Climate Denial Crock of the Week

Wall Street Journal:

Green energy was supposed to be the unreliable one.

The obvious lesson from the state bailout of German utility Uniper agreed UN01 -12.69%▼ on Friday is geopolitical: Russia has turned out to be an untrustworthy partner. But another plotline in this cautionary tale is the shift toward sustainable power sources, which is making fossil fuel markets more brittle and uncertain.

Natural gas was once seen as a safe, reliable fuel that would complement growing supplies of renewable power during the energy transition. Uniper bet the house on Russian sources. When Moscow weaponized energy, the utility was left buying expensive gas on the spot market to replace the shortfall in Russian deliveries. Berlin has stepped in with a total of €15 billion, equivalent to $15.3 billion, in equity and credit lines, prompting wild movements in the stock. It fell almost 8% Monday after a 29% plunge Friday.

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The transition could now be happening faster than expected. Fossil fuel investments remain limited, despite today’s tight supply and high prices. In contrast, clean energy investments are rising as many sustainable options are already cost effective. Two-thirds of electricity is generated in countries where it is cheaper to build new solar or onshore wind than to run existing coal or gas power facilities, according to BloombergNEF.

There are other forces for change too: Extreme weather is testing existing facilities; energy security has re-emerged as a priority; and higher fuel and emission prices increase the risk of stranded assets.