For more than a century, fossil fuels — first coal, then oil and gas — have underpinned the global economic order. Yet the concept of a petrostate gained traction only in the 1970s, when Opec’s 1973 oil embargo exposed the West’s vulnerability to supply disruptions — elevating oil-rich nations to geopolitical prominence.
A petrostate is a country whose economy and political system are deeply reliant on the extraction and export of oil and gas. This dependence often distorts governance and heightens exposure to price volatility, rent-seeking and corruption. It is frequently linked to the “resource curse” — also known as the paradox of plenty — which is when resource-rich nations experience economic instability, institutional weakness and social inequality precisely because of their natural wealth.
While the Middle East, Russia and the US gained geopolitical clout during the age of oil, the global pivot towards electrification and clean technologies is ushering in a new cohort of geopolitical actors: the electrostates.
The term “electrostate” has emerged as a defining concept only in the past two years, as analysts tracked the rise of clean energy economies. China is widely regarded as the world’s first electrostate, due to its unparalleled dominance in clean tech exports and the electrification of its domestic economy.
It is estimated that China processes 60% of the world’s lithium and cobalt, refines more than 90% of rare earth elements, produces 80% of solar panels and leads wind turbine supply chains. Chinese companies manufacture more than half of the world’s lithium-ion batteries, and BYD recently overtook Tesla as the largest electric vehicle (EV) producer.
A recent article in Emissary, a Carnegie Endowment platform, distinguishes between two types of electrostates, each with distinct policy implications.
- Producer electrostates manufacture and export clean energy technologies such as solar panels and batteries. China, which leads global exports in every major clean tech category, is the prime example.
- Consumer electrostates, by contrast, shift domestic energy consumption from fossil fuels to electricity. Here, too, China leads, with electricity accounting for 30% of final energy consumption, surpassing the US (at 22%) and the EU (21%). (See graph)
China is both a consumer and producer electrostate. But it is possible for a country to become a consumer electrostate without building its own clean technology manufacturing capacity. Bangladesh has installed imported solar and wind technologies and now exceeds both the US and Europe in electricity’s share of final consumption (25% in 2023, according to the International Energy Agency, or IEA). Pakistan has doubled its power capacity by deploying imported Chinese solar infrastructure.
These transitions involve more than adopting new technologies or responding to the urgent (yet increasingly politicised) challenge of climate change; they are also matters of economic and geopolitical significance.
Electrification significantly improves energy efficiency, reduces exposure to fuel price volatility, supports the growth of new industries and generates three times more jobs per dollar invested than fossil fuels, according to the UK Energy Research Centre.
Unlike fossil fuel systems, which energy consultancy RMI estimates waste up to two-thirds of their energy, electric technologies convert a higher share of primary energy into usable power. EVs, for example, are three to four times more efficient than combustion engines.
By improving energy efficiency, electrification reduces long-term costs. According to the Renewable Energy Institute, renewables saved the global economy $409bn in energy costs in 2024.
Electrification also supports the growth of new industries. In 2024, clean energy added $1.9-trillion — just more than 10% of GDP — to China’s economy. Three new industries — EVs, batteries and solar — drove this surge, accounting for 75% of clean energy’s contribution. The sector grew three times faster than the broader economy, and without it, China would have missed its 5% growth target. This highlights how important electrification and decarbonisation have become.
Electrification reduces a country’s vulnerability to energy price shocks by decoupling end-use energy consumption from volatility in global fossil fuel markets. Unlike oil and gas, which are subject to geopolitical tensions, supply disruptions and speculative trading, electricity — particularly when generated from local renewable sources — offers greater price stability. Electrification thus not only lowers emissions but also enhances a country’s economic resilience.
Geopolitically, the rise of electrostates is reshaping global alliances. Saudi Arabia, long a petrostate, was the fourth-largest importer of Chinese solar in 2024 as part of its plan to electrify domestically while preserving hydrocarbons for export. India and Vietnam are also emerging as credible challengers in clean tech manufacturing, investing heavily in solar, battery and EV supply chains. Both countries offer competitive labour costs, growing domestic markets and strategic policy support.
In spite of these obvious advantages, the US remains wedded to fossil fuels. Nobel-winning economist Paul Krugman notes in a recent Substack post that “the US is in danger of being permanently overtaken by China’s technological and economic prowess”. Not only is the Trump administration “slashing support for scientific research and attacking education ... it is actively opposing progress in critical sectors”. He cites renewable energy as “the most consequential” sector for the next decade.
Rather than confronting the economic and geopolitical risks of being overtaken, the Trump administration is doubling down on fossil fuels. Recent policy reversals — such as the rollback of clean energy incentives under the One Big Beautiful Bill Act signed in July 2025 — have undermined the momentum created by former president Joe Biden’s Inflation Reduction Act. Renewable grants totalling billions have been cancelled and offshore wind projects shelved.
Meanwhile, US electricity demand is surging (after 15 years of stagnation) due to the rapid expansion of data centres powering AI, cloud computing and cryptocurrency. Against this background, even some oil executives are calling Trump’s vendetta against renewable energy shortsighted. As one energy analyst notes, amid concerns about resource adequacy in the face of growing electricity demand, all technologies should be on the table — and the ones that can be built fastest are wind, solar and batteries.
According to a recent report by UK energy think-tank Ember, energy is no longer a finite commodity but has become a manufactured technology. In early 2025, for the first time, wind and solar farms generated more electricity than coal. This marked a turning point in the global power system as renewables outpaced rising demand during the first half of 2025, triggering a modest decline in coal and gas use.
Unlike fossil fuels, these technologies become cheaper as they scale; each additional megawatt installed drives future costs lower. The cost of solar power has fallen by more than 90% in a decade. The IEA estimates that 91% of new renewable projects commissioned last year produced electricity at a lower cost than the cheapest fossil fuel alternative.
South Africa now faces a critical choice as the electrostate era fundamentally shifts global power dynamics. While its Brics alignment includes traditional petrostates such as Russia and Saudi Arabia, it also partners with China, the world’s first electrostate.
While South Africa is not a classic petrostate, its deep reliance on coal exposes it to similar risks, including external price shocks and environmental liabilities. The current environment of electricity shortages, high tariffs and unreliable supply are all symptoms of an energy system structured around scarcity.
Yet the country holds immense potential. With abundant solar and wind resources, a skilled technical workforce and a legacy industrial base, South Africa is well positioned to reindustrialise through electrification. Clean energy deployment can drive job creation, reduce production costs and improve quality of life, especially in underserved regions. The challenge lies in overcoming infrastructure bottlenecks and political inertia.
Becoming an electrostate is not just about decarbonisation. For South Africa it has to be an economic strategy. It’s about building resilience, sharpening global competitiveness and ensuring relevance in a world where energy is no longer extracted but engineered.
The emergence of electrostates offers South Africa a real opportunity. The question is: will it act or be left behind?
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