Disruptions to oil and gas flows linked to the ongoing Middle East conflict have exposed structural weaknesses in energy systems still reliant on imported fossil fuels, according to a new policy advisory from the International Renewable Energy Agency (IRENA).
The document details a set of short-, medium- and longer-term measures designed to curb exposure to price volatility and sustain economic stability. This reflects developments in Europe and Asia, where higher shares of renewables have reduced dependence on gas imports and softened the impact of market swings.
Record levels for renewables as deployment falls behind
Renewable capacity additions continue to expand at scale, with 692 GW installed globally in 2025. At the same time, cost reductions have shifted the economics of power generation, with most new renewable capacity now undercutting fossil alternatives. As of 2024, more than 90% of newly commissioned renewable capacity delivers power at lower cost than the cheapest fossil alternative.
Francesco La Camera, IRENA’s Director-General, describes the current situation as a turning point: “The current crisis clearly demonstrates the strategic case for renewables as a national security imperative,” adding that policy responses should prioritise investment in renewable power and electrification.
The advisory also highlights the growing role of hybrid systems combining solar or wind with battery storage, and their ability to provide firm power at competitive cost and in turn reduce reliance on gas-fired generation and improving system resilience.
IRENA: Vast majority of new renewable projects cheaper than fossil fuels
Several national examples illustrate this pattern. In Spain and Portugal, for example, expanded solar and wind capacity has reduced the role of gas in setting electricity prices. In Spain, gas now sets electricity prices only around 15% of the time, compared with nearly 90% in Italy. In parts of Asia, distributed solar and storage have provided a buffer against supply disruptions.
For policy makers, the advisory calls for a near-term focus on deployment speed and system flexibility, particularly in sectors exposed to fuel price shocks. Over the longer term, the emphasis is on investment frameworks, grid development and domestic supply chains.
Key actions outlined in the advisory
• accelerate distributed renewables for critical services such as healthcare and agriculture, including solar PV–battery mini-grids in off- and weak-grid regions
• introduce time-of-use tariffs and demand measures to align consumption with renewable supply
• deploy fiscal incentives such as grants, subsidies and tax measures to support electrification
• fast-track renewable and grid infrastructure projects while securing funding pipelines
• scale up battery storage and demand-side flexibility to integrate higher shares of solar and wind
• streamline permitting and support electrification across transport, heating and industry
• establish stable policy frameworks to attract long-term investment and strengthen domestic supply chains
Sector growth outpaces job creation in global renewables
In the end, the analysis leaves little ambiguity: energy security and decarbonisation are increasingly aligned, as renewables and electrification reduce both cost exposure and system vulnerability. (TF)
