One last shock

Whatever the eventual outcome of US President Donald Trump’s little excursion into Iran, one conclusion appears inevitable: the historic oil crisis of recent weeks is likely to accelerate the global shift towards renewable energy and, with it, the consolidation of China’s position as the world’s new dominant economic power.

History suggests these two trends are deeply intertwined.

American historian Alfred McCoy has argued for decades that the rise of great powers is inseparable from their command of the dominant energy system of the age. During the 18^th and 19^th centuries, coal and steam underpinned the rise of the British Empire; oil and gas powered the US’s supremacy throughout the 20^th century.

Today, the world is entering a new energy era defined by solar, wind, batteries and electrification — and China is positioning itself as the first great power of this renewable age.

In the mid‑2000s, Beijing identified green technology as a strategic industry and mobilised its industrial policy accordingly: cheap credit, export incentives and massive state‑backed manufacturing capacity.

By 2025, the International Energy Agency (IEA) estimated that China accounted for a third of all global clean energy investment — almost matching the combined spending of the US and EU. China now dominates clean energy supply chains, producing most of the world’s solar panels, batteries and electrolysers (used for producing green hydrogen), and is emerging as the largest exporter of electric vehicles.

Washington, by contrast, has been moving in the opposite direction as the Trump administration expands support for fossil fuels while rolling back climate regulations. Even with the historic Biden-era Inflation Reduction Act — one of the most ambitious industrial policy packages in modern US history — America remains more than a decade behind China in manufacturing scale, supply chain depth and long-term industrial planning.

McCoy argues that this divergence is reshaping the global balance of power. While China has invested aggressively in emerging energy technologies, the US remains constrained by political polarisation and entrenched fossil fuel interests. As a result, Washington risks surrendering the strategic dominance it enjoyed during the hydrocarbon century.

This shift echoes another historical pattern: British historian Paul Kennedy’s theory of “imperial overstretch”. Kennedy argues that great powers decline when they overextend themselves militarily while underinvesting in the domestic economic foundations that once underpinned their strength.

This was true of Britain in the early 20^th century, when it focused on maintaining a sprawling empire while the US and Germany industrialised at home.

A similar pattern is now visible in the US. Once again, it finds itself drawn into a Middle Eastern conflict that diverts political focus and consumes resources, while China remains on the sidelines and continues to invest in manufacturing capacity, advanced technologies and the energy systems of the future.

The latest energy crisis has once again exposed the fundamental vulnerability of fossil fuel dependence: economies are hostage to geopolitical shocks they cannot control.

From the 1970s oil embargoes to Russia’s 2022 invasion of Ukraine to this year’s Middle Eastern escalation, reliance on imported hydrocarbons has repeatedly proved to be a strategic liability. The IEA now warns that the effective closure of the Strait of Hormuz has triggered the largest supply disruption in the history of the global oil market, while damage to more than 40 energy assets across nine Gulf states underscores the long‑term fragility of the system.

While China has invested aggressively in emerging energy technologies, the US remains constrained by … entrenched fossil fuel interests

Renewables offer a fundamentally different proposition. While fossil fuels lock economies into volatile, import-dependent supply chains, renewables provide stable, domestically sourced energy once built.

Because renewable energy is local, it cannot be blockaded or weaponised, and its geographically dispersed design makes it far more resilient to geopolitical shocks than the centralised fossil fuel system. And while new fossil fuel reserves are increasingly costly to access, requiring ever more complex extraction technologies, the global scale-up of renewable energy continues to drive costs down, led by China’s manufacturing capacity and rapid technological innovation.

South Africa has already had a preview of what decentralised, privately driven renewable investment can achieve. In response to years of load-shedding, households and businesses have installed several gigawatts of rooftop solar — entirely without state funding — with behind-the-meter capacity now exceeding 7GW. Private rooftop solar has more than tripled in three years, while Eskom’s own renewable capacity has grown by less than 1GW. This surge in self-generation has materially reduced daytime demand on the grid and helped stabilise supply despite Eskom’s constraints.

Former Eskom CEO André de Ruyter made the same point recently. Speaking at the University of Oxford, he cautioned that South Africa’s recent period of stability is a temporary reprieve, sustained largely by the 6GW-7GW of privately financed rooftop solar installed in just 18 months — the equivalent of two large coal power stations.

However, he cautioned that this reprieve is likely to be short-lived, as Eskom’s own forecasts show a supply cliff from 2029 as coal plants retire. This leaves South Africa with a narrowing window in which to add new capacity. And, as De Ruyter argued, only renewables and battery storage can be built quickly and cheaply enough to fill that gap.

Mineral & petroleum resources minister Gwede Mantashe has argued that South Africa must accelerate domestic exploration and production of oil and gas to strengthen long-term energy security and reduce reliance on volatile global fuel markets. Yet developing these reserves would take years, require vast capital and do nothing to address the health and climate impact of continued fossil fuel dependence. It would also tether South Africa to an energy model increasingly out of step with global investment trends.

Interest in nuclear power is resurging globally, with countries such as Japan, France, the US and parts of the EU revisiting it as the conflict in the Middle East heightens energy security fears.

But nuclear remains extremely costly, slow to build and prone to major delays and cost overruns. It also can lock a country into long‑term dependence on a single foreign supplier for maintenance and components (in the case of Koeberg, it is French company Framatome). South Africa’s political fascination with nuclear therefore risks committing the country to a path that is neither financially nor strategically sound

South Africa faces a stark choice. With global energy markets in turmoil and a domestic supply cliff looming, the country must choose between doubling down on legacy systems or aligning itself with the technologies shaping the future. South Africa enjoys an abundance of sun and wind and, in a world where energy security is becoming synonymous with national security, that is surely an advantage too valuable to waste. The most rational path would be a decisive national pivot towards renewable energy — the only option that is fast, affordable and geopolitically resilient.

The broader geopolitical landscape reinforces this urgency. China has already staked its future on renewables, and through Brics South Africa can access financing, technology partnerships and manufacturing opportunities to accelerate its transition. As the global order fractures, middle powers like South Africa will need to build resilience and align themselves with the technologies and alliances of the future. Renewable energy is no longer just an environmental choice, but also a foundation of long-term energy security.

The great irony is that Trump, who campaigned on reviving fossil fuels, may ultimately be remembered as the catalyst who convinced the world that the renewable era had truly arrived.