IRENA urges nations to view renewable energy as a strategic shield amid global fuel shocks

A recent advisory from the International Renewable Energy Agency (IRENA) paints the current fuel shock as more than just a market disturbance; it’s a wake-up call about how quickly dependence on imported energy can turn into a strategic vulnerability.

IRENA pointed out that renewables are already playing a significant role in helping countries cope with supply disruptions and lessen their exposure to the rollercoaster of fossil fuel prices. The policy paper references examples from Europe and Asia, like Spain, Portugal, China, India, and Pakistan, where cleaner power sources have contributed to reducing reliance on imported fuels. For governments dealing with tighter budgets and rising inflation, IRENA argues, the case for accelerating renewable deployment is now tied as much to resilience as it is to climate goals.

This timing isn’t accidental. The agency’s message comes amid ongoing tensions in the Middle East, where conflicts have once again revealed how fragile energy systems built around oil and gas can be. In such setups, electricity prices tend to follow global fuel market swings, leaving households and businesses vulnerable to unpredictable fluctuations. IRENA warns that these impacts aren’t limited to increasing power bills, they can set off ripple effects across inflation, industrial output, and overall economic stability, often hitting lower-income populations hardest.

At the same time, the agency used this advisory to highlight how dramatically the economics of clean energy have shifted. It reports that global renewable power capacity continued to grow at an unprecedented rate in 2025, adding 692 gigawatts during that year alone. Overall, the world’s renewable capacity hit 5.2 terawatts. Interestingly enough, over 85% of new renewable projects are now cheaper than fossil fuel options. Since 2010, the cost of solar power has plummeted by 87%, onshore wind by 55%, and battery storage by a massive 93%.

This drop in costs is fundamental to IRENA’s main point. The agency argues that combinations of wind or solar paired with batteries are increasingly capable of delivering 24/7 electricity at lower costs than many traditional fossil fuel plants. For policymakers and planners, this shift matters because it’s not just about variable power generation anymore. The bigger question now is how to develop reliable, dispatchable systems that are built around more affordable, clean energy sources.

Francesco La Camera, the director-general of IRENA, emphasizes that the current crisis reveals renewables are no longer merely a climate initiative, they’re now a matter of national security. In his words, governments should urgently consider measures that direct investments and emergency responses toward more renewable energy installations and broader electrification efforts.

The advisory outlines a three-stage approach. Immediate measures include rapidly expanding distributed renewables, with coordination between governments, utilities, and private partners. It also suggests launching public info campaigns to reduce overall demand, alongside implementing time-of-use tariffs that encourage consumers to shift their electricity use to times when solar and wind are most abundant and prices tend to be lower.

IRENA recommends that governments also leverage fiscal tools, like grants, subsidies, and tax rebates, to speed up electrification. They highlight solar PV and battery mini-grids as particularly important for remote or off-grid communities, where extending central infrastructure is slow or costly. Additionally, boosting the electrification of two- and three-wheelers, public transportation, and shared mobility systems is part of the strategy.

In the medium term, the focus shifts to creating a more favorable environment for investments. This means faster permitting processes, securing project funding against inflation and supply chain issues, and increasing spending on storage and grid upgrades. Such steps would make power systems more flexible and capable of integrating higher shares of wind and solar. Furthermore, resilience is linked to broader electrification of end applications, like heating, EV charging, and sustainable aviation fuels.

Looking further ahead, IRENA stresses the need for clearer policy frameworks to boost investor confidence and to embed electrification into national planning efforts. Strengthening domestic supply chains, promoting hybrid renewable projects, and supporting industrial electrification are also key strategies. Moreover, the agency suggests that public subsidies for fossil fuels should increasingly be linked to progress toward renewable energy targets.

This message particularly resonates with the Gulf region and the UAE, where energy security remains a top strategic concern, even in hydrocarbon-rich markets. As these countries aim to diversify their economies, expand manufacturing, and electrify transport and industry, the advisory implies that this isn’t just about replacing one energy source with another. It’s about building systems that are less vulnerable to international shocks, more adaptable to shifts in demand, and more resilient in the face of geopolitical uncertainties.

Ultimately, IRENA’s broader point is that the energy transition has entered a new phase. Clean power is no longer just an environmentally friendly option but is increasingly seen as a sort of insurance against volatility, supply disruptions, and long-term economic risks. For policymakers balancing short-term crisis management with long-term planning, the message is clear: both approaches, urgent resilience measures and strategic transition, are now inseparable.