Energy shortage is a lie

This article is part of In conversation about sustainable finance & emission reduction systems, a new series by Diego Balverde. You're reading volume three of the Energy Shock. Here is volume two

Prologue

The world is not running out of energy it is running out of systems capable of delivering it at scale and with stability because the global energy system already operates at a magnitude exceeding 170,000 TWh annually while electricity demand alone has surpassed 30,000 TWh and continues to grow above 4% per year driven by electrification digital infrastructure and climate pressure, with peak system loads measured in tens of terawatts across interconnected regions, yet despite this unprecedented scale markets continue to experience shortages volatility and price spikes exceeding 40% in short timeframes and electricity markets have recorded intraday peaks above 200 euros per MWh, revealing a structural contradiction where supply exists but cannot be accessed efficiently, meaning that the real problem is not the absence of energy but the inability of infrastructure logistics and financial coordination to convert available capacity into usable and stable energy flows.

Scarcity is structural, not physical

Global energy systems are structurally fragmented and that fragmentation creates the illusion of scarcity because energy cannot move freely across regions due to infrastructure constraints as pipelines are geographically fixed LNG depends on liquefaction and regasification capacity concentrated in limited nodes and electricity grids remain regionally bounded systems restricting flows measured in hundreds of gigawatts between markets, leading to simultaneous conditions of oversupply and shortage as renewable curtailment can exceed 3,000 TWh globally due to grid congestion while other regions rely on high cost generation, with price differences exceeding 200% between neighboring markets, meaning that energy availability is determined not by production capacity but by connectivity and that scarcity is not physical but the result of system architecture.

Misallocation destroys value at scale

When energy cannot reach demand centers the system destroys value at a massive scale because low cost generation is wasted while high cost energy is used simultaneously, creating inefficiencies that translate directly into industrial losses as energy intensive sectors can experience cost increases above 30% within short periods leading to production cuts relocation or shutdowns, while governments deploy fiscal measures exceeding tens of billions annually to contain price impacts without addressing structural bottlenecks, and this misallocation results in lost economic output measured in hundreds of billions globally as inefficient energy flows propagate through supply chains affecting food production logistics and employment, meaning that the energy system is not only inefficient but systematically eroding economic value.

Volatility is a structured market

Energy volatility is not accidental it is embedded in the structure of the system because price spreads between regions and timeframes measured in TWh scale flows create arbitrage opportunities that can exceed 20% to 50% during stress periods, while LNG markets have demonstrated price multipliers of 2 to 4 times and freight costs have increased above 100% depending on route disruption, allowing actors controlling storage infrastructure and trading capabilities to capture significant margins, meaning that volatility redistributes value rather than destroying it and transforms infrastructure into a financial asset where control of flows timing and access determines profitability, concentrating returns in actors positioned within the system.

From abundance to access: The real transformation

The real energy transition is not from fossil fuels to renewables but from abundance to access because producing more energy does not solve the problem if the system cannot deliver it, which requires expanding infrastructure capable of handling thousands of gigawatts of transmission increasing interconnections between regions integrating storage systems that can cover 25% to 30% of peak demand deploying battery capacity expected to exceed 500 GWh globally implementing demand response systems that reduce peak loads by 10% to 15% and digitalizing system management to optimize flows in real time, while at the financial level it requires structuring capital through vehicles that align returns with system efficiency including long term contracts volatility linked revenue models and infrastructure backed instruments, and within this architecture the integration of environmental intelligence data analytics market execution and capital allocation through platforms combining capabilities such as NatureAlpha StoneX and BlackRock enables system level optimization, positioning models like BalGreen to convert efficiency emissions reduction and volatility management into scalable financial returns.

System design is where value is captured

The energy system is evolving into a financial architecture where value is captured through control of flows rather than ownership of resources meaning that grids storage logistics and ports become primary value drivers because they allow control over energy measured in gigawatts and terawatts across time and geography, enabling arbitrage of volatility and creation of structured returns, and integrating infrastructure with financial engineering allows conversion of operational efficiency into monetizable outcomes transforming emissions reduction efficiency gains and system optimization into revenue streams and redefining energy systems as platforms for value capture rather than cost centers.

Analysis

If the global system already operates at more than 170,000 TWh annually and electricity demand exceeds 30,000 TWh with peak loads measured in tens of terawatts, why do shortages persist and who benefits from maintaining that perception of scarcity, if more than 3,000 TWh of renewable energy can be constrained due to grid limitations while high cost generation is activated elsewhere how much value is destroyed every year and who captures the spread between wasted and expensive energy, if electricity demand is growing above 4% annually requiring expansion of thousands of gigawatts of grid capacity why does investment continue to prioritize generation over transmission and storage, is this a misallocation of capital or a structural design that benefits actors capturing volatility, if price spreads exceeding 20% to 50% exist across regions and flows measured in hundreds of gigawatts cannot be redirected efficiently who captures these margins and why are most economies positioned only as cost absorbers rather than value capturers, if governments deploy tens of billions to stabilize prices instead of investing in infrastructure capable of managing terawatt scale demand are they solving the problem or reinforcing it, if electrification accelerates without equivalent expansion of system capacity is the transition reducing emissions while increasing fragility, and if scarcity is structural rather than physical why does the global debate remain focused on production instead of system control and value capture.

Conclusion

Energy shortage is not a physical reality but a systemic outcome of fragmented infrastructure limited connectivity and misaligned financial incentives meaning that the future of energy will not be defined by how much is produced but by how efficiently it is delivered integrated and monetized, and those who understand this shift will move from managing volatility to capturing it transforming infrastructure into a source of profit and redefining global economic power through control of energy systems.

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