Why clean energy is key to building a more resilient future in uncertain times

Power systems worldwide are facing mounting challenges. Between increasing geopolitical tensions, renewed hybrid warfare and extreme weather events, investment priorities in the electricity sector are rapidly shifting.

While the design of energy systems has, in recent decades, been increasingly guided by affordability and sustainability imperatives, energy security is back in the spotlight – most recently when a massive power outage hit the Iberian peninsula.

In response to this shift, resilience offers a unifying framework for adapting to a wide range of disruptions while balancing all three imperatives of the “energy triangle” – equity, security and sustainability – in what is known as the energy "trilemma".

Electricity is a necessity in contemporary societies. It powers hospitals, security and essential supply chains like food and water, and is a key enabler for our economies and critical sectors such as transport and finance. We need to ensure it is available round the clock.

Yet, power risks becoming a critical weak point in modern societies' security. With the electrification of multiple processes – vehicles, digitalization, heating and cooling – more and more activities depend on the smooth running of electricity networks.

The blackout which hit Spain and Portugal, but also parts of France and Andorra, on 28 April, for example, caused widespread disruption as public transport ground to a halt, businesses and key public services shuttered, and ATMS stopped working.

With mounting international tensions and swings in energy prices, there is a whiff of the 1970s oil crisis days. The difference today is that the world has access to new innovative solutions to boosting energy resilience.

Resilience of power systems refers to their ability to resist extreme climatic conditions such as heat waves and storms; external shocks like excessive fluctuations in market prices, changes in tariffs disturbing international trade, embargoes, financial crises, pandemics; and violence including wars, terrorism and cyberattacks.

Adaptation and response capacity of energy systems need to take such risks into account in a world often said to be in ‘polycrisis’, while also taking into account that power systems have their own intrinsic contagion mechanisms, with cascading failures across interconnected systems often identified as the primary cause of widespread blackouts.

To address these challenges, here are four ways to enhance the power system resilience.

Centralized power systems based on a limited number of large thermal power plants are more exposed to impactful interruptions. One single point of failure is a larger risk for such systems, and they bear higher costs for redundancy. The declining costs of technologies such as solar (-21% in 2024) and batteries (-40% in 2024), and the ability of sub-systems to function as microgrids, have introduced new technology options for energy resilience.

Having tested various power system configurations, with various possible locations for power plants and transmission lines, and factoring wind speed and path from the Ike and Harvey hurricanes, an Institute of Electrical and Electronics Engineers study illustrates how taking resilience into account when planning power generation and transmission, and investing in smaller energy resources that are spread over the territory, can significantly reduce load shedding.

A mix of renewable energy technologies can be used to balance the grid in most cases. Hydropower, wind power and solar photovoltaics depend on different natural cycles and are therefore subject to variations in production on different timescales. Geothermal power, bioenergy and storage bring additional synergies.

Each source of energy has its own advantages in terms of resilience and brings its own set of risks. Wind power can suffer damage from extreme weather events such as hurricanes and solar power from hailstorms, while thermal power plants, including biomass, can suffer from air strikes and weaponization, or from fuel supply chain disruptions, but will usually better resist storms, for example.

This variety of risk profiles illustrates how, especially in times of both natural and political turbulence, diversifying the electricity mix and leveraging renewables reduces the probability of losing a high share of the power generation fleet at once.

Renewables offer a cost-effective response to onshoring power generation.

In 2022, Germany averted an energy crisis triggered by the Russian invasion of Ukraine and the subsequent reduction in gas supplies by capitalizing on its growing share of green power, which contributed to maintaining energy supply and reducing price volatility in a context of booming cost of fossil fuels and accelerated diversification of suppliers.

This energy crisis also demonstrated that in an integrated market where marginal prices are set by fossil fuel-fired power plants, a higher share of renewables does not directly shield consumers from energy price spikes, as in Europe prices are often aligned on the generation cost of gas fired power plants.

Nonetheless, a higher share of renewables contributed to repatriating revenues, and it protected non-integrated markets such as Iceland’s retail market, where almost 100% of heating and electricity is renewables based.

Renewables also contribute to insulating power generation from supply chain disruptions . Wind and solar power plant projects initially need to procure turbines or panels. But, once installed, they are shielded from supply chain disruption risks for the rest of their operating lifetime. Hydropower has a comparable profile with an even longer lifespan. Conversely, biomass, coal, oil and gas-fired power plants usually have fuel reserves of a few months, while nuclear power plants can have stocks for a few years.

Emerging markets are over-exposed to external shocks and climate change impacts. It is critical for them to integrate resilience in the planning of their fast-developing power systems, and to leverage clean energy. They face a particularly acute investment challenge to improve resilience through clean energy: they need to multiply annual investment by 10 times, from $260 billion to $2.6 trillion per year in the 2030s, to reach their targets.

Such massive surge implies taping funds from all sources, and takes initiatives such as Clean Energy Finance and Investment Mobilisation (CEFIM) programme of the Organisation for Economic Co-operation and Development (OECD), which helps them unlock private finance and investment for clean energy.

What is certain, though, is that investing in clean energy will both enhance near-term resilience and contribute to climate change mitigation, hence reducing future costs.

Energy security requires the diversification of clean energy sources as well as power demand management. But as the world focuses on the need for energy security, we run the risk that other dimensions – equity and sustainability – of the energy triangle be de-prioritized.

Now a mature and cost-effective solution in most markets, clean energy has become a critical enabler of resilience thanks to its capacity to onshore generation, reduce energy dependency and distribute capacity.

It is time we acknowledge it and update the rationale for renewables and energy efficiency. Let us harness the power of clean energy, not only to mitigate climate change, but to protect our power systems and economies and build a better, more resilient, future.