Recent analyses reveal that the escalating energy crisis, sparked by the conflict involving Iran, is being significantly cushioned by the booming solar and wind sectors. Data from the Centre for Research on Energy and Clean Air indicates that the anticipated resurgence of coal due to the blockade of the Strait of Hormuz has not materialised. Instead, the world has witnessed an impressive growth in renewable energy, providing a buffer against the disruptions caused by geopolitical tensions.
Solar and Wind Power on the Rise
In March 2026, global fossil fuel power generation experienced a decline of 1 percent compared to the previous year, as illustrated by the latest findings. The downturn in gas-fired electricity, triggered by the blockade, was counterbalanced by unprecedented growth in solar and wind energy, which surged by 15 percent and 7.6 percent, respectively. Notably, coal generation did not see a revival; no coal plants were reactivated or had their retirement postponed in any country during this period.
A separate investigation by energy consultancy Bombay Strategy, drawing on Kpler shipping data, highlighted that global coal imports plummeted to their lowest level in five years, dropping approximately 7.6 percent year-on-year to 102.8 million tonnes. This stark decrease contradicts the narrative of a “coal comeback,” which gained traction after several Asian nations announced plans to extend the lifespan of their coal plants in response to gas shortages from the Middle East.
The Misleading Narrative of Coal’s Resurgence
While nations like India, South Korea, and Japan appeared to revert to coal during this energy crunch, the underlying data tells a more complex story. Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, remarked that these countries were operating coal plants at near-maximum capacity already, leaving little room for significant increases. The measures taken by Japan and South Korea, he noted, would only marginally elevate coal generation by 1-2 percent, and this was primarily due to underperformance in their nuclear fleets rather than a direct response to the crisis.
Conversely, several other nations—including the UK, India, and Germany—managed to meet rising energy demands through clean energy sources, effectively reducing reliance on coal and gas. The world seems to be breaking away from the traditional pattern of turning to coal during energy crises, a trend that has defined previous oil crises.
A New Era for Energy Transition
The aftermath of the 2022 Russian invasion of Ukraine saw a surge in coal shipments; however, the current situation reflects a marked difference. Following the Hormuz blockade, coal shipments dipped significantly, with a 2.5 percent decline in the first fortnight and only a modest recovery thereafter. Hozefa Merchant, global energy lead at Bombay Strategy, highlighted that this time, the global energy landscape is bolstered by a significantly expanded renewable energy infrastructure. With over 2,000 gigawatts of renewable capacity added globally between 2022 and 2025, the ability to offset declines in fossil fuel generation is more pronounced than ever.
Myllyvirta noted that the record expansion of solar and wind capacity has played a critical role in absorbing shocks from fossil fuel outages. The clean energy generated in 2025 alone is expected to produce approximately 1,100 terawatt hours annually—enough to replace the electricity that would have been generated by all liquefied natural gas (LNG) passing through the Hormuz Strait before the blockade.
Future Implications and Energy Strategy
Despite the positive indicators, the crisis has not left the energy sector without challenges. In China, there has been a notable shift towards coal in coastal regions, albeit limited by its relatively small share in the overall energy mix. Countries like Malaysia and the Philippines have also seen increases in coal imports as they seek more affordable energy solutions amidst rising costs.
As the situation develops, Merchant cautioned that the data from March is merely a preliminary glimpse into an ongoing crisis. The patterns observed may shift, but thus far, the anticipated surge in coal demand has not yet materialised. However, Myllyvirta pointed out that the long-term outlook for fossil fuel investments appears bleak. The current oversupply in the market creates an unfavourable environment for new fossil fuel projects, which require years to come online.
Why it Matters
The resilience demonstrated by renewable energy sources amidst geopolitical turmoil underscores a pivotal shift in the global energy landscape. This moment serves as a critical reminder of the importance of accelerating the transition to clean energy to mitigate future crises. As nations grapple with the complexities of energy security and climate change, the advancements in solar and wind technologies not only offer a pathway to sustainability but also enhance resilience against global disruptions. The ongoing energy transition is not merely an environmental imperative; it is a crucial strategy to safeguard against the volatility of fossil fuel markets in an increasingly unpredictable world.
