Renewable Energy Prevents Coal Resurgence During Middle East Conflict
Fresh analyses published on Wednesday demonstrate that solar and wind power have protected the global economy from the most severe consequences of the energy crisis triggered by the US-Israeli military action against Iran. The data directly challenges widespread predictions of a "coal comeback" that emerged following the blockade of the strategic Strait of Hormuz.
Clean Energy Absorbs Gas Shortfall
According to a detailed report from the Centre for Research on Energy and Clean Air, worldwide fossil fuel power generation actually decreased by 1 percent year-on-year during March. This decline occurred despite significant disruptions to gas supplies from the Middle East. Crucially, the analysis found that record levels of solar and wind capacity expansion absorbed the reduction in gas-fired generation, rather than coal plants filling the gap.
Outside China, the shift was even more pronounced: coal-fired power generation fell by 3.5 percent, while gas-fired generation dropped by 4 percent. Simultaneously, solar energy production surged by 15 percent and wind power increased by 7.6 percent. Notably, no coal units were returned to service or had their retirement delayed in any nation during this critical period.
Contradicting the Coal Comeback Narrative
A separate investigation into seaborne coal trade conducted by energy consultancy Bombay Strategy, utilizing Kpler shipping data, revealed that global coal imports in March reached their lowest point in five years. Imports fell approximately 7.6 percent year-on-year to 102.8 million tonnes.
These findings directly contradict the prevailing narrative that took hold after several Asian nations, including South Korea, Japan, and Thailand, announced measures to extend coal plant operations in response to Middle Eastern gas shortages. As the energy crisis disproportionately affected Asia, India instructed coal plants to operate at "maximum capacity," South Korea removed operating caps on coal-fired generation, and Japan permitted older plants to run at full capacity for up to one year.
Analysts Question Practical Impact of Coal Measures
Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air, emphasized that such policy announcements had limited practical significance. "In general, coal power plants operate at as high rates as possible to start with, so there is little to no scope in most countries for coal-fired generation to increase in the short term," Myllyvirta explained.
"The measures announced by Japan and Korea would at most increase coal-fired power generation by 1-2 percent in each country for a limited period." Myllyvirta further clarified that increased coal generation in Japan and South Korea was unrelated to the Hormuz crisis, instead attributing it to lower operating rates of nuclear fleets in those countries.
A Different Response Pattern Emerges
The current crisis response marks a significant departure from historical patterns. Following Russia's invasion of Ukraine in 2022, daily seaborne coal shipments surged 9.7 percent in the initial fortnight and remained elevated. In contrast, after the Hormuz blockade, coal shipments actually fell 2.5 percent in the first fourteen days, recovering to just 0.5 percent above pre-war levels by day forty.
Hozefa Merchant, global energy lead at Bombay Strategy, observed: "Coal trade volumes for March tell a very different story of how the world is reacting to LNG shortages compared to predictions made by the coal lobby. Unlike in 2022 during the Russia-Ukraine war, where LNG shortage led to panic buying of floating coal cargo, this time we've actually seen a decline in total volumes altogether."
Structural Shift in Global Energy Capacity
Both analyses point to a fundamental structural change: the massive scale of clean energy deployment since the last major energy crisis. Between 2022 and 2025, the world added over 2,000 gigawatts of renewable capacity. The solar and wind capacity installed in 2025 alone is estimated to generate approximately 1,100 terawatt hours annually—roughly double the electricity that would have been produced by all the LNG transiting Hormuz before the blockade.
"The record growth in global clean power generation, particularly solar and wind, has helped ease the impact of the latest fossil fuel crisis," stated Myllyvirta. "The increase in clean electricity offset the fall in gas-fired power generation following the Hormuz blockade, preventing a jump in coal-fired power generation."
Cautions and Regional Exceptions
The crisis has not left the power sector completely unscathed. China experienced a gas-to-coal shift in coastal provinces, though with gas comprising only 3 percent of its overall electricity generation, the switching potential was limited. Malaysia and the Philippines, as LNG-dependent nations, recorded increases in coal imports as they sought cheaper alternatives. Pakistan witnessed a dramatic rise in coal usage, albeit from a very low baseline.
Merchant cautioned that March data provides only an early indication, noting "Since this is an ongoing crisis, things may change. But data so far points to no surge in coal demand."
Discouraging Outlook for New Fossil Fuel Investment
For potential new fossil fuel investments prompted by the current crisis, the structural outlook appears discouraging. Myllyvirta highlighted that new fossil fuel projects require years to become operational. "The strait will open at some point, and in the meanwhile accelerated clean energy and electrification will have made a major dent in fossil fuel demand, leaving the global market oversupplied," he explained. "A volatile but structurally oversupplied market is a terrible basis for investments."
The analyst concluded with a forward-looking perspective: "To mitigate the effects of the current crisis and make such recurring global emergencies a thing of the past, it's essential to use this moment to accelerate the global energy transition."
