This excerpt from the Stanford Emerging Technology Review (SETR) focuses on energy, one of ten key technologies studied in this educational initiative. SETR, a project of the Hoover Institution and the Stanford School of Engineering, harnesses the expertise of Stanford University’s leading science and engineering faculty. Download the full report here and subscribe here for news and updates.
Energy is the lifeblood of modern society—enabling heating, cooling, light, mobility, information, and the creation of modern materials. Because it touches everything, everywhere, all the time, energy plays out against a complex backdrop of technology, economics, regulation, and consumer behavior. Key elements of this backdrop include the following:
Growing demand: As several billion people in the developing world lift themselves out of poverty, global energy consumption is projected to increase by some 50 percent between 2020 and 2050. That increase is not a luxury but is essential to their improved quality of life.
The “energy trilemma”: It’s not enough that energy systems produce and deliver energy. They need to do so reliably, affordably, and cleanly, with “clean” referring to both local and greenhouse-gas emissions. (“Local” refers to particulates emitted in the immediate vicinity of a power plant.) Those three dimensions are often expressed as the energy trilemma.
It is rare to find technologies that simultaneously satisfy all three desiderata. In the US electricity sector, conventional coal is secure and affordable but generally emits greenhouse gases; natural gas is much cleaner locally but still emits carbon dioxide (CO2); wind and solar are affordable and non-emitting but unreliable; and nuclear power is both clean and reliable but more expensive than alternatives. The trilemma suggests that no single type of energy source will always be right under all circumstances.
Meanwhile, the United States has shifted from climate urgency to energy dominance, redirecting support from renewables and electric vehicles to fission, coal, and natural gas. Globally, similar trends prevail as nations record peak fossil-fuel use and scale back renewable investments, prioritizing energy security over decarbonization.
Energy innovation is fragmented, diverse, and geopolitically strategic, with progress in technologies like fission, geothermal, fusion, and batteries reshaping the energy frontier. To compete with China, US technology leadership depends on sustained research and development funding, robust supply chains, and strategic industrial policies.
Innovation and limitations
The challenge of resolving the energy trilemma has engendered a furry of technological innovation. That effort has dramatically reduced the costs of onshore wind and solar generation, improved battery performance and economics, surfaced promising geothermal technologies, and rekindled interest in nuclear power, particularly designs for small reactors. Although the many innovations on today’s drawing boards will not have a major impact for years, they are the foundation for a more affordable, more reliable, and cleaner energy future in the longer term
Hydrocarbons derived from fossil fuels (coal, oil, and natural gas) supplied 86 percent of the world’s primary energy in 2024. (“Primary energy” refers to energy sources before they have been converted to electricity.) Wind and solar generation, while growing rapidly, accounted for 6.5 percent of primary energy the same year.
Wind- and solar-generated electricity remain substantially cheaper than electricity generated by fossil fuels and also accounted for more electrical energy in 2024 than in any previous year. However, the drawbacks of a renewable-heavy grid are becoming apparent. They include the following:
- The cost of the dispatchable backup generation required to ensure high reliability (“dispatchable” refers to power sources that can be adjusted up or down on demand).
- The difficulties of synchronizing generators that lack mechanical inertia, which makes it harder to bring them online smoothly.
- The fire risks of grid-scale battery storage.
- The critical materials required by clean energy technologies—materials that the United States heavily imports from countries whose interests do not always align with US interests (e.g., rare earths from China and cobalt from the Congo).
Energy is delivered to end users by systems, and those systems are hard to change, for fundamental reasons. They involve large investments in assets that last decades, their parts need to work together (e.g., cars, fuel, and the fueling infrastructure must all be compatible), and there are many stakeholders whose interests often don’t align. It also takes time to refine the hardware and operating procedures that ensure high reliability and efficiency. Energy systems are therefore best changed slowly and steadily over decades.
Greater efficiency of end use (e.g., more miles per gallon in a vehicle or more lumens per watt in a light-emitting diode, or LED) is often invoked as an energy-saving measure. Yet such savings can be partially, or even totally, offset by direct rebound (i.e., greater efficiency leading to greater use) or indirect rebound (i.e., energy savings redirected to other uses).
A paradigm shift
Aspirations for an accelerated energy transition have collided with scientific and techno-economic realities. These collisions, many of which predate the current US presidential administration, have led to a new pragmatism in energy matters as the transition’s costs and challenges become increasingly apparent. There is now more attention on an energy source being affordable and reliable than a single-minded focus on mitigating greenhouse gas emissions.
This pragmatism is reflected in the repeal of most tax subsidies for emissions mitigation in the US Inflation Reduction Act and by the Trump administration’s elevation of energy reliability and abundance, if not “energy dominance,” over emissions-mitigation efforts. This shift is embodied in legislation that eliminates tax credits for new wind and solar projects—including the Production Tax Credit and Investment Tax Credit, which had catalyzed renewable deployment for decades. New legislation has also expanded federal support for nuclear power, geothermal, and natural gas infrastructure, including fast-track permitting and loan guarantees.
Regulatory agencies also have undergone significant restructuring. The Department of Energy launched the largest deregulatory effort in its history, proposing to eliminate or modify forty-seven regulations, ranging from appliance-efficiency standards to environmental review procedures. According to the DOE, these changes are expected to save consumers an estimated $11 billion and reduce regulatory text by more than 125,000 words.
Congress has passed the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act, which facilitates reactor deployment and strengthens export capabilities. The latter is needed to compete with aggressive Chinese and Russian expansion of their nuclear exports.
A number of global developments during the past year reflect this trend as well:
- Global consumption of each of the major fossil fuels (coal, oil, and natural gas) hit a record high in 2024, despite record investments in renewable energy.
- Mandates banning internal combustion engine vehicles are facing mounting resistance in Europe.
- Companies are quietly retreating from public sustainability commitments amid a political backlash.
The emerging zeitgeist is that all three legs of the trilemma are important—a change that will temper, but not halt, sustainable energy research and development and deployment efforts.
