A new analysis from the Centre for Research on Energy and Clean Air argues that the ongoing Middle East conflict is accelerating the global shift toward renewable energy rather than reviving coal. The CREA assessment, released in spring 2026, finds that war-driven disruptions to fossil fuel supply chains are reinforcing the economic advantages solar and wind already hold over coal and natural gas, pushing governments and investors further toward clean energy.
The finding arrives against a backdrop of record-setting coal consumption. The International Energy Agency confirmed in its Coal Mid-Year Update for 2025 that global coal demand reached an all-time high in 2024. But the IEA projects that consumption will plateau through 2025 and 2026, held in check as advanced economies retire coal plants fast enough to offset rising demand in parts of Asia and Africa.
How the conflict is reshaping energy calculations
Escalating hostilities near the Strait of Hormuz, through which roughly a fifth of the world’s oil and a large share of liquefied natural gas shipments pass, have driven up shipping insurance costs and created new uncertainty for fossil fuel importers. Repeated attacks on commercial vessels and energy infrastructure in the region have tightened LNG spot markets, with Asian spot prices climbing sharply since late 2025, according to S&P Global Commodity Insights reporting.
CREA’s analysis argues that these disruptions are not sending countries back to coal. Instead, the higher cost and greater risk of importing fossil fuels are making domestically produced renewable electricity look even more attractive by comparison. The group points to accelerating solar and wind deployment in countries like India, South Korea, and several European Union members as evidence that energy security concerns are translating into clean energy buildouts rather than coal lock-in.
The cost data supports that logic. According to the International Renewable Energy Agency’s most recent power generation costs report, the majority of new solar and onshore wind projects commissioned globally now produce electricity more cheaply than new coal or gas plants. In many markets, new renewables even undercut the operating costs of existing fossil fuel generators, a threshold that makes early retirement of coal plants economically rational.
The coal plateau, explained
The IEA’s plateau forecast hinges on a tug of war between two groups of countries. In the United States, the European Union, and other advanced economies, coal-fired power generation has been declining for years as aging plants close and renewables plus natural gas fill the gap. That trend continued through 2025.
In China, the world’s largest coal consumer, demand growth has slowed markedly as the country’s massive solar manufacturing and installation boom absorbs an increasing share of new electricity demand. China added more than 200 gigawatts of solar capacity in 2024 alone, according to its National Energy Administration, a pace that is beginning to flatten coal burn even as the economy grows.
India and Southeast Asia remain the primary sources of coal demand growth. New coal plants are still being commissioned in both regions, driven by fast-rising electricity consumption and, in some cases, by concerns about grid reliability. But even in India, solar capacity additions have outpaced coal additions for several consecutive years, and the government’s renewable energy targets suggest that trajectory will continue.
The net result, as the IEA projects, is a global coal demand line that goes sideways rather than up. CREA’s contribution is to argue that Middle East instability is reinforcing that plateau by making the fossil fuel alternative riskier and costlier at precisely the moment when renewables are cheapest.
Where the evidence has limits
Not all of CREA’s argument rests on hard data. The group acknowledges that granular capital expenditure figures showing a direct, war-driven reallocation of investment from fossil fuels to renewables have not yet been published by major financial institutions. The causal chain connecting Middle East conflict to faster renewable deployment relies partly on inference: fossil supply disruption raises prices, higher prices improve the relative economics of clean energy, and better economics drive faster buildout.
Each link in that chain is individually well-supported, but the full sequence has not been quantified in a single peer-reviewed study. Readers should treat the “war boosts renewables” framing as a strong directional argument rather than a precisely measured effect.
There is also genuine uncertainty about how long the conflict’s energy market effects will last. If hostilities ease and shipping through the Strait of Hormuz normalizes, the risk premium on fossil fuels could shrink, weakening one pillar of the renewable advantage. Conversely, a wider or more prolonged conflict could accelerate the shift further.
Financing conditions in emerging markets add another variable. Many developing countries want to build more solar and wind but face higher borrowing costs than wealthy nations, limiting how fast they can scale up. Whether war-driven fossil price spikes will unlock new concessional finance for clean energy in those countries, or simply raise energy costs without triggering a transition, depends on policy decisions that have not yet been made.
What this means for energy bills and policy
For households and businesses already feeling the pinch of higher energy costs tied to the conflict, the practical implication is that locking in renewable energy contracts or investing in on-site generation like rooftop solar can serve as a hedge against fossil fuel price swings. Long-term power purchase agreements for wind or solar provide price certainty that gas contracts linked to volatile spot markets cannot.
For governments, CREA and the IEA data together suggest that emergency measures like fuel subsidies or rushed coal procurement may ease short-term pain but do not address the structural vulnerability of depending on long, geopolitically exposed fossil supply chains. Grid investment, storage deployment, and regulatory reform to speed renewable permitting offer a more durable response.
The coal comeback that some analysts predicted when prices spiked has not materialized in the IEA’s numbers. What has materialized, according to CREA, is a conflict-sharpened case for the energy transition that was already underway. Whether that case translates into faster action will depend less on the war itself than on choices made in the months ahead by energy ministers, utility executives, and investors deciding where to put their next dollar.
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*This article was researched with the help of AI, with human editors creating the final content.
