Because every four years, they play at “dismantle and reassemble†with our vital system. And there are always screws left over.

By Germán Toro Ghio, Germán & Co., August 25, 2025.

Electricity is the bloodstream of modern civilization. Without it, no factory runs, no hospital operates, no digital economy breathes. It is the system that sustains all other systems, the invisible infrastructure upon which contemporary life is precariously balanced. And yet, despite its apparent centrality, the global electricity sector has been reduced to a children’s toyâ€"pulled apart and reassembled at the whim of each political cycle, as if it were a set of Lego blocks.

Every four years, the new minister arrives with the zeal of a child discovering a new game: “take it all apart, put it back together, see what happens.†Sometimes there are subsidies for renewables, sometimes for coal; sometimes nuclear is the saviour, sometimes it is the enemy; sometimes hydroelectricity is the green dream, sometimes it is condemned as an ecological crime. And always, when the pieces are put back together, a few screws are missing.

The absurdity is not technological but political. The real enemy of the electricity sector is not coal or gas, not wind or solar, not nuclear or hydro. All have a place. The real enemy is the smoke of politics, the constant volatility of leaders who legislate as if infrastructure were electoral propaganda and not the foundation of society. Political lunacy converts the power sector into a pendulum: one day hailed as the key to climate salvation, the next treated as a fiscal burden to be sacrificed.

The cost of these swings is immense. Cancelled projects, stranded investments, eroded trust, citizens left with higher bills, pension funds drained, and future generations burdened with debtâ€"both financial and climatic. And behind this grotesque spectacle, one group always profits: the lawyers, who transform political instability into a perpetual arbitration machine.

This essay proposes neither a new technology nor a partisan doctrine. It asks a more basic, urgent question: how do we shield the electricity sector from the childish cycles of politics? How do we ensure that what should be the backbone of modern society is no longer dismantled like a toy every time power changes hands?

The electricity sector has been framed as a battlefield between two irreconcilable armies. On one side, the defenders of fossil fuels, entrenched in their coal mines, gas pipelines, and oil terminals, are invoking jobs and sovereignty as banners. On the other, the heralds of renewables, armed with wind turbines and solar panels, proclaiming ecological virtue as though it were enough to power an economy. Each side accuses the other of blindness, corruption, and irresponsibility.

And yet, both sides are wrong in the same way. They behave as if electricity were a zero-sum game: for one to win, the other must die. In reality, electricity demand is not shrinkingâ€"it is exploding. According to the International Energy Agency (IEA), global electricity consumption is set to grow by more than 25% between now and 2030, driven by electrification of transport, digitalization, and new industries like green hydrogen.

This growth means there is room for all. Solar and wind must expand rapidly. Hydro and nuclear remain essential backbones in many regions. Gas and even some coal will linger for stability and backup, unless alternatives become fully scalable. The problem is not technological diversity, but political schizophrenia: the inability to provide long-term certainty so that all these pieces can be integrated coherently.

Germany offers the most illustrative case. Under pressure from the Green movement, the government closed its last nuclear plants in 2022, presenting the move as an ecological triumph. But the timing collided with the Russian invasion of Ukraine and the cutoff of gas supplies. Result: Germany burned more coal in 2023 than at any time in the last decade, with emissions rising precisely when they were supposed to fall. A victory for neither ecology nor economyâ€"just a symptom of policy lurching from one extreme to another.

Mexico illustrates the opposite swing. After years of successful renewable auctions that attracted billions in investment and produced some of the cheapest solar electricity in the world, President Andrés Manuel López Obrador abruptly canceled the mechanism in 2019. His justification: sovereignty and the defense of the state-owned utility. The effect: dozens of solar and wind projects were frozen, investors fled, and lawsuits proliferated in arbitration courts. Again, not a victory for sovereignty, nor for clean energyâ€"just paralysis and cost.

In both cases, the technologies themselves were not the problem. Nuclear, solar, wind, coal, gasâ€"all have advantages and limitations. The problem was abrupt political U-turns, producing instability where there should have been planning.

The sociologist Ulrich Beck once described modern risk society as two trains hurtling toward each other on the same track. The metaphor fits perfectly to today’s electricity sector.

One train is fossil-based: coal plants kept alive by subsidies, gas pipelines defended as “strategic,†oil-backed pension funds lobbying for delay. Its momentum comes from history and rent. The other train is renewable-based: solar farms spreading across deserts, offshore wind towers rising from the sea, and electrification treated as a moral crusade. Its momentum comes from urgency and hope.

Between these trains lie the “in-between technologiesâ€â€"hydroelectric dams, nuclear stations, and transitional gas turbinesâ€"that could provide stability if managed with foresight. Instead, they are turned into pawns in ideological wars: one year praised as solutions, the next condemned as problems.

The crash between these trains does not produce clarityâ€"it produces paralysis. Germany burns coal after closing nuclear. Brazil invests billions in Belo Monte, a mega-dam on the Xingu River, only to discover it cannot generate as promised due to droughts aggravated by climate change. South Africa, clinging to coal as its backbone, now suffers daily “load-shedding†blackouts while its renewable rollout stalls in bureaucratic delays.

The irony is that no war is necessary. The economics already favor renewables. In most of the world, solar and wind power produce electricity at lower costs than new coal or gas. Even storage prices are plummeting. But politics insists on staging the warâ€"because it generates campaigns, symbols, subsidies, and lawsuits.

Meanwhile, the genuine opportunity slips away. Africa could electrify villages with decentralized solar and micro-hydro at a fraction of the cost of mega-projects. Latin America could become the world’s clean-energy exporter with its vast hydro, solar, and wind potential. Europe could build a continental supergrid to stabilize its system and cut dependence on imports. But instead of seizing this future, leaders keep pulling the emergency brake, forcing trains into collision.

If citizens, pensioners, and even investors sometimes lose, there is one class of actors who never do: the lawyers. For them, the instability of the electricity sector is not a crisis but a cornucopia. Every regulatory reversal, every subsidy withdrawn or granted, every project canceled or revived, is raw material for arbitration.

Since the 1990s, the International Centre for Settlement of Investment Disputes (ICSID), under the World Bank, has registered more than 800 cases involving energy. The Energy Charter Secretariat admits that disputes in this sector alone amount to tens of billions of dollars in claims. It is no exaggeration to say that the electricity sector has become the most litigious industry on the planet.

The logic is simple. When a government changes the rules of the game, investors cry “expropriation†and lawyers draft claims. Litigation-finance firms advance the costs in exchange for a share of the award. Entire law firms specialize in turning political volatility into billion-dollar compensation packages. Energy law, once a niche, has become a global goldmine.

This generates grotesque priorities. In ministries of energy across the world, lawyers are now more influential than engineers. Technical debatesâ€"should we expand transmission, modernize hydro, integrate storage?â€"are relegated to the background. What dominates is legal paranoia: If we change this regulation, will we be sued? If we cancel that project, how much will it cost in arbitration?

A case in point: Spain’s solar boom. In the early 2000s, Madrid offered generous subsidies to photovoltaic projects. Thousands of investors, Spanish and foreign, rushed to build. But in 2010, faced with ballooning costs, the government slashed the incentives retroactively. The result: more than 50 lawsuits at ICSID and other arbitration forums, with claims exceeding â'¬7 billion. Instead of a stable transition, Spain created a feeding frenzy for lawyers and a graveyard for investor trust.

The cruel irony is that lawyers thrive not on progress, but on its opposite: paralysis. A stable, well-planned transition would put them out of business. What fattens their accounts is precisely the instability that strangles the sector. The longer governments wobble between extremesâ€"subsidizing today, slashing tomorrowâ€"the richer the legal industry becomes.

Thus, in this “useless war†of energy, there is at least one silent winner. Not the workers, not the consumers, not even the investors in the long runâ€"but the legal armies who turn political lunacy into perpetual revenue.

The electricity sector should be guided by long-term planning: designing networks for 30â€"40 years, establishing stable targets, channelling capital into projects that pay off over generations. Instead, it has become trapped in a swamp of contracts and treaties that prioritize short-term legal certainty over long-term public interest.

Every electricity project is wrapped in complex contractsâ€"concessions, power-purchase agreements (PPAs), stabilization clauses. In theory, these instruments reduce risk. In practice, they can paralyze policy. Any attempt to revise tariffs, rebalance subsidies, or update environmental standards risks triggering lawsuits. Governments are caught between two bad options: perpetuate outdated rules, or pay compensation for changing them.

Ecuador’s experience with Perenco is illustrative. In the 2000s, Quito sought to increase the state’s share of oil revenues by altering contracts. The company sued, and after years of proceedings, Ecuador was ordered to pay $412 million. The lesson for future ministers was chilling: reform comes at a price higher than the status quo.

Kazakhstan learned the same with the Stati case, where investors in gas fields sued for $500 million over regulatory changes. Once again, political will collided with contractual rigidity, and the lawyers triumphed.

Europe provides the most scandalous example: the Energy Charter Treaty (ECT), signed in 1994. Conceived to protect investments after the fall of the Soviet Union, the treaty has mutated into a shield for fossil fuels. Whenever a European government tries to accelerate coal closures, withdraw subsidies, or introduce carbon taxes, energy companies invoke the ECT to demand compensation.

Italy faced claims after cutting solar incentives. Swedish firm Vattenfall sued Germany for imposing stricter environmental standards on coal and for phasing out nuclear. The Netherlands has been targeted for its decision to close coal plants by 2030. In total, fossil companies have claimed over â'¬20 billion from European states under the ECT.

The absurdity is staggering: the European Union proclaims climate neutrality by 2050, while a treaty signed in the 1990s legally obliges it to pay fossil firms for decarbonizing. International law turned the past into a guaranteed annuityâ€"against the future itself.

This legal web fosters governance by fear. Before passing any reform, energy ministries consult lawyers more than engineers. Will this clause trigger arbitration? Will this tariff adjustment be interpreted as expropriation? Instead of policy leading contracts, contracts lead policy.

The outcome is paralysis. Renewable projects stall not because of a lack of technology but because of the fear of litigation. Fossil subsidies persist not because they are efficient but because removing them is too legally costly. Whole countries, like Spain or South Africa, are trapped in cycles of legal dispute that drain public coffers and freeze progress.

In short, contracts and treaties meant to provide stability have become cages. They do not protect the electricity sector from political lunacyâ€"they enshrine it.

The volatility of the power sector would be laughable if it were not so costly. Behind every cancelled project, every arbitration, and every subsidy reversal, there are losersâ€"and they are always the same.

Ordinary citizens pay the bill twice: once in their electricity tariffs, and again through their taxes. When a government cancels a project under pressure, the stranded costs are passed on to consumers. When it loses an arbitration case, compensation is paid from the public purse.

Spain is again a textbook case. After cutting solar subsidies in 2010, the country not only saw electricity bills rise for households, but also ended up paying billions in awards to investors. Citizens paid for both the subsidies and their cancellation.

South Africans, too, know this story well. “Load-shedding†has become a daily reality, with rolling blackouts imposed by Eskom, the state utility. Years of underinvestment, political interference, and corruption have left the grid fragile. Ordinary people suffer not just outages but rising tariffs imposed to cover Eskom’s financial hole. The lights go out, but the bills keep climbing.

If citizens are the immediate losers, pensioners are the slow-motion victims. Pension funds, designed to protect the savings of millions, have invested billions across the energy divide. On one side, they remain entangled with fossil giantsâ€"owning shares in oil majors, financing outdated coal and gas plants, and betting on assets that could be stranded in a decarbonising world. On the other hand, they have become major financiers of green power: solar parks, offshore wind farms, green bonds, and transmission upgrades.

The paradox is brutal. What should finance the future is also prolonging the past. And what should guarantee a dignified old age is exposed to abrupt political mood swings. If governments phase out coal too fast without planning, fossil investments collapse. If they withdraw renewable subsidies overnight, green investments crash. Either way, the pensions of workers are collateral damage in a game they never chose to play.

The issue is not the coexistence of different technologiesâ€"there is room for all. The real danger is the abrupt U-turns of politics, which destabilize markets, destroy long-term value, and convert pension funds into unwilling gamblers.

Beyond citizens and pensioners lies the most vulnerable group of all: those who do not yet vote or pay taxes. Every dollar spent on arbitration awards, every euro buried in fossil subsidies, and every billion sunk into ill-conceived mega-projects are resources that are not invested in schools, hospitals, or clean infrastructure.

Brazil’s Belo Monte dam is a tragic example. Built on the Xingu River with promises of cheap, abundant power, it displaced thousands of Indigenous families and flooded vast ecosystems. But because of drought and climate variability, its actual generation is far below projections. Billions in public and private funds were sunk into a monument of hubris. Future Brazilians will pay its debt long after its turbines have gone silent.

We are mortgaging tomorrow to save face today. And we do so knowingly, hiding behind euphemisms like “legal certainty†or “macroeconomic stability.†In truth, it is cowardice: shifting the cost of political incompetence onto those who cannot yet defend themselves.

The current dynamics of the power sector prove the transition is not only technological or economicâ€"it is moral. Opportunistic politicians collect votes, lawyers collect fees, and investors collect protections. The costs are dumped onto citizens with inflated bills, pensioners with fragile savings, and young people who will inherit a hotter planet and a weaker grid.

Society loses not with the drama of war or catastrophe, but with the slow drip of bureaucracy. A steady erosion of trust, savings, and stabilityâ€"silent, invisible, but devastating.

After cataloguing the wreckageâ€"legal traps, political U-turns, stranded projects, generational debtsâ€"the question becomes urgent: how can the electricity sector be shielded from the lunacy of politics? How can it stop being a toy of volatility and become the backbone of a long-term transformation?

The first shield is legal durability. Laws that bind governments across electoral cycles, obliging them to stick to a trajectory regardless of ideology. The UK’s Climate Change Act (2008) remains the model: binding carbon budgets set in five-year increments, overseen by an independent Climate Change Committee. Every government, left or right, must obey.

Contrast that with the United States, where climate policy has become a partisan yo-yo: Obama signed the Paris Agreement in 2015, Trump withdrew in 2017, Biden rejoined in 2021. Each reversal shakes global trust and undermines investment. A shielded sector cannot depend on electoral rouletteâ€"it requires laws designed to outlast the politicians who pass them.

Laws set the direction, but regulators enforce the rules. If regulators are puppets of the executive, stability vanishes. Independent agencies, with multi-year mandates and budget autonomy, provide continuity. The UK’s Ofgem or France’s CRE are examples of credible regulators. In contrast, Mexico’s regulator (CRE) was gutted by political interference under López Obrador, scaring off billions in investment.

Stability also requires financial tools. Competitive auctions have driven down renewable costs in Brazil, Chile, and South Africa. Standardized Power Purchase Agreements (PPAs) reduce discretion and limit litigation. Green bondsâ€"over $500 billion issued in 2023â€"offer pension funds a safe channel to finance clean infrastructure.

The key is predictability. Whether thermal, hydro, nuclear, or renewable, projects need stable frameworks. The shield is not about favouring one technology over another, but about providing clarity for all.

No infrastructure can be shielded without social acceptance. Denmark pioneered community ownership: citizens must be offered shares in local wind projects. In Germany, nearly half of renewable capacity was once community-owned before policy reversals. These models create allies, not opponents.

The same logic must apply to transitional plants. Thermal stations can be phased out with worker retraining programs. Hydroelectric projects must include local participation and safeguards, not be imposed as monuments of hubris. Shielding means ensuring that communities see themselves as beneficiaries.

Germán Toro Ghio is one of the rare voices capable of moving seamlessly across the borders of energy, politics, and culture. With his distinctive style and profound knowledge, he has built an audience of over 250,000 readers worldwide. In just the past three days, his work has attracted more than 30,000 reads on LinkedIn â€" a record-breaking surge â€" confirming his position as a key figure in the global debate on energy and power.

As an Expert in The Energy Collective and a contributor to Energy Central’s Power Perspectivesâ"¢ series, Toro Ghio has set himself apart by making the complex interactions of markets, geopolitics, and infrastructure understandable.

The Toro Ghio’s journey extends far beyond kilowatts and contracts. Before entering the energy sector, he explored the worlds of literature, diplomacy, and cultural policy. He served as Executive Secretary of the Forum of Culture Ministers of Latin America and the Caribbean; he co-authored Colombia en el Planeta with William Ospina and Beatriz Caballero of the La Candelaria Theatre Group for the UNDP; he collaborated with Nicaraguan poet-priest Ernesto Cardenal; and, with the encouragement of Octavio Paz, he revived Carlos Martínez Rivas’s La insurrección solitariaâ€"restoring Central American poetry to its rightful place in twentieth-century literature.

As a writer, he has published works ranging from Nicaragua Year 5â€"the documentary testimony in images, catalogued by Lund Universityâ€"to The Non Man’s Land and Other Tales. He has directed and overseen literary editions such as Joven arte dominicano, promoted by Casa de Teatro in Santo Domingo and distributed to universities across the world.

Chilean filmmaker and political scientist Juan Forchâ€"an architect of Chile’s historic 1990 “NO†campaign, later dramatized in Pablo Larraín’s Oscar-nominated Noâ€"has written of Toro Ghio’s narratives that they “enrich our understanding of history beyond traditional battlefields and royal courts,†praising journeys that move effortlessly “from the discomfort of a Moscow hotel to the exhilaration of the Nicaraguan jungle.â€

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