The race to become an electrostate

“Petrol prices soar” is one of those surefire ways to catch the attention of the average Kiwi.

No wonder why. When petrol prices rise, millions of New Zealanders feel the cost each time they burn fuel to get places.

Other stuff gets pricier, too. It costs more to fuel a truck delivering your groceries to the supermarket, so the price of your cereal creeps up to cover it.

That is a big reason why inflation got bad in 2022 – when Ukraine was invaded, fuel prices skyrocketed. Our communities are built on burning cheap, imported fossil fuels. When world events drive up prices, everything is affected.

But what if petrol lost its power over us? What if when each of us read “petrol prices soar” on our phones, it mattered bugger all?

What if we never needed to worry about importing foreign oil and gas again?

It’s possible – if we electrify everything. I firmly believe that the 21st Century will be led by the countries that win the race to rid themselves of the shackles of fossil fuels.

The world won’t be defined by petrostates, no. We are entering the age of the electrostate.

Renewable energy got cheap. Really cheap.

The era of fossil fuels is over. Why? Because renewables are getting insanely cheap.

In 2010, solar power cost five times more than fossil gas. Fast forward to now, and solar power is way cheaper than any fossil fuels.

The best part is that solar power is still getting cheaper every year. China has gotten good at creating quality solar panels very cheaply.

Batteries are also getting cheaper, fast. Batteries are amazing because they turn solar power into an unmatched energy source. Having a high capacity battery alongside a solar panel means you can store energy when it’s sunny and allow it to provide reliable power day or night. This tech is getting cheaper at record pace: solar + battery power got 22% cheaper in the last year alone.

Every year that passes, innovators are making solar power better and cheaper. Solar is no longer the off-grid hippie’s expensive gadget. It makes financial sense to install it everywhere we can.

And, if countries decide to do so, it solves more than pollution. It upends the global order.

The era of the electrostate has begun

Most countries in the world don’t have loads of oil and fossil gas. Some, like Saudi Arabia, Norway, and the United States have shitloads.

These are the petrostates – countries that sell fossil fuels to places like New Zealand so we can power our economy.

When you depend on fossil fuels for energy, your success depends a lot on what petrostates want. The inflation crisis of the 1970s was, in part, because petrol producing countries stopped selling oil as political pressure or because of internal conflict. When you have power over another country’s energy, you have power over their politics.

Renewable energy unlocks a brand new world order where every country is more energy independent. Unlike fossil fuels, solar panels are not single use: installing it once means access to energy for decades. Imagine if every stove, semi-truck, smelter, and school could be powered by renewables. Countries could build electricity capacity and say goodbye to the risk of oil prices.

This is no longer fantasy land: things that seemed impossible to electrify, like steel smelters, are becoming cost effective to run off electrons. It's a matter of time before everything is better off run with electricity.

China has seen its advantage here: it has very few fossil fuel resources and does not want to be reliant on others for fuel. They have directed massive resources to build 45,000km of electric rail lines, cost competitive electric cars, huge solar farms, and efficient battery power. This effort has electrified 30% of their economy already. Once they electrify everything, they won‘t be under the thumb of petrostates.

China is also leaning into the electric world because it strengthens their global power and relationships. China processes the vast majority of minerals to build electric engines. They build cheap, quality EVs like BYDs that are taking over the world. They are leading the solar revolution. This power to produce solar allows China to offer energy independence to growing nations. It strengthens their relationships with the economic powerhouses of the future, and makes China necessary for their economic growth.

Developing nations making use of China’s electric expansion. Pakistani citizens have been switching on solar at unprecedented rates.

Even some petrostates are making the transition. Norway, an oil exporter, has been directing its fossil fuelled wealth to electrify everything. Nearly 90% of Norway’s new cars were electric last year.

China’s lead in the clean energy transition is a genuine challenge to the global control the United States has on politics. It is so serious that Biden wanted to match China in renewable manufacturing by bolstering electric vehicles and US manufacturing of solar energy. It was crucial for the climate and to maintain US power abroad.

Now, Trump reigns. Instead of trying to compete to export clean energy to the world, he is isolating allies with tariffs, trying to stop the inevitable electrification of their economy, and chanting “drill, baby, drill”.

Oil is volatile, expensive, and warms the world. In comparison, electrifying everything means cost savings for the economy and insulation from supply shocks. It’s no wonder so many are choosing electrification. New Zealand is well placed to do the same. That is, if politicians make more of this opportunity.

Will New Zealand choose to electrify everything sooner rather than later?

Our current leaders insist that New Zealand needs fossil fuels to survive the moments when the “sun isn’t shining and the wind isn’t blowing”. They’re stuck in last decade's thinking.

By building huge amounts of solar with batteries, sunshine can fuel huge parts of our energy demand. Combined with our existing hydro dams and geothermal energy, fossil fuels do not need to be part of the picture.

The Government has made some good changes to increase our renewable energy: unlocking offshore wind energy, setting up the power grid to be better for solar energy, setting targets to increase our geothermal options. These are genuine bright spots.

Yet, at the same time, the government is tarnishing our image abroad by deciding to bring back oil and gas exploration and subsidising new exploration. All this effort and money is being invested in the energy equivalent of a fax machine when the internet is cheaper and better.

If the government wants to make the most of the renewable revolution, we must focus on electrifying everything. Politicians could help electrify every car, bike, factory, and farm. Doing so would cut power costs, make businesses more viable, and slash our pollution to stop warming the world.

The race is on to free ourselves from the shackles of fossil fuels. Will New Zealand lead the pack, or wait until the rest of the world has already reaped the benefits?