The global energy transition is altering geopolitics in ways that are both regular and genuinely new. It is not new, because energy has always been a way to define power: whoever controls the fuels, the means of transport, and the technologies, not to mention the prices, has often gained the upper hand over others. It is new because a system based on oil and gas trade is slowly giving way to one based on electricity, manufactured clean technologies, and the minerals and industrial capacity that enable those technologies.
The balance of power is therefore beginning to hinge less on who has giant hydrocarbon reserves sitting atop them and more on who can finance, construct, and secure the supply chains for solar panels, wind turbines, batteries, electrolyzers, power grids, and the critical materials behind them.
At the same time, climate change is no longer just an environmental story but increasingly a direct cause of insecurity, fiscal crisis, the risk of displacement, and political fragility, compelling states to treat decarbonization and adaptation as strategic policies, not simply matters of moral will. The result is a new scramble for industrial edge and durability, as well as an ongoing battle over the nature of fairness, the space for development, and the costs of the transition.
One of the more visible indicators of this change is the pace at which renewables have gone mainstream. Global renewable capacity has been growing rapidly, and the mix of new additions to the power grid has also shifted strongly toward renewables. IRENA finds that renewables have contributed significantly to new power capacity additions in recent years; many have accounted for a physical share of total installed power capacity. This share increased by 43% by the end of 2023.
Then there were increases in the larger days of time, years, according to later updates, with renewables’ share at 43% in the year, with annual capacity expanding in 2024. This dynamism is not a question of climate policy alone. It reflects economics.
Over the past decade, the costs of critical mitigation technologies have dropped dramatically, helping renewable sources beat many fossil alternatives in new-build power markets, while power storage is becoming increasingly useful as power grids figure out how to cope with variability.
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At the political level, multilateral climate diplomacy has also shifted into space that would have been unthinkable not so long ago: the result of the global stock take outcome in COP28 included language calling for moving away from fossil fuels in energy systems – this is phrased in terms of ‘just, ordered and equitable’ and is linked to the aim of net zero by 2050. This combination of market momentum, cost declines, and political signaling is unreservedly altering how states define the concept of “energy security”.
In the fossil era, energy security often meant getting steady flows of oil and gas through the seas, in pipelines, long term contracts, and military protected chokepoints. In an electricity and renewables heavy system, the security issue changes. Sunlight and wind cannot be embargoed at the border, and domestic renewable resources have the potential to reach a point where volatile fuel imports are reduced.
Yet there are new vulnerabilities: supply chains for equipment and materials can be concentrated; grids constitute the crucial backbone; resources for flexibility (storage, demand response and interconnection) constitute the strategy; and cyber risks are increased as a digitalized grid constitutes a larger attack surface.
This is why it is a fallacy to think that energy security thinking can be simply copied and pasted from the fossil era. IRENA’s work on energy security in the transition emphasizes the need for priorities to reflect an ever-evolving situation of more decentralization of the system, electrification and technology intensification, where resilience and well-being need to be put at the center instead of just the old imagined supply of fuel.
In Europe, for instance, the push to mitigate the reliance on imported fossil fuels in the wake of Russia’s invasion of Ukraine has seen the policy on renewables and efficiency put into high gear – but also revealed grid and permitting bottlenecks.
Even industry leaders have warned that inactivity on permitting and an infrastructure deficit can diminish the strategic advantage of renewables, as there is not only a generation system but a secure system, which depends on the ability to hook up to a generation system, balance and deliver it.
This is where the “new power map” begins to take shape. Under oil geopolitics, the exporters of oil, in possession of large oil reserves, have the option to accumulate external rent by pricing their products and/or altering their supply and assertion of geopolitical power by investment flows and security partnership.
Under the clean energy transition, influence has increasingly shifted from industrial ecosystems: manufacturing scale, innovation, standards-setting, and control over key processing and refining nodes. Solar panels, batteries and wind components are not dug out of the ground as finished products: they are produced in complex global value chains. So that turns geopolitics into an industrial policy and subsidies and so on, trade rules and technology controls.
The United States has implemented major fiscal incentives to accelerate clean energy deployment and domestic manufacturing, including bonus structures tied to domestic content and evolving supply chain rules for clean technologies.
The European Union has taken a similar approach with the issues of avoiding strategic dependencies and developing capacity throughout the extraction, processing, and recycling sectors. These choices are not solely of an economic nature but of a strategic one: they are hedges against a world in which a rival may come to use a choke point in the same way in which the oil producers could.
Critical Minerals are perhaps the most obvious sandbox for this to be leveraged in the transition, given their sheer leverage. Demand growth for lithium, nickel, cobalt, graphite, copper, and rare earth elements is demonstrative of batteries, electric motors, electricity grid expansion, and other clean technologies.
As per the International Energy Agency critical minerals outlooks, demand is both rising and there are risks of concentration in the mining and, particularly, processing and refining sectors. Concentration is significant in that it allows for the possibility of disruption, price shocks and strategic coercion. Over the past couple of years, export controls and restrictions have emerged as a key tool of great power competition, especially among the United States and China.
Reuters has reported instances where China has restricted or tightening exports of strategic minerals and products dependent on them, and added a level of uncertainty for industries that are dependent upon them. These kinds of actions play a role as a reminder that the energy transition does not in itself create a world at peace; that the energy transition can instead shift competition onto other commodities and technologies.
The transition therefore creates a paradox, that although the technologies that allow renewables to work may be offered at home, they could create a situation in which dependence on any one imported fuel is reduced but dependence on globally traded materials and manufacturing hubs is increased.
China’s role in clean tech manufacturing and components of mineral processing has been one of the most important geopolitical facts of transition. In many clean technology supply chains, China has developed scale, cost advantages, and learning curves across multiple stages, from upstream processing to final product manufacturing. For countries viewing strategic competition with China, this is not just an economic issue.
It is what makes it a security issue-by having restricted access to certain components which are really useful for grids, or for defense purposes, or for the electrification of transportation? That’s the concern in setting policy. The EU’s Critical Raw Materials Act, adopted in 2024, is clearly aimed at minimizing exposure, as it has imposed benchmarking of domestic capacity to minimize exposure and over-reliance on a third country for strategic materials at key processing stages.
The US approach is net carrots and sticks in respect of supply chains and of concern entities, particularly in the electric vehicle battery ecosystem. Together, these policies comprise a new type of geo economic strategy: decarbonization + reindustrialization + resilience even if these increase tensions with free trade norms.
Yet it would be a mistake to think that this new competition is only a US China or EU China story. The energy transition is redistributing the bargaining power among numerous actors, including middle powers and resource-rich developing countries. Many of the minerals needed for the clean technologies are concentrated in countries that historically did not control the high value segments of global energy systems.
The Democratic Republic of Congo, Chile, Argentina, Indonesia, Australia, South Africa, to name just a few, possess important reserves of cobalt, lithium, nickel, manganese and platinum group metals. This provides space to upgrade, like in industry, through better fiscal deals and diversified partnerships. But it also produces the risks of resource nationalism, corruption, environmental damage and conflict around extraction, particularly around weak governance.
If repeated transition reproduces extractive patterns of the past, it could see the creation of a backlash which slows down deployment and widens inequalities. A secure transition therefore does not only require diversity of supply, but, on the other hand, creates transparent contracts and high labor and environmental standards and establishes credibility-in terms of revenue shares-the local community as benefactors, not casualties.
Electricity itself is becoming a geopolitical commodity. Unlike oil, it’s hard to ship electricity across oceans at scale, but electricity can be traded on a regional basis via interconnectors, as well as converted into various energy carriers such as hydrogen, ammonia, or synthetic fuels. This opens up new strategic routes of North Africa to Europe, the Gulf to Asia, Australia to East Asia and potentially parts of Latin America into global green fuels markets.
At the same time, cross border grids make interdependence. What stabilizes interdependence can also be weaponized if an actor can win control of flows (disrupt supply), shape prices (use prices as an instrument of power), or, as a consequence, control grid fragility. But research on the geopolitics of electricity puts this in perspective, how grids, interconnections, and the control of infrastructure can be used to hone political power in ways that may not be visible like oil tankers but no less real.
In Europe, for instance, the fast expansion of wind and solar has already caused a shift in the internal energy balance, lowering the use of coal and contracting the need for importing gas, but it also creates a heightened importance of storage capacity as well as of grids and of interconnection. In other regions, a similar story is simply emerging: Whichever can build flexible and resilient power systems himself benefits from greater economic competitiveness and strategic autonomy.
Climate change is one more layer that is added to this transformation: it is not just about energy, but about survival and state capacity. The synthesis in the IPCC focuses on the scientific literature, which emphasizes that warming has already driven sweeping impacts and risks that differ in terms of vulnerability across regions and societies.
For geopolitics this matters as it is the strain on budgets posed by climate hazards, impacts on agricultural and water systems, pressures on migration and even how climate hazards interact with drivers of conflict. It also changes the politics of energy itself. Heatwaves increase electricity demand; droughts diminish hydropower; storms damage, and even destroy, coastal infrastructure; and extreme events highlight the frailty of energy systems.
This generates a logic on resilience investments for security: grid upgrading, protection of transmission corridors, diversification of generation and building of capacity of adaptation. It’s also going to refine discussions of climate finance and loss and damage, as states with the least responsibility for accumulating greenhouse gas emissions are often the ones with the most to pay. The transition thus becomes not only with regard to industrial superiority, but above all a negotiation of justice and responsibility.
The changing economics of clean energy is already affecting the strategic landscape of the exporting and importing countries. Traditional centrifuge exporters of hydrocarbons are confronted by an array of futures. Some may manage to diversify and re-purpose existing advantages (capital, infrastructure, geographic position) in new roles, in petrochemicals, blue and green hydrogen, or renewable exports.
Others may experience falling rents, financial crises, and destabilization at home if they remain stuck in oil addiction when global demand levels off and starts to decline. Scholarly reviews of renewable energy and geopolitics have often pointed to the fact that many former hydrocarbon exporters might be among the most exposed “losers” of the transition, depending on how fast they adapt and how strong their institutions might be.
For importers, the transition may be a path to enhanced strategic autonomy, provided they address supply chain vulnerabilities and grid constraints. Europe’s experience since 2022 shows the flip side: renewables can help prevent import dependence, but permitting delay, grid expansion and storage deployment can slow the benefits of security.
Industrial policy is emerging as the arena for clashes between these trends. Governments are no longer basing the energy transition solely on meaningless market logic. They are trying to influence supply chains with subsidies, local content rules, tax credits, strategic public procurement etc. The US Treasury has issued guidance that is linked with domestic content incentives for clean energy projects as part of a larger effort to ensure that investment is being channeled into domestic industrial capacity and jobs, teams of people, not just emissions reductions.
The EU’s approach, via the Critical Raw Materials Act, also draws the same connection between climate targets and strategic autonomy and control of supply chains. Such strategies could accelerate deployment and resilience-building, but could also fragment global markets, spark trade disputes, and slow the diffusion of technology to poorer states if access were conditional on geopolitical alignment.
In practice, the world may head towards “friend shoring” in some of the more important supply chains, with blocs competing to ensure trusted sources and processing capacity.
This is also why it is unlikely that such a transition will create a clean break from fossil geopolitics in the near term. Gas and oil are still very much at the center of many economies and security strategies, with certain climate agreements explicitly considering the role that “transitional fuels” can play while ensuring energy security.
This creates a vague co-contribution period: fossil fuel markets are still sensitive to wars, sanctions, and price spikes; clean technology markets are sensitive to mineral bottlenecks, export controls, and manufacturing concentration. The overlapping can increase instability.
A disruption in, say, oil markets that comes without warning still reverberates through inflation and political stability, while such a disruption in, say, mineral processing or battering inputs can pause electrification and weaken decarbonization trajectories. Managing this overlap requires the use of common sense realism: energy transition policy needs to be designed as a security policy, which must have redundancy, diversification, and contingency planning in place.
A further geopolitical consequence is that alliances and partnerships are being rewritten in the clean technology and minerals. We can already see an accumulation of bilateral and mini-lateral initiatives on critical minerals, green hydrogen corridors, grid interconnections, and financing for clean infrastructure.
For the Global South, this opens an area for negotiation: States can try to obtain favorable terms by playing large-power-offered deals against each other, though they may also be dragged into rival blocs. The results are likely to be best where developing countries, rather than seeing minerals and renewable resources as a chance to simply take a quick rent-casualty, can see the platform for long term value adding: local refining wherever possible, skills development, research partnerships, industrial clusters around batteries, solar manufacturing or green fertilizers production.
This is not easy, as it requires stable policy, infrastructure, and governance; it is just the kind of strategy that can save the clean transition from being a repeat of old extractive dependency.
The picture that is emerging, then, is not a simple narrative of “renewables equal peace.” It is a tale of changing limitations, about new weapons of power. Clean energy can subside exposure to imported fuels, as well as blunt some of the historic chokepoint geopolitics, but make a new geography of vulnerability: the geography of minerals, manufacturing centers, the grid infrastructure, data, and standards.
It can provide energy to new producers and innovators by enabling them to do things previously reserved for the rich. On the other hand, protectionist industrial policies and rich states being priced out of terms of capital can contribute to increasing extremes of inequality by leaving poor states with little to no say over how their wealth is extracted, or how their territory is used, or forcing poor solar producers to compete for assertion to solar and raw material production while the rich, with their protected solar input, do not need to spend mining into the wealth of poor nations.
It may build resilience, but on the other hand, adds new dimensions to the security game towards cybersecurity and infrastructure resilience. In this sense, the transition would be best understood as a re-ordering of power rather than the end of power politics.
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A credible path forward is reliant on the choices which view the decarbonization, development and security as a single package. First, supply chain diversification needs to be coupled with responsible mining and community protection, or else social conflict will decelerate projects and delegitimize the transition.
Second it is necessary to make grid resilience a strategic priority, because the security of an electrified system is grid security. Third, industrial policy should not have a goal of closing off technology diffusion in order to achieve resilience; otherwise, global emissions goals become more difficult to meet. Fourth, climate finance and climate adaptation support will need to scale, since the costs of uncontrolled climate impacts will manifest themselves in instability, humanitarian crises and risks of conflict geopolitically.
Finally, the transition calls for a diplomacy that is honest about competition, but committed to not weaponizing. The world is entering an age in which energy independence may increasingly mean being able to build and control clean systems at home, but in which energy interdependence will manifest itself in minerals, technological and electricity networks, not in oil tankers and pipelines alone.
If there is one lesson from the evidence, it’s that it’s not only changing the strategic landscape more quickly than many institutions are adapting to it. Renewables are increasing in reduced terms and their share in newly added capacity has become dominant in several snap-shots in recent time. Climate agreements now openly represent the way developed world travel to move away from fossil fuels, even if figuring out the transitional realities.
Governments are changing the instruments of policies to minimize strategic dependencies, particularly in areas concerning critical minerals and industrial capacity. And significant power competition is already showing in export controls and supply chain leverage – a sign that the clean economy is going to be fighting ground. In short, the transition is not just a technical revolution in the way in which energy is produced. It is a reorganizing of wealth, power, weakness, and bargaining power.
States that understand this at an early stage, and progressively develop strategies rooted in the twin principles of ‘clean deployment and resilient supply chains and fair development’, are likely to influence the emerging order. Those which view transition as the agenda of someone else, or look for it as a binding UN check that isn’t about climate might find that they are once again drawn out on the new map of where the power lies.
*The views presented in this article are the authors’ own and do not necessarily reflect the views of The Diplomatic Insight.
Atiqullah Baig Mughul
Atiqullah Baig Mughul is a graduate in International Relations, specializing in security studies, Middle East politics, diplomacy, and policy-oriented geopolitical research. He can be reached at atiqullahmughal18@gmail.com
