Renewable Energy Proves Its Resilience Amidst the Hormuz Strait Crisis

• Countries with high shares of renewable energy demonstrated significant resilience against the global energy market instability caused by the Strait of Hormuz closure.
• According to CREA, clean energy capacity added since 2020 helped importing nations avoid approximately $36 billion in coal, gas, and oil import costs during the first five months of the crisis.
• Transitioning away from fossil fuels requires more than just proven technology; it demands a comprehensive redesign of economic, financial, and infrastructure systems.

The Economic Impact of Energy Autonomy

• China and Japan recorded the largest savings, followed by Spain, France, Italy, the Netherlands, Brazil, and India.
• Uruguay serves as a prime example, with renewables providing a record 99.1% of its electricity in 2024—comprising 50.2% hydropower, 33.1% wind, 12.8% biomass, and 3% solar—which slashed average generation costs.

Challenges to Accelerated Transition

• Despite the cost-effectiveness of renewables, global investment fell by $70 billion in 2025.
• Fossil fuels still receive roughly three times more direct subsidies than renewable projects, while over 2,300 GW of renewable and battery capacity remain stuck in grid connection queues.
• Uruguay’s success was driven by long-term strategic planning, cross-party political support, competitive auctions with 20-to-25-year fixed-price contracts, and a focus on systemic grid resilience rather than individual project costs.
• Future energy security relies on redesigning entire economies around renewable infrastructure to reduce vulnerability to geopolitical shocks, inflation, and fossil fuel dependency.