The Acceleration Thesis: Will This Crisis Make or Break the Energy Transition?

There is a gas station in Yokohama where the price board has not been updated in three days. The attendant told a reporter it changes too fast now to bother. Next door, a small queue has formed at a charging station that was mostly empty six months ago. Two technologies, two futures, separated by a parking lot. The people in both lines are not thinking about geopolitics or the Strait of Hormuz or what the IEA director said this morning. They are thinking about getting to work. But the choice they are making, or the choice that is being made for them by price and availability, may tell us more about the next thirty years of energy than any policy paper.

Fatih Birol calls this the worst energy crisis of all time. Worse than 1973. Worse than 2022. He may be right. But there is an older question hiding inside his warning, one that history has answered before, though never the same way twice: does a crisis like this accelerate the shift away from fossil fuels, or does it entrench them?

The Pattern Nobody Talks About

Every major energy shock in the last half century left behind permanent structural change. This is not a theory. It is a ledger.

In October 1973, OPEC's oil embargo quadrupled the price of crude from roughly three dollars to twelve dollars a barrel. Within a decade, France had committed to building the most ambitious nuclear fleet in Western history. By 1990, nuclear power generated about 75 percent of French electricity, up from a negligible share before the crisis. Japan followed a similar path. Globally, nuclear capacity grew from under 100 gigawatts in the late 1970s to around 300 gigawatts by 1990. That infrastructure still produces electricity today.

The 1979 Iranian Revolution created a second oil shock. Prices doubled again. The response was different this time: fuel efficiency standards tightened across the industrialized world, North Sea oil development accelerated, and strategic petroleum reserves became a permanent feature of energy policy. The International Energy Agency itself, created in 1974 as a direct response to the first embargo, expanded its mandate.

Then 2022. Russia's invasion of Ukraine and the subsequent gas supply disruption hit Europe with a speed and severity that recalled the 1970s. European natural gas prices peaked above 300 euros per megawatt-hour. The response, again, was structural. Europe added roughly 56 gigawatts of new solar capacity in 2023 alone, nearly doubling the 33 gigawatts installed in 2022. Heat pump installations doubled year-over-year in several countries. Germany, the continent's industrial core, committed to building multiple LNG import terminals in months, a process that normally takes years.

The pattern is real. Crises produce change. But here is the question that the pattern does not answer by itself: change in which direction?

The Numbers That Were Already Moving

Before the Strait of Hormuz became a war zone, before oil crossed 150 dollars and gas prices in Asia reached levels that would have seemed fictional a year ago, the energy transition was already gathering momentum on its own terms.

Global investment in renewable energy reached 728 billion dollars in 2024, according to BloombergNEF, with solar PV investment alone exceeding 500 billion dollars per the IEA. Solar photovoltaic technology became the cheapest source of new electricity generation in most markets worldwide, a fact that passed without much fanfare because it happened gradually, auction by auction, project by project. Lithium-ion battery pack prices fell to 115 dollars per kilowatt-hour, crossing below 100 dollars for some chemistries in China. China installed over 200 gigawatts of solar capacity in 2023 alone, more than the entire rest of the world combined. Global solar manufacturing capacity exceeded 1,000 gigawatts per year by 2025.

These are not projections. They are not targets in a government plan. They are things that already happened, quietly, while the news cycle was occupied with other things. The transition was not waiting for a crisis to justify itself. It was building its own economic logic, powered by learning curves and manufacturing scale.

Does the crisis accelerate this logic, or does it scramble it?

The Case for Acceleration

There is an argument, and it is a strong one, that this crisis makes the economic case for renewables more compelling than it has ever been.

When oil costs 150 dollars a barrel and liquefied natural gas trades at prices that make industrial production uneconomic in much of Asia, every dollar invested in solar panels, wind turbines, or battery storage has a faster payback period. The arithmetic is not subtle. A solar farm that took seven years to pay for itself at old energy prices takes four years at new ones. A battery system that was marginally economic becomes highly profitable when it displaces gas generation at 80 dollars per million British thermal units.

The financial markets are reinforcing this logic. Insurance premiums for fossil fuel infrastructure transiting the Gulf have risen sharply since the Hormuz disruption began. Shipping costs for LNG cargoes have reached levels that make some contracts undeliverable at agreed prices. Institutional investors who were already moving away from fossil fuel exposure now have a fiduciary argument, not just a moral one, for accelerating their exit. The risk is no longer theoretical. It is a tanker that cannot get through a strait.

European renewable electricity generation reached nearly 48 percent of the total in 2024, up from around 40 percent just two years earlier. India's solar auction prices hit record lows. Battery storage deployment more than doubled year-over-year globally through 2023 and 2024. The infrastructure to absorb redirected capital already exists. The factories are built. The supply chains are running. The technology works.

If you wanted to design a crisis to prove the case for energy transition, you could not do much better than this one.

But that is only half the story.

The Case for Regression

Global coal demand hit a new record in 2023, reaching 8.7 billion tonnes. This happened during a period of supposed energy transition. It happened because countries that needed energy could not afford to be choosy about where it came from.

This is the counterforce that the acceleration thesis must contend with. Crises do not only create; they also panic. And panicked governments do not optimize for 2040. They optimize for next winter.

After every oil shock in history, there has been a political reflex to increase domestic fossil fuel production. In the United States, "drill baby drill" is not merely a slogan. It is a policy platform with congressional majorities. Record US oil production, which averaged 12.9 million barrels per day in 2023 and peaked above 13 million, was not an accident. It was the result of deliberate regulatory choices made in response to the same energy insecurity that theoretically favors transition.

Germany, the poster child for European energy transition, reactivated coal-fired power plants in 2022 as an emergency measure. Several Asian countries signed new long-term LNG contracts in 2023 and 2024, locking in fossil fuel dependency for decades. Japan, still scarred by Fukushima, has been slow to restart its nuclear fleet despite the obvious energy security argument.

Here is the part that the acceleration thesis tends to gloss over: new fossil fuel infrastructure does not come with a sunset clause. A new LNG terminal operates for 30 to 40 years. A new coal plant, once built, becomes someone's asset, someone's revenue stream, someone's political constituency. Decisions made under crisis duress can create fossil fuel lock-in that outlasts the crisis by a generation.

What if desperation is more powerful than optimization?

Who Is Building and Who Is Burning

The crisis does not distribute its pressure evenly. This matters more than any aggregate global trend.

China, with its vast domestic solar manufacturing capacity, its dominance of global battery production, and a renewable electricity share that now exceeds 35 percent, is partially insulated. Not immune, certainly. China still imports enormous quantities of oil. But its industrial base can produce the alternative technologies at a scale and price that no other country matches. The crisis does not threaten China's energy future in the same way it threatens Japan's or India's.

Europe has spent the years since 2022 building resilience, imperfectly and expensively, but building it nonetheless. The solar capacity added in 2022 and 2023, the LNG import terminals, the heat pump mandates have created a foundation. Europe is exposed to this crisis, but it is not starting from zero.

Then there are the countries caught in between. Japan, which imports roughly 95 percent of its oil from the Middle East. South Korea, where wind and solar still generate only about six percent of electricity. India, which has built over 200 gigawatts of renewable capacity but still generates about 70 percent of its electricity from coal and imports the vast majority of its oil. Southeast Asian nations that were just beginning to build clean energy infrastructure when the crisis arrived.

And then there is sub-Saharan Africa, which faces this crisis with minimal renewable infrastructure, no strategic petroleum reserves, and energy costs that already consumed a disproportionate share of household income before prices doubled.

The transition is not a single global story. It is dozens of local stories happening at different speeds, with different starting points, and the crisis may widen the gap between those who have built alternatives and those who have not. Countries with existing clean energy infrastructure can use the crisis as a springboard. Countries without it may find themselves more dependent on fossil fuels than they were before, not less, because the crisis forces them into emergency procurement of whatever is available at whatever price.

Does the crisis accelerate the transition, or does it accelerate the divide?

The Investability Question

Underneath the policy debates and the geopolitical analysis, there is a simpler question that may determine everything: where does the money go?

Global fossil fuel investment still exceeded one trillion dollars annually as of 2024. Oil majors like BP and Shell, which had made headline commitments to energy transition, quietly scaled back some of those commitments in 2023 and 2024, arguing that the world still needed fossil fuels for longer than their earlier plans had assumed. Green bond issuance exceeded 500 billion dollars in 2023, but it remained a fraction of total energy investment.

The IEA's Net Zero by 2050 scenario requires no new oil and gas fields beyond those already approved in 2021. The crisis seems to argue for exactly the opposite: that the world needs more oil and gas production, more quickly, to replace what has been disrupted.

But there is a counter-argument that money understands better than policy. Fossil fuel supply chains that run through chokepoints controlled by belligerent states are not just expensive. They are uninsurable, in the literal sense. When Lloyd's of London raises premiums to the point where a cargo becomes uneconomic to ship, that is not a political opinion. It is a price signal. And price signals, over time, redirect capital more reliably than any government policy.

The honest answer is that both forces are operating simultaneously. Capital is flowing toward renewables because the economics are now overwhelming. Capital is also flowing toward fossil fuels because the crisis has created a short-term supply gap that only fossil fuels can fill at the required speed. These two flows do not cancel each other out. They coexist, uncomfortably, in the same economy, in the same investment portfolio, sometimes in the same company.

And that ambiguity may be the most honest description of where the energy transition actually stands in 2026.

What History Does Not Tell Us

It is tempting to draw clean lines from 1973 to 2026. Crisis produces response. Response produces structural change. Change is permanent. The pattern holds.

But the differences between then and now are as important as the similarities.

In 1973, there was no renewable alternative at anything approaching commercial scale. The choice after the embargo was between nuclear, coal, or conservation. Today, solar electricity is cheaper than coal-fired electricity in most markets. Battery storage enables renewable energy to compete on dispatchability, a capability that simply did not exist during any previous energy crisis. The alternative technology is not a laboratory curiosity or a pilot project. It is a global industry with over a trillion dollars in cumulative investment.

In 1973, the world's energy system ran on a single dominant fuel. The crisis was a crisis within that system. In 2026, the energy system is in mid-transition, partly fossil, partly renewable, deeply interconnected, with different regions at radically different stages. A crisis in a system that is already changing is fundamentally different from a crisis in a system that has nowhere else to go.

And yet the human response to crisis has not changed as much as the technology. Fear, urgency, the pressure to do something visible and immediate, the political rewards of promising cheap energy now rather than clean energy later. These forces are the same in every era. The question is whether the economics have shifted far enough that the clean option is also the fast option, or whether fossil fuels still win the urgency argument because they are already there, already connected, already flowing.

History does not tell us the answer. It tells us that the answer depends on choices being made right now, this year, in finance ministries and boardrooms and utility planning offices, by people who may not fully understand that they are choosing between two versions of the next fifty years.

The pattern says crises produce change. The pattern does not say which kind.

The Intersection

There is still a gas station in Yokohama with a price board that changes too fast to keep up. And next to it, still, a charging station where the queue is a little longer than it was last week. Two technologies. Two assumptions about the future. Two lines of people who just want to get to work.

The acceleration thesis says the line at the charging station will keep growing until the gas station closes. The regression thesis says the gas station will still be there in thirty years, serving a world that never quite managed to leave fossil fuels behind. Both have evidence. Both have logic. Neither has certainty.

Maybe the real question is not which thesis is correct. Maybe it is simpler than that. If you were building a power plant today, right now, with this crisis burning in the background, which one would you build? The one that depends on fuel shipped through a war zone, or the one that runs on sunlight?

That question has an answer. Whether it is the answer the world actually gives is something else entirely.