The war on Iran is changing the way renewables are discussed around the world, with Simon Stiell, the executive secretary of the United Nations Framework Convention on Climate Change, telling Reuters that “if there was ever a moment to accelerate that energy transition, breaking dependencies which have shackled economies, this is the time.” Global energy flows have been disrupted with the closure of the Strait of Hormuz, and fossil fuels that have made it to international markets are seeing rapid price increases. This disruption is helping to reframe renewable energy as a matter of energy security and sovereignty, rather than just an environmental concern.

Why this matters: Rises in energy prices filter through every economy in the world, but the impact is most acute for net energy importers like Egypt. Egypt’s monthly natural gas import bill has surged from USD 560 mn before the war to USD 1.7 bn for the same volumes today — an increase of roughly USD 1.1 bn per month, Prime Minister Mostafa Madbouly said Wednesday (watch, runtime: 37:18). Similar price increases for crude, diesel, and butane are also adding to the government’s energy import bill, and there’s no clear timeline for when prices will return to normal, he added.

Renewables are an energy security and sovereignty issue

Renewables’ key advantage is that “once the infrastructure is in place, electricity is not dependent on the price volatility of oil and gas,” Greenpeace MENA Executive Director Ghiwa Nakat tells EnterpriseAM. “That makes renewables a strategic stability asset and, in our current volatile geopolitical context, a precondition for energy security, not just a climate solution,” she explained.

Egypt knows only too well how “overdependence on imports of oil and gas exposes the country to both economic and geopolitical risks,” with the country’s recent experience with power shortages and expensive LNG imports, she added. Unlike imported fossil fuels, which are subject to disruptions, unpredictable financial strains, and the risk of energy shortages and blackouts, once renewables are built, production and costs are predictable.

“Energy security is absolutely part of national security, but true energy security can only be achieved through energy sovereignty,” Nakat argues. To achieve energy security, nations need to invest in “reliable, affordable domestic energy sources that can reduce exposure to global price shocks while ensuring stable electricity for essential systems.” Renewable energy is the ideal solution for this transition — it’s “local, resilient, and far less exposed to geopolitical disruption than fossil fuels,” she adds.

Renewables can become even more important if you’re the one subject to attacks, as they are well-suited for decentralization, Nakat tells us. “Decentralized renewables can be distributed across rooftops, public buildings, farms, factories, and communities, supported by storage, efficiency, and smarter grids.” This creates a “more resilient system by spreading risk and keeping essential services powered closer to where demand exists,” unlike the centralized nature of oil and gas, she adds.

“What we are witnessing in the Middle East should be a wakeup call to policymakers and governments in our region,” Nakat says. While financial considerations are still paramount, the why behind renewables is going to change, Cairo Solar Managing Director Hatem Tawfik tells EnterpriseAM.

The economics were already there

Even before the conflict, renewables made financial sense. “Every 10 MW of solar panels which cost about USD 1.5 mn can save USD 1.5 mn worth of gas annually,” Hatem Tawfik tells EnterpriseAM. This effectively means the investment can pay for itself within a year, making it one of the fastest-return infrastructure options available.

This becomes even more significant in Egypt’s pricing structure, where gas is bought at around USD 14 per MMBtu and sold to the electricity sector at USD 4. That gap creates a heavy subsidy burden on the state, and replacing gas with solar helps reduce both import dependency and fiscal pressure over time.

Egypt is planning to fast-track around USD 2 bn in renewable energy projects for integration into the national grid before next summer, government officials tell us. The move will add 3.1 GW of capacity and expand storage to ease pressure during peak demand and supply constraints linked to rising global prices, they added. Solar is expected to account for the largest share of these additions at around 1.5 GW, with new projects required to include battery storage systems to improve reliability and manage peak loads more efficiently.

Recent data also shows renewable electricity generation in Egypt has reached a record 9.1 GW, up from 6.4 GW in 2023, according to an official document seen by EnterpriseAM. This underscores steady progress, even if it is not yet enough to offset structural exposure.

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