Electrostates: Why the U.S. Risks Losing the Energy War of the 21st Century
Electrostates will define the next global order and America’s political gridlock may cost it the lead
From Petrostates to Electrostates: The Energy Power Shift
For the past century, energy dominance meant oil and gas. Petrostates like Saudi Arabia, Russia, and the U.S. shaped geopolitics and industrial growth through hydrocarbons. But the global energy system is shifting. Oil's centrality is fading as clean electricity becomes the engine of growth, security, and influence.
In the past decade, costs have fallen for solar by 90%, onshore wind by 70%, and batteries by more than 90%. EVs now make up over 18% of global car sales. Last year, 93% of new energy capacity added to the grid was wind, solar, and storage.
In the United States, “red” states like Mississippi, Louisiana, and Kentucky saw some of the fastest growth with clean capacity increasing by more than 200% year-over-year. Meanwhile, conflicts like Russia’s invasion of Ukraine have underscored the fragility of fossil reliance.
As the world electrifies, power will belong to those who control clean electrons.
What Is an Electrostate?
An electrostate is a country that secures geopolitical and economic advantage through clean electricity: generating it, storing it, transmitting it, and exporting it.
But not all electricity brings equal power. Fossil fuels are geographically constrained, price-volatile, and increasingly penalized. In contrast, clean electricity – like solar, wind, hydro, geothermal – is decentralized, deflationary, and scalable. The more you build, the cheaper it gets.
Countries that harness renewable energy can attract AI data centers, EV factories, green hydrogen production, and advanced manufacturing. Electrostates are those that turn clean energy abundance into long-term leverage; they are countries that have built a surplus of clean power, backed by smart grids and export infrastructure, and aligned their industrial policies to capitalize on it.
Why Being an Electrostate Matters
Being an electrostate means holding the keys to energy security, industrial strength, and geopolitical influence. These were once the hallmarks of petrostates — think Saudi Arabia, Russia, and the U.S. But their leverage came with volatility and environmental costs. Electrostates are emerging as the clean energy equivalent, but with a more sustainable and distributed foundation.
Clean electricity is becoming the foundational input for economic growth: powering industries, transportation, heating, and digital infrastructure. As sectors electrify, countries with surplus clean power will define the pace and shape of industrialization.
Unlike fossil fuel wealth, electrostate potential is widespread. The difference will be who builds the fastest, integrates the smartest, and exports the most reliably. This is why electrostate status isn’t just about energy policy — it is increasingly about securing a dominant role in the global economy.
The 20th century was defined by oil-rich nations; the 21st will be defined by electrostates.
Who’s Winning the Electrostate Race?
While the U.S. debates the future of clean energy incentives, others are surging ahead.
China is the undisputed frontrunner. It controls over 80% of global solar manufacturing capacity. In 2024 alone, it installed 278 GW of solar, bringing its total to 887 GW, which is a 46% increase from the previous year. This is more than double the U.S.'s total installed utility-scale solar capacity (121 GW as of 2024). China also leads in battery and EV production. According to China Energy News, just by 2020, the combined length of the ultra-high voltage transmission lines operating in China had reached 48,000km (30,000 miles), more than enough to wrap around the Earth by the equator.
The European Union is leaning hard into grid integration and industrial policy. The EU installed 76 GW of new renewable capacity in 2024, with wind and solar representing 87% of all new additions. Offshore wind is booming in the North Sea. Its Net-Zero Industry Act aims for at least 40% of clean tech deployment to be sourced from within the bloc by 2030.
Nordic countries use hydropower and wind to run deeply integrated grids, attracting green steel, data centers, and AI infrastructure. The Nord Pool market trades across 15 countries, supporting one of the most integrated electricity markets globally. In Sweden, 97% of energy production is already fossil-free — helping attract energy-intensive industries like data centers and green steel.
MENA nations, India, and Brazil are rising contenders in becoming leading electrostates. Saudi Arabia is constructing the world’s largest green hydrogen plant at NEOM, integrating solar and wind energy to produce up to 600 tons of green hydrogen a day by the end of 2026. India aims to achieve 500 GW of non-fossil fuel power capacity by 2030, with significant investments in renewable energy infrastructure. Brazil already gets 78% of its electricity from renewables (mostly hydro with rapid growth in wind and solar).
The U.S. Is Falling Behind
The U.S. has incredible technical capacity and renewable resources, yet it’s stalled by political dysfunction and fragmented governance. The Inflation Reduction Act (IRA) could deliver over $2.7 trillion in net benefits from 2025 to 2035, accounting for $656 billion in costs, according to a report by the American Clean Power Association and ICF, but many provisions are under threat of repeal.
Meanwhile, more than 2.6 TW of energy projects are stuck in interconnection queues — over twice the current grid capacity. Transmission lines can take over a decade to permit and build. While China executes national-scale transmission at speed, the U.S. remains hamstrung by fragmentation.
One of the most defining and frustrating characteristics of the U.S. energy transition is that it isn’t national. It’s state-led, state-limited, and state-fragmented. There is no unified approach to becoming an electrostate; instead, there's a chaotic energy mosaic with some states surging ahead and others actively obstructing progress.
Texas leads in installed wind capacity (over 40 GW) and is rapidly expanding solar, driven by market forces, not climate policy. But its grid is isolated and vulnerable. California is pushing long-duration storage and offshore wind but slowed by permitting bottlenecks. In the Northeast, offshore wind ambitions are under pressure from rising costs and reliability constraints, forcing some states to turn back to gas. Clean energy ambition remains high, but so do political and economic headwinds.
These differences reflect diverging political and economic visions. As Ezra Klein and Derek Thompson argue in the "abundance agenda," the problem isn't a lack of ideas or money. It's the lack of execution. It is the heart of what Ezra Klein calls the challenge of “supply-side progressivism” — the idea that ambition without a willingness or ability to build is empty.
The U.S., in effect, is trying to become an electrostate with 50 different blueprints — some charging ahead, others dragging their feet. Until it resolves this internal incoherence and treats energy infrastructure as a national priority, not a partisan symbol, it cannot properly compete on the global stage.
What the U.S. Must Do to Compete
The U.S. currently lacks the coordination and conviction to put together the components necessary to become an electrostate. What’s needed now isn’t just innovation or funding, but a governing model that can actually build across regions, administrations, and election cycles.
1. Make Clean Energy Nonpartisan
Clean energy must be framed as a national economic and industrial strategy, not a partisan environmental policy. It is critical to emphasize jobs, manufacturing, resilience, and global influence to make the case that winning this electrostate race is about abundance and security, not scarcity and sacrifice.
This shift is already underway. Organizations like ClearPath and Citizens for Responsible Energy Solutions are building conservative support. Figures like Debbie Dooley promote rooftop solar as energy independence. And the Climate Leadership Council advocates market-based climate policies that focus on growth, not regulation.
2. Implement and Build the National Grid Strategy
No amount of incentives matter if projects don’t get built. The U.S. must treat infrastructure as foundational, and reform the systems that currently block or delay critical energy investments. Permitting reform is progressing through DOE's Coordinated Interagency Transmission Authorizations and Permits (CITAP) Program, which promises two-year timelines for reviews. DOE's National Transmission Planning Study outlines priority corridors and buildout scenarios. FERC Order No. 1920 now requires grid operators to create long-term plans for regional transmission. Together, these actions form the scaffolding of a national grid strategy — but now require sustained funding and execution.
3. Rebuild Domestic Clean Tech Supply Chains
The U.S. cannot be an electrostate if it relies on imported panels, batteries, and critical minerals. Domestic manufacturing must be treated as a pillar of energy independence.
Section 45X and 48C tax credits from the IRA incentivize domestic manufacturing of solar wafers, battery cells, and clean energy components. MP Materials has revived rare earth refining at Mountain Pass, while ReElement Technologies is building domestic lithium and REE processing in Indiana. The U.S. has formalized strategic supply agreements with allies like Australia and Canada (“friendshoring”), aiming to build mineral resilience without relying on China.
These initiatives demonstrate a concerted effort to strengthen domestic clean tech supply chains, ensuring the U.S. can meet its energy transition goals with greater resilience and independence.
4. Invest in Hydrogen and Advanced Storage
Clean hydrogen, long-duration storage, and next-gen grid technologies will be essential for decarbonizing hard-to-abate sectors and ensuring energy security. The $7 billion hydrogen hubs are part of the DOE’s Hydrogen Shot to reduce clean hydrogen costs to $1/kg by 2030. However, DOE’s May 2025 decision to withdraw $3.7 billion from 24 awarded clean tech demonstration projects has raised concerns.
If hydrogen and storage are to be future pillars, the federal government must follow through with predictable support and bridge financing, especially during cost curve declines. Strategic infrastructure needs strategic patience. If the U.S. wants to lead in future energy systems, it must treat them as essential and not experimental.
5. Align Federal and State Action
Electrostate status cannot be won by Texas or California alone. It requires federal-state alignment on planning, funding, and messaging. Coordination is improving: DOE’s $10.5 billion GRIP program funds multistate grid modernization. The Interconnection Innovation Exchange (i2X) initiative and the federal Permitting Action Plan offer tools for states to streamline siting. And the White House Federal-State Modern Grid Deployment Initiative under the Biden administration brought together over 20 governors to align on infrastructure and interconnection planning, although the future of such coordination is uncertain.
These efforts represent a notable approach: treating the grid not as a fragmented local concern, but as a shared national asset. Sustained alignment in policy, process, and purpose will be essential for the U.S. to build the infrastructure needed to compete as an electrostate.
6. Define the Narrative and Stick to It
The U.S. needs to tell a story of itself as a country that can build big things again and clean energy is the best place to start. Tech giants like Microsoft, Google, and Meta are lobbying to preserve tax credits as they scale power-hungry AI data centers. Texas is outpacing California in solar with expectations to add 12 GW to the grid this year compared to California’s 2.9 GW. Combined, the two states account for almost half of all of the country’s new solar. And major investors like Hull Street Energy Partners and ECP are doubling down on renewables despite policy threats. The story is clear: clean energy is not a fringe cause — it is the foundation for economic leadership.
These initiatives collectively craft a compelling story: A nation that leads the global economy through innovation and abundance, wins new industries and brings supply chains home, and keeps its promises to workers, investors, and to the next generation.
The Stakes: Electrostates Will Define the Future
At home in the U.S., clean electricity is the only path to scaling new industries like electric vehicles, semiconductors, green hydrogen, and AI compute. Industrial competitiveness increasingly hinges on energy prices and carbon intensity, and companies are already making site selection decisions based on access to reliable, clean power.
Internationally, leadership in energy is becoming a prerequisite for influence. Countries that export clean energy, advanced grid systems, and climate-aligned technologies will shape global standards and alliances. Those that lag may face economic penalties, supply chain exclusion, and geopolitical irrelevance.
The U.S. can either lead this transformation or be forced to adapt to a world powered by others.