Cheap solar power is sending electrical grids into a death spiral
www.economist.com
Date posted: May 14, 2025 at 12:00am
Pakistan and South Africa provide a warning for other countries | Finance & economics
Expanded Summary
The recent developments in Pakistan and South Africa serve as cautionary tales regarding the impact of cheap solar power on electrical grids. As these nations have embraced renewable energy sources, particularly solar, they have inadvertently jeopardized the stability of their electrical infrastructures. With the rapid decline in prices for solar technology, traditional energy providers face dwindling demand, leading to reduced revenues and, in turn, inadequate investments in grid maintenance and development. This cycle creates a "death spiral" effect, where the diminishing viability of conventional energy sources threatens the overall reliability of the grid, posing serious challenges for energy policy and sustainability in these regions. Other countries must take heed of these unfolding scenarios to avoid similar pitfalls as they transition to greener energy solutions.
What you’ll learn
Understand how cheap solar power can destabilize traditional electrical grids.
Explore the experiences of Pakistan and South Africa as case studies for energy policy challenges.
Learn about the potential consequences of failing to adapt energy strategies in the face of renewable advancements.
Why this matters
As the world increasingly shifts towards renewable energy sources, understanding the implications of this transition on existing electrical grids is crucial. The experiences of Pakistan and South Africa highlight the urgent need for careful planning and policy adaptation to ensure energy stability. Failure to address these challenges could lead to widespread blackouts and energy insecurity, impacting economies and daily life globally.
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