Winner and Losers with Rise of Renewable Energy

In geopolitics, who benefits from the rise of renewable, solar, and wind energy Who will not benefit or be at increased risk?

The rise of renewable energy sources such as solar and wind power has far-reaching implications in geopolitics. As the global energy landscape shifts from fossil fuels to renewables, the winners and losers will largely depend on their energy portfolios, economic models, and geopolitical strategies. Here’s a breakdown of who benefits and who faces increased risks:

Who Benefits from the Rise of Renewable Energy?

1. Countries Rich in Renewable Resources

China: China is the world’s largest producer of solar panels, wind turbines, and batteries. It controls much of the global supply chain for renewable energy technologies, particularly in rare earth metals, lithium, and cobalt, which are critical for batteries and electronics. China’s dominance in this space allows it to shape global renewable energy markets and technology standards. By investing heavily in renewable energy infrastructure, China strengthens its global influence and energy security.
Europe: The European Union has been a leader in promoting renewable energy policies, especially through its Green Deal. Countries like Germany and Denmark, which have been pioneers in wind and solar power, will benefit from reduced dependence on fossil fuels, increased energy security, and the creation of green jobs. Europe’s aggressive push for carbon neutrality also places it at the forefront of developing new technologies and renewable energy systems.
United States: The U.S. has significant renewable energy potential, particularly in wind and solar power. States like Texas (wind) and California (solar) are well-positioned to lead in the renewable energy sector. With investments in infrastructure and clean technology, the U.S. can benefit from job creation, reduced reliance on foreign energy, and increased global competitiveness in green tech.

2. Countries Dependent on Energy Imports

Japan: Japan imports nearly all of its energy, primarily in the form of fossil fuels. As the cost of renewable energy falls and technology becomes more efficient, Japan can benefit from reduced import costs and greater energy independence, particularly in offshore wind and solar.
South Korea: Like Japan, South Korea imports most of its energy. The rise of renewables gives South Korea the opportunity to diversify its energy sources, reduce its reliance on imported oil and gas, and invest in emerging green technology industries.
India: India has massive solar potential and is making significant investments in renewable energy. As it shifts toward clean energy, India can reduce its reliance on expensive fossil fuel imports, improving its energy security while also addressing pollution and climate change issues.

3. Technology and Infrastructure Innovators

Companies and countries developing renewable energy technologies: Firms and countries that specialize in energy storage, battery technologies, and grid infrastructure stand to gain tremendously from the renewable energy boom. The transition to renewables requires large-scale investment in smart grids, energy storage, and transmission infrastructure. For example, countries like South Korea (batteries) and Germany (smart grids) are well-positioned to benefit.

4. Emerging Markets with Access to Financing

Many developing countries, particularly in Africa, Latin America, and Southeast Asia, are increasingly embracing renewable energy as costs drop and investment in infrastructure becomes more accessible. Countries that can attract financing for solar and wind projects—either through international aid, development banks, or private investors—can leapfrog fossil fuel-based development and secure long-term, low-cost energy.

Who Will Not Benefit (or Will Be at Increased Risk)?

1. Fossil Fuel-Dependent Economies

Middle Eastern Oil Exporters: Countries like Saudi Arabia, Iraq, and Kuwait, which rely heavily on oil exports for their national revenues, face significant risks. As global demand for oil declines, these economies could see revenue losses that impact their ability to fund social programs and infrastructure. Although some countries, like Saudi Arabia, are making attempts to diversify their economies (e.g., through initiatives like Vision 2030), the scale of the challenge is immense.
Russia: Russia’s economy is heavily reliant on oil and natural gas exports, particularly to Europe. As European countries transition to renewables and wean themselves off Russian energy, Russia faces both economic and geopolitical challenges. Russia’s influence in global energy markets, particularly its ability to wield gas supplies as a political tool, will diminish as countries reduce their reliance on fossil fuels.
Venezuela and Nigeria: Countries that depend on oil exports but lack diversified economies or robust governance structures are especially vulnerable. Venezuela and Nigeria have already been hit hard by fluctuating oil prices, and the shift to renewables could exacerbate their economic struggles, leading to increased instability.

2. Countries with Limited Renewable Resources

Small and landlocked countries: Countries that lack access to abundant renewable resources (sunlight, wind, geothermal) or the infrastructure to import renewable energy may face challenges. For example, some countries in Central Asia or Eastern Europe may struggle to transition to renewables if they cannot develop domestic resources or tap into regional energy grids.
Countries reliant on coal: Countries like Poland and Australia, which have significant domestic coal industries, face difficult transitions. Although Australia has great solar and wind potential, the political and economic ties to coal mining make the transition more challenging. Job losses and regional economic disruption in coal-dependent areas will be major concerns.

3. Oil and Gas Companies

Global oil majors like ExxonMobil, Chevron, and BP face existential challenges as renewables grow. While some companies are beginning to diversify their portfolios into clean energy, their core business models remain rooted in fossil fuels. The energy transition threatens their long-term profitability unless they successfully adapt to new market realities.
Petrochemical and natural gas companies may also be at risk as technologies for renewable energy and storage improve. The increasing competitiveness of electric vehicles and renewable-powered electricity could reduce demand for these fossil fuel-based industries over time.

4. Countries Heavily Invested in Nuclear Energy

France and other countries heavily invested in nuclear power may find themselves in a difficult spot. While nuclear is low-carbon, the rise of cheaper renewables and the public’s increasing distrust of nuclear energy following disasters like Fukushima could make nuclear less attractive. Countries that have invested heavily in nuclear infrastructure might find it hard to compete with the falling costs of wind and solar energy.

Geopolitical Shifts

The shift toward renewables is also reshaping global power dynamics:

Decentralization of Energy: Renewable energy allows countries to produce their own energy domestically, reducing dependency on global energy markets dominated by fossil fuel exporters. This decentralization shifts power away from traditional energy superpowers like Saudi Arabia, Russia, and the U.S., and toward countries with strong renewable energy resources.
New Energy Alliances: Countries with strong renewable resources are forming new energy alliances and partnerships. For instance, Europe is increasingly looking to the North Sea (for wind energy) and to the Mediterranean and North Africa (for solar energy) as future sources of clean energy.
Control of Key Resources: The demand for rare earth elements, lithium, and cobalt, which are essential for renewable technologies like batteries and wind turbines, is reshaping geopolitics. Countries like China (which controls much of the rare earth supply chain) and Chile (a major producer of lithium) are gaining leverage. However, concerns over environmental and human rights issues in mining operations in places like the Congo (a major source of cobalt) are growing, making resource governance a key geopolitical battleground.

In summary, while many countries and industries stand to gain from the rise of renewable energy, those heavily reliant on fossil fuels or with limited renewable resources face significant risks. The global transition to renewables is not just an environmental issue—it’s also a profound geopolitical shift that will reshape global power structures and alliances for decades to come.