Do Energy Crises Accelerate or Delay the Renewable Energy Transition?
Energy crises are often presented as turning points that can reshape the global energy system. When oil and gas prices rise sharply or supply chains are disrupted, governments are forced to reconsider how they produce and consume energy. Some view these moments as catalysts for accelerating renewable energy, while others argue that they reinforce reliance on fossil fuels. The evidence suggests that both outcomes are possible, depending largely on a country’s institutional capacity, financial resources, and long-term policy vision.
The argument that crises accelerate the energy transition is supported by recent experience. Sharp increases in fossil fuel prices expose the strategic and economic risks associated with dependence on imported energy. Renewable technologies such as solar and wind offer an attractive alternative because they rely on domestic resources and reduce exposure to geopolitical shocks. Following the conflict in Ukraine, many European countries expanded investments in renewable energy, battery storage, and energy efficiency. What had previously been framed primarily as a climate objective increasingly became a matter of national security. The International Energy Agency (IEA) notes in its World Energy Outlook 2024 that geopolitical tensions are strengthening the strategic rationale for clean energy investment.
At the same time, crises can also slow the transition when governments prioritize immediate energy security over long-term structural change. In response to supply disruptions, countries may increase domestic oil and gas production, sign long-term liquefied natural gas contracts, or temporarily return to coal-fired generation. These measures can reduce short-term risks, but they may also divert capital and policy attention away from renewable energy.
A recent 2026 study, titled “Geopolitical Risks and the Global Renewable Energy Transition: Implications for Energy Security and Economic Resilience,” provides important insight into why countries respond differently. Based on data from 94 countries for the period 2002 – 2023, the study finds that geopolitical risk tends to accelerate renewable energy deployment in advanced economies but slows progress in the developing and least-developed countries. Advanced economies are generally better positioned to respond because they have stronger institutions, deeper capital markets, and clearer regulatory frameworks. Developing countries, by contrast, often face fiscal constraints, higher financing costs, and limited technical capacity, making it more difficult to transform external shocks into long-term investments.
For Gulf Cooperation Council (GCC) countries, these findings are particularly relevant. The GCC countries combine substantial financial resources, strong institutions, and a proven ability to implement large-scale strategic initiatives. Although hydrocarbon revenues remain an important pillar of their economies, they have also provided the capital needed to invest in renewable energy, grid modernization, hydrogen, and other emerging industries. This places the region in a strong position to respond to geopolitical uncertainty in a constructive manner. With clear national strategies, active sovereign wealth funds, and growing regional cooperation, the GCC is well positioned to turn periods of market volatility into opportunities to accelerate economic diversification and strengthen long-term energy security.
The broader lesson is that energy crises do not produce a single outcome. They create pressure for change, but the direction of that change depends on governance, access to capital, and institutional readiness. Countries with strong planning capabilities are more likely to convert disruption into an opportunity to build a more resilient energy system. Others may focus on short-term stability and postpone the structural reforms needed for a lasting transition.
Dr Abdulla Isa Alabbasi, Director of Energy and Environmental Studies Program (Derasat Center)
