The war on Iran, with the closure of the Strait of Hormuz and the rise in fossil fuel prices, has caused the second global energy crisis in the last five years, after the 2022 crisis following Russia’s invasion of Ukraine. According to Xavier Barbaro, CEO of the French company Neoen, the current crisis will stimulate investments in “local” energy sources such as wind and solar, which do not depend on external inputs, but will not give a very strong boost to the ecological transition.
After all, the green wave that arose with the war in Ukraine has already faded relatively quickly and has not brought about the structural change that some had hoped for: low-carbon sources have not replaced fossil fuels in electricity generation, and natural gas remains fundamental.
– Also read: The crisis in the Persian Gulf sends US oil exports soaring
MORE COAL IN ASIA…
The closure of the Strait of Hormuz and the difficulty of accessing hydrocarbons produced in the Persian Gulf have proven to be a problem especially for East Asia, more specifically for China, Japan, South Korea, India, and Pakistan. But these countries have not responded to the crisis by installing many more wind and photovoltaic parks, but rather by burning more coal instead of gas. The plants that use these two fuels are similar, in fact: they produce electricity in a stable and continuous manner, allowing the constant balancing of supply and demand; however, they do so by releasing greenhouse gases, and coal emissions are higher than those of gas.
The advantage of coal lies in its low price and especially in the fact that its trade does not pass through the Strait of Hormuz, which is instead crucial for maritime gas transport. According to the consulting firm Rystad Energy, the Asia-Pacific region will consume an additional 150 million tons of coal by 2030; last year it already consumed about 7.2 billion.
Coal is already – by far – the most used source for electricity production in Asia, with an average of 40-50 percent at the regional level. In 2024, 74 percent of India’s electricity was generated with coal, 57 percent in China, 32 percent in Japan, and 30 percent in South Korea.
– Also read: Urea from coal: how China protects itself from the gas and fertilizer crisis
… BUT ALSO MORE SOLAR PANELS
On the other hand – as highlighted by the Financial Times – it is true that in recent months there has been a significant increase in the installation of residential solar systems globally. For example, in the first quarter of the year India added 2.7 gigawatts of solar capacity on building rooftops, more than double compared to the previous period. The United States, on the other hand, installed almost 1.2 GW.
In the first four months of 2026, the Philippines also became the second main destination for Chinese exports of solar devices – Beijing is the clearly dominant country along the photovoltaic supply chain – and approved in a short time the realization of over twenty large-scale solar, wind, and hydroelectric projects.
AND IN EUROPE?
In Europe, despite environmental sustainability commitments and support for renewable generation, the energy crisis linked to the war on Iran has had “less transformative” effects compared to the war in Ukraine, according to Adair Turner. The British entrepreneur and academic told the Financial Times that he is “quite confident” that this crisis “will give at least a slight to moderate boost to the energy transition, particularly in Asia. Whether it will be a significant turning point, I think it is still too early to say.”
ELECTRIFICATION
The Dutch Climate Minister, Stientje van Veldhoven, has urged governments to “create the necessary conditions so that companies can electrify by investing in networks, providing adequate financial incentives, and supporting innovation.” A global survey conducted on nearly two thousand companies highlighted how these companies are working to electrify their activities in order to reduce exposure to the volatility of fossil fuel prices. But it will probably take years before these investment projects materialize.
The International Energy Agency believes that the current crisis will renew interest in internal and local energy resources, such as renewables and nuclear, but potentially also coal. The organization forecasts investments of 2.2 trillion dollars in 2026 in electrification, energy efficiency, renewables, nuclear, energy storage, and low-carbon fuels: this is an amount almost double that allocated to fossil fuels.
