Renewable energy shift 'could change global distribution of power'

A report from Irena has found that the rapid growth of renewable energy will have a significant impact on geopolitics and socio-economics

A view shows the Mohammed bin Rashid Al Maktoum Solar Park, the largest single-site Concentrated Solar Power (CSP) project in the world, south of Dubai, United Arab Emirates March 19, 2018. Picture taken March 19, 2018. REUTERS/Satish Kumar
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A new age of energy will alter the global distribution of power, a report from the International Renewable Energy Agency says.

The report, A New World, was launched in Abu Dhabi on Friday by the Global Commission on the Geopolitics of Energy Transformation at the Irena Assembly, which runs until today.

It states the effect of the rapid growth in renewable energy on geopolitics and socio-economics may be as significant as the impact of fossil fuels two centuries ago.

This could mean the redistribution of global power, the formation of new global alliances and lead to the emergence of new energy leaders. The transformation, the report says, will “change energy statecraft as we know it”.

“Fundamental changes are taking place in the global energy system that will affect almost all countries and will have wide-ranging geopolitical consequences,” the report says.

“The energy transformation will alter the global distribution of power, relations between states, the risk of conflict, and the social, economic and environmental drivers of geopolitical instability.”

With modern life reliant on fossil fuels, the report points out that their geographic concentration “has had a significant impact on the wealth and security of nations”.

But now developing economies have the opportunity to leapfrog the centralised power grids straight to off-grid, renewable energy.

“Renewables will also be a powerful vehicle of democratisation because they make it possible to decentralise the energy supply, empowering citizens, local communities and cities,” the report says.

“While the scope and pace of the energy transformation cannot be predicted, its impact on countries, communities and companies will be profound.”

The Mena region and Russia are the most exposed to reductions in fossil fuel revenues. With an average net export that accounts for more than a quarter of their gross domestic product, declining revenues will hit their economic growth and national budget.

The report classifies Gulf states as “highly exposed and highly resilient”, meaning that although they are dependent on fossil fuels, they have capital to reinvent themselves.

The UAE’s moves towards economic diversification and a post-oil strategy is highlighted in the report as an example of how the risks can be reduced.


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The most exposed countries include Libya, Angola and the Republic of Congo, because they are highly dependent on fossil fuels and lack the finances to buffer themselves against the change in the market.

Small Island Developing States, such as Bahrain, the Maldives and Comoros, stand to benefit the most from the shift.

They are extremely vulnerable to climate change but have ample renewable energy sources, and the transformation will promote development.

Sub-Saharan Africa will also benefit from the shift because generating renewable energy will create jobs and boost economic growth.

China will also gain, as will its global influence. It is highly dependent on oil imports, but also holds a leading position in renewable energy innovation and investment. The country accounted for 45 per cent of such investments in 2017.

The status of US and Latin America are unlikely to change, the report says. The US is close to self-sufficient in energy and is a leader in new technology.

Countries must prepare for the changes and develop coping strategies, the report warns.

“Despite difficulties, the energy transformation will move the world in the right direction by addressing climate change, combating pollution, and promoting prosperity and sustainable development,” it says.

Based in Abu Dhabi, Irena is an intergovernment agency that promotes renewable energy.

The Global Commission on the Geopolitics of Energy Transformation was established to examine the effects that the shift to renewable energy would have on global economies and politics.