A data centre consumes energy. A lawyer’s office is heated, lit, cleaned, and supplied with paper, coffee, electronics, and human beings who ate breakfast — all of which required energy to produce and deliver. The “weightless economy” weighs exactly as much as the economy.

The most comprehensive review — 835 empirical studies — concluded that the only countries to have achieved sustained absolute reductions in energy use were those that had experienced economic crisis. Not green policy. Not innovation. Recession. The relationship between GDP and energy has not been broken. It has been hidden behind a shipping container from Shenzhen.

The hatches are closed

Efficiency increases consumption. Hydrogen destroys more energy than it stores. Decoupling is offshoring with better PR. The escape hatches are closed.

In Chapter 6, I’ll follow the consequences into money — because when you destroy an energy system, the financial system built on top of it does not survive the fall.

Richard

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This is the sixth in a series previewing the core arguments of my forthcoming book “The Energy Trap: Why the Renewable Energy Transition Can’t Work — And What Can”, on release later this year.

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