Much of the geopolitics of the 20th century was shaped by the location of energy supplies – the Middle East assumed outsize importance because most of the world’s oil reserves are there. Other countries such as Russia, Angola and Nigeria, along with Venezuela, are also blessed – or cursed – with plentiful oil or gas, or both.
But the geopolitical map that has become so familiar to us is changing, and fast, thanks to the rapid deployment of renewable energy. Because, while not every nation has oil, gas or even coal under its soil, everyone has at least some renewable resources, whether that is wind, solar, geothermal or biomass .
A new report from the International Renewable Energy Agency (IRENA) highlights the way the energy landscape is changing, and the dangers and opportunities that it brings to different countries around the world. A New World: The Geopolitics of the Energy Transformation says that the consequences of the shift from fossil fuels to renewable energy could be as momentous as the switch from biomass to coal and oil two centuries ago.
Fossil fuel producers such as Saudi Arabia and Russia will see their influence decline and new energy leaders will emerge, particularly among producers of crucial raw materials such as cobalt, the report’s authors said, while trade relationships will shift and new alliances will emerge.
Oil and gas producers that don’t prepare will find themselves face a significant loss of revenue and even political instability if they don’t act to replace those revenues soon. While some have started on the transition, such as the UAE and Saudi, others such as Venezuela, Angola, Yemen, Iraq and Libya, are likely to struggle to adjust.
Elsewhere, though, the rise of renewables should smooth international geopolitical tensions, because every country in the world has at least some renewable energy potential, so the reliance on a few countries for energy resources is starting to disappear. The energy transformation will change energy statecraft as we know it, said outgoing IRENA President Adnan Amin.
“Unlike fossil fuels, renewable energy sources are available in one form or another in most geographic locations,” he pointed out. “This abundance will strengthen energy security and promote greater energy independence for most states. At the same time, as countries develop renewables and increasingly integrate their electricity grids with neighbouring countries, new interdependencies and trade patterns will emerge. The analysis finds oil and gas-related conflict may decline, as will the strategic importance of some maritime chokepoints.”
The race to gain leadership in clean energy is already well under way and new energy leaders are emerging, most notably China, which has boosted its geopolitical influence by becoming the world’s largest producer, exporter and installer of not just solar panels but also wind turbines, batteries and electric vehicles.
The energy transformation will also create new energy leaders, the Commission points out, with large investments in renewable energy technologies strengthening the influence of some countries. China, for instance, has enhanced its geopolitical standing by taking the lead in the clean energy race to become the world’s largest producer, exporter and installer of solar panels, wind turbines, batteries and electric vehicles. “Fossil-fuel exporters may see a decline in their global reach and influence unless they adapt their economies for the new energy age,” the report says.
“This report represents the first comprehensive analysis of the geopolitical consequences of the energy transition driven by renewables, and a key milestone in improving our understanding of this issue,” said Olafur Grimsson, the former President of Iceland, and chair of the Commission on the Geopolitics of the Energy Transformation that IRENA convened. “The renewables revolution brings energy independence to countries around the world. A fascinating geopolitical future is in store for countries in Asia, Africa, Europe and the Americas. The transformation of energy brings big power shifts.”
The global energy transformation presents both opportunities and challenges, said Amin. “The benefits will outweigh the challenges, but only if the right policies and strategies are in place. It is imperative for leaders and policy makers to anticipate these changes, and be able to manage and navigate the new geopolitical environment.”
The Commission says countries that are heavily reliant on fossil fuel imports can significantly improve their trade balance and reduce the risks associated with vulnerable energy supply lines and volatile fuel prices by developing a greater share of energy domestically. With energy at the heart of human development, renewables can help to deliver universal energy access, create jobs, power sustainable economic growth, improve food and water security, and enhance sustainability, climate resilience and equity.