SILVER LINING
Iran War Pushes 25 Countries Into New Electrification Policies
- COP31 in Türkiye will ask countries to meet 35 percent of global energy demand with electricity by 2035, up from 23 percent today.
- The Hormuz closure that followed the Iran war has pushed about 25 countries to adopt structural electrification policies since March, with emerging economies outpacing the U.S. on clean energy.
- Grids are the bottleneck: the IEA says 80 million kilometers of new or retrofitted lines are needed by 2040, and 50 to 60 percent of renewable projects in Vietnam, Thailand and Indonesia were canceled or delayed from 2021 to 2025.
Electrification has become the focus of global climate talks as COP31 draws closer. We already have the technologies to transition away from direct consumption of fossil fuels and toward electricity in our vehicles, homes, businesses, and industry – it is now just a matter of scaling those technologies and doing it at an unprecedented pace, supported by strong policy measures from global leadership.
The central pledge that will be on the table at the upcoming 31st annual United Nations climate conference, to be hosted in Türkiye in November, will call on participating states to commit to meeting 35 per cent of global energy demand with electricity by 2035. As of today, electricity accounts for 23 percent. While this goal is ambitious, leaders claim that it is within “striking distance” if global leaders make a targeted effort to fast-track their electrification transitions.
And the factor that has put this target within reach is perhaps a surprising one – the war in Iran. When the United States and Israel began their military offensive against Iran in February of this year, Iran responded by closing down the Strait of Hormuz – through which one-fifth of the world’s oil and gas trade flowed on any given day – essentially overnight. The sudden disappearance of 18 million barrels per day from the global marketplace caused enormous energy shocks around the world, and especially in cash-poor, import-dependent developing economies.
The result has been that some of the world’s emerging economies have turned their energy security stratgies around on a dime, turbocharging their clean energy transitions to provide reliable and indigenous energy sources and buffer themselves from future global oil and gas shocks. Since March, approximately 25 countries have introduced structural policies to boost electrification, according to Australia’s ABC News. As a result, many of the world’s developing economies – and even some of the poorest – are now outpacing the richest nation in the world when it comes to clean energy development and electrification.
Over the last several years, countries including Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have all overtaken the United States – the world’s largest economy – in their respective clean energy transitions. At the end of 2025, 63 percent of emerging markets in Africa, Asia, and Latin America sourced more of their power generation from solar power than the United States, according to a report from Yale 360. Meanwhile, Pakistan is experiencing one of the most rapid clean energy transitions in global history, and possibly the most rapid buildout of solar power capacity ever.
This development marks a sudden and critical sea change in our global understanding of energy security. “This moment demands attention,” Time Magazine reported in June. “Across the U.S. and globally, interest in clean energy is accelerating faster than at any point in history, and not necessarily because of anything the clean energy movement achieved on its own. Understanding why is critical.”
The reason is simple. Oil and gas no longer represent a reliable and affordable source of energy for many countries as geopolitical turmoil becomes the new normal in fossil fuel markets. In contrast, “Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power,” David Frykman, General Partner at Stockholm-based venture capital group Norrsken, wrote in an op-ed for Fortune in late March of this year. “Every terawatt-hour of domestic renewable generation is a terawatt-hour that no adversary can weaponize.” Moreover, renewables have quite simply become too cheap to fail.
While this is all extremely heartening news against the ever-more urgent context of climate change and the need for rapid global adaptation, this sudden clean energy production boom has led to critical bottlenecks, particularly when it comes to grid connectivity and transmission infrastructure. The International Energy Agency projects that more than 80 million kilometres of additional or retrofitted grid infrastructure will be needed by 2040, essentially requiring the world’s existing grid capacity to double over the next 15 years.
This has already created some major pain points in economies where the development of these ‘arteries of the clean energy age’ has not kept pace with rapid renewable buildout. For example, a large number of planned renewable energy projects across Southeast Asia – one of the regions hit hardest by the Hormuz closure – have stalled out in recent years. A report from consultancy Bain & Company and Standard Chartered notes that, from 2021 to 2025, between 50 percent and 60 percent of renewable energy projects in Vietnam, Thailand and Indonesia were cancelled or delayed.
"The fact that we now have record growth in renewables and that we have record numbers when it comes to sales of EVs means that we have to build out the grid faster," Jan Rosenow, a professor of energy and climate policy at Oxford University, told ABC News. However, "That's not an indicator that the transition is failing," she added. "We can build a bigger grid. The question is, how fast can we do it?"
By Haley Zaremba for Oilprice.com
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