Recent data reveals a significant shift in global energy dynamics, illustrating how solar and wind power are effectively cushioning the world from the severe repercussions of the ongoing conflict between the United States and Iran. Contrary to the prevailing narrative of a “coal comeback” following the blockade of the Strait of Hormuz, analyses indicate that renewable energy sources are playing a crucial role in maintaining energy stability.
Solar and Wind Power Outperform Coal
In March 2026, global fossil fuel power generation experienced a notable decline of 1 per cent year-on-year, according to an analysis by the Centre for Research on Energy and Clean Air. This downturn was primarily driven by a reduction in gas-fired power generation, which fell by 4 per cent, as the impact of the Hormuz blockade began to be felt. Meanwhile, solar energy output surged by an impressive 15 per cent, and wind energy generation increased by 7.6 per cent. Notably, there were no coal units that returned to service or any delays in retirement across any nation during this period.
Complementary data from the energy consultancy Bombay Strategy further reinforces this trend. Their analysis, utilising Kpler shipping data, indicated that global coal imports dropped to their lowest level in five years, plummeting approximately 7.6 per cent year-on-year to 102.8 million tonnes in March. This stark decline counters the anticipated resurgence of coal following measures implemented by countries like South Korea, Japan, and Thailand, which aimed to extend the operational lifespan of coal plants in response to gas shortages.
The Role of Global Energy Policies
Despite the challenges posed by the energy crisis, several nations have successfully transitioned to cleaner energy sources. Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, noted that countries including the UK, India, South Africa, Germany, the Netherlands, and Turkey have effectively met their growing power demands through renewable energy, simultaneously reducing reliance on both coal and gas.
In stark contrast to historical patterns, where oil crises typically drove a rush towards coal as a more affordable alternative, the current data suggests a distinct shift. The global response to the energy crisis underscores the increasing reliance on renewables, with power generation data revealing that only Japan and South Korea exhibited any significant rise in coal generation—attributable not to the Hormuz crisis but rather to a temporary reduction in nuclear energy output.
A Structural Shift in Energy Dynamics
The implications of this transition are profound. The energy landscape has changed considerably since the last major crisis, primarily due to the accelerated deployment of renewable energy technologies. Between 2022 and 2025, over 2,000 gigawatts of renewable capacity were added globally. In 2025 alone, the solar and wind capacity introduced is projected to generate around 1,100 terawatt-hours annually, which is nearly double the electricity that would have been produced by all liquefied natural gas (LNG) transiting through Hormuz before the blockade.
Myllyvirta highlighted this critical juncture, asserting that the record expansion of clean power generation has significantly mitigated the impact of the recent fossil fuel crisis. The increase in renewable electricity has offset the declines in gas-fired generation, effectively preventing a spike in coal usage.
Future Implications and Ongoing Developments
While the current data paints a positive picture for renewable energy’s role in the energy crisis, there are still concerns. Notable increases in coal imports were observed in Malaysia and the Philippines, as LNG-reliant nations sought more affordable alternatives. Additionally, China did experience a shift towards coal in coastal regions, albeit with limited capacity for large-scale transitions due to the small percentage of gas in its overall electricity generation.
The situation remains fluid, and energy experts like Hozefa Merchant caution that the March figures provide only a preliminary insight. As the crisis continues, fluctuations in coal demand may still occur.
Moreover, the prospects for new fossil fuel investments appear bleak. Myllyvirta pointed out that the strait will eventually reopen, but until then, the ongoing acceleration of clean energy and electrification is likely to diminish fossil fuel demand, leading to an oversupplied market. This structural oversupply creates a challenging environment for new fossil fuel projects that typically require years to become operational.
Why it Matters
The ongoing energy crisis serves as a pivotal moment for global energy policy and investment. As nations grapple with the ramifications of geopolitical tensions, the resilience demonstrated by renewable energy sources highlights the urgent need for a sustained transition towards clean energy. Embracing this opportunity to bolster renewable infrastructure not only alleviates immediate energy shortages but also positions countries to mitigate the impacts of future crises, ultimately paving the way for a more sustainable and secure energy future.
