From Energy Crisis to Energy Security – The Strategic Choice of Renewables

By Francesco La Camera, Director-General, International Renewable Energy Agency (IRENA)

The current energy crisis has once again exposed the structural vulnerability that defines our fossil-based energy systems. Events in the Strait of Hormuz illustrate how disruptions to oil and gas supply routes can rapidly translate into higher global energy prices, requiring massive public military expenses to secure fossil energy supply chains. The effects can be felt across whole economies, extending beyond energy markets and wider supply chains, influencing inflation and economic activity simultaneously. As so often is the case, the most vulnerable communities will bear the greatest burden.

From the oil shocks of the 1970s to the COVID-19 pandemic and the war in Ukraine, each major geopolitical crisis has strengthened the case for renewables. Renewables now represent the majority of all new power capacity additions.

In 2025 alone, 692 GW were added, marking the highest annual increase on record, with renewables accounting for almost 86% of all new capacity globally. The Middle East recorded its largest growth rate ever – with almost 30% or a plus of 12.7 GW – led by the UAE and Saudi Arabia.

With 91% of new renewable capacity at global scale delivering power at a lower cost than the cheapest fossil fuel alternative, and well before the current crisis, the direction of travel is clear.

Furthermore, “firm” renewables, which combine wind or solar with battery storage, provide 24/7 power at lower costs than most fossil fuel-fired alternatives. Masdar’s Round-The-Clock project in Abu Dhabi, for example, combines solar with a massive amount of battery capacity and is a global blueprint for the continuous and reliable supply of renewable energy.

Indeed, the competitiveness of tomorrow's economies will be largely determined by their ability to move electrons and molecules at the lowest possible cost. As IRENA's policy brief https://www.irena.org/Publications/2026/Apr/Renewables-from-energy-crisis-to-energy-security sets out, short-term actions in response to the crisis must be anchored in building the future energy systems that run on renewables. Fast movers will gain lasting resilience, productivity, and competitiveness advantages over those who hesitate. Countries that have invested substantially in solar, wind, batteries, and electrification are weathering the present disruption with measurably less economic damage.

In Spain, renewables have reduced the role of natural gas in setting power prices to just 15% of the time, while in Pakistan, the rapid deployment of decentralized solar and battery capacity has cushioned both consumers and the broader energy system from the current shock. Renewables met some 80% of China’s new electric power demand and more than half of new car sales are now electric. And India’s share of renewables in power generation increased to over 20% with electric cooking become a contingency measure for households.

By accelerating the shift toward renewables, countries are reducing their structural exposure to fossil fuel volatility and limiting the economic and social impacts of future disruptions.

However, progress remains concentrated in a small number of countries, and markets alone will not close the remaining gap equitably. Persistent barriers, including financing gaps, grid constraints, and limited institutional capacity continue to hinder deployment across the developing world and in many advanced economies alike.

This is not a failure of renewable technologies. Rather, for most developing countries across Africa, Southeast Asia, and Latin America, the barriers to the energy transition are systemic. Markets are designed around fossil fuels, grids are neither interconnected nor flexible enough to absorb high shares of solar and wind, and current levels of institutional capacity are insufficient to plan, implement, and operate the energy systems of the future.

In today’s turbulent times, when trust in multilateralism is being tested, international cooperation is more important than ever. This requires setting a more strategic direction for multilateral and bilateral financial institutions and a new vision for development, one that places building the infrastructure for the new energy system at its core.

Engagement of the private sector is equally key to advancing progress around the world. It plays a pivotal role in mobilizing international investment in renewable energy by partnering with governments and financiers to deliver large-scale clean energy projects across developing countries, accelerating energy access, economic growth, and decarbonization.

IRENA remains committed to supporting the global community, working closely with its member countries and leveraging knowledge through platforms like the G7, G20, and COPs to ensure that renewable deployment and electrification scale up everywhere.

The current crisis has underscored the case for renewables with stark clarity. The real test now is whether this momentum translates into action, as today’s decisions will shape both the recovery and long-term resilience to future disruptions.