The green transition has become a battle over scarce resources

Five Sharp Takes with Christian Bay

Energy policy has changed in character. The ambitions of the green transition remain, but the debate is increasingly about something more tangible: capacity, prices, security and who should bear the costs. We asked Christian Bay, who works with energy and sustainability at SJ&K, to identify five developments worth understanding.

For many years, energy policy could largely be described in terms of ambition: more renewable energy, lower CO₂ emissions and faster electrification.

Today, those ambitions are coming up against physical and economic realities. The electricity grid has limited capacity. New energy infrastructure requires space and local support. Large investments involve risks that someone has to bear. And geopolitical uncertainty has turned security of supply into an issue that extends far beyond the energy sector.

This does not necessarily change the direction of the green transition. But it does change the debate about how we get there.

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1. What is the most important change in the energy sector right now?

Scarcity has moved to the centre of the debate. The electricity grid is a good example. Energinet has registered requests for 57 GW of new electricity demand, compared with current peak consumption of around 7 GW. A large share of the queue comes from batteries and data centres.

That makes capacity more than a technical issue. When not everyone can have the access they want at the same time, it becomes a question of allocation: Which activities should be prioritised – and on what basis? That is a very different conversation from the more fundamental debate about whether we want electrification in the first place.

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2. Does that mean climate has become less important?

‍Not necessarily. But the language surrounding the transition is changing. Security of supply, prices, competitiveness and electrification are taking up more space on the European energy agenda. At the same time, we are seeing in Denmark that new offshore wind projects once again require significant public support.

So the interesting development is not a simple shift away from climate towards something else. Several priorities now have to be addressed at the same time. The green transition must also be economically viable, resilient from a security perspective and possible to implement in practice.

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3. Where are the conflicts becoming most visible?

‍At the local level. Energy requires land, infrastructure and often very tangible changes to people’s surroundings. This applies to wind and solar power, but also to industrial parks, transmission infrastructure and data centres.

This is where major national ambitions encounter local questions: What does the local area gain from it? Who will be affected? Why does the infrastructure have to be located here? These questions do not necessarily reflect opposition to the transition. They are legitimate questions about how benefits, costs and risks are distributed.

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4. What do data centres mean for the energy debate?

‍They make an abstract dilemma very concrete. According to our analysis, more than 30 data centres are currently planned in Denmark, while their expected energy consumption is rising significantly.

This raises the question of what electricity should be used for. Data centres, industrial production, Power-to-X and electrification may all be legitimate uses, but they potentially compete for the same limited capacity. We are used to discussing how to produce more green electricity. Going forward, we will also need to discuss how that electricity should be prioritised.

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5. What should executives outside the energy sector be paying particular attention to?

‍Energy is no longer an issue only for energy companies. Access to electricity, security of supply and resilient infrastructure are becoming strategic considerations for a much wider range of businesses and public-sector organisations.

At the same time, energy infrastructure has become a security policy issue, and new requirements for preparedness are pushing responsibility further into executive teams and boardrooms.

This makes the energy agenda broader. It is, of course, still about technology and climate. But increasingly, it is also about security, investment, local legitimacy and the choices we make when not every priority can be accommodated at the same time.