Energy transition planning frequently begins with a foundational assumption that carries significant implications: the current energy market’s scale and composition remain static in future scenarios. This approach frames the transition challenge as primarily a technological substitution problem, replacing fossil fuels with low-carbon alternatives at equivalent volumes. However, this framework may inflate the actual magnitude of the transition required, as multiple factors reshape demand patterns during the energy shift.
Industries undergo structural changes as energy systems evolve, technologies compete across different sectors, and market demand responds to price signals. Shipping illustrates this dynamic clearly. Currently, coal, oil, and gas comprise roughly 40 percent of maritime freight tonnage, with raw iron ore representing an additional 15 percent. As energy systems electrify, steel production evolves, and battery technology enables electrification of shorter maritime routes, the eventual liquid fuel requirements for shipping decline significantly. Projections vary widely, ranging from 70 million tonnes to several hundred million tonnes of annual fuel demand by 2100. This analytical gap carries substantial consequences for infrastructure planning and resource allocation.
Hydrogen exemplifies how foundational assumptions shape investment decisions. Much hydrogen-economy planning assumed green hydrogen would become economical for transportation, heating, electricity storage, and industrial applications. However, production and delivery economics suggest a more limited addressable market if hydrogen prices remain elevated. Institutional commitments around the larger market expectation persist even as underlying assumptions shift, creating organizational inertia.
Other sectors present comparable challenges. Aviation demand contains discretionary components responsive to pricing, though political factors determine whether governments will implement policies making sustainable aviation fuel more costly. Carbon removal requirements grow proportionally with overstated fossil-fuel demand forecasts, potentially justifying technologies with uncertain economics. Data-center electricity consumption depends on unexamined assumptions about computing efficiency improvements across software, chips, and system architecture.
Effective transition analysis requires making assumptions explicit and visible for scrutiny. Starting with the services society requires, rather than current market volumes, allows for more accurate estimation of necessary fuel, infrastructure, and capital. The transition already possesses mature technologies capable of delivering these services; improved capital allocation depends on forecasts examining how problems change alongside proposed solutions.
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