How the Strait of Hormuz standoff flipped the energy security debate

HELSINKI, Finland — Iran’s influence over the strategically vital Strait of Hormuz has inadvertently transformed the energy security debate, effectively casting fossil fuels rather than renewables as the primary source of vulnerability.

For decades, the conventional narrative has been one in which renewables were criticized for their intermittency issues and dependence on weather conditions, whereas technologies such as coal, oil, and gas were seen as providing security.

The Middle East conflict and protracted closure of the Strait of Hormuz, a waterway that typically handles around 20% of the world’s global oil and liquefied natural gas supplies, have reframed this debate, however, laying bare the risks associated with fragile fossil fuel supply chains.

Energy experts and the CEOs of Nordic energy giants Fortum and Statkraft made this point clear on the sidelines of the Eurelectric Power Summit in the Finnish capital this week.

“I mean, the big mantras, and I’m surprised we haven’t heard people talking about this yet, is that fossil fuels are now intermittent and uncertain, which, of course, was the argument levelled against renewables,” Kingsmill Bond, energy strategist at U.K.-based think tank Ember, told CNBC in Helsinki.

“Renewables, thanks to batteries, have become actually pretty constant given the sun rises every morning. So, look I think we have moved to a new environment and … we are still far too exposed to the old system – and we need to change, particularly in Europe, we need to change really quickly.”

Bond said the current energy shock marks the first time in history where policymakers have a superior alternative technology to turn to for security, comparing the situation today to the 1973 and 1979 oil crises.

“If you go back to the 1970s, what did we do? We built nuclear, but that took 10 years and it was expensive. This time round, we’ve got solar and wind, batteries and electrification and lots of flexible technologies, which are huge and cheap and we can scale them. And that’s what’s happening,” Bond said.

The U.S. and Israeli-led war against Iran has rattled global energy markets and triggered widespread inflation fears, with Asia’s reliance on imported energy sitting at the forefront of the global fossil fuel crisis.

Supply disruptions have also hit hard in Europe and Africa, where countries are responding to rising fuel costs and a considerable threat to food security. With no imminent reopening of the Strait of Hormuz in sight, the situation has prompted many to reflect on the extent to which the world remains deeply reliant on fossil fuel trade routes.

Asked about intermittency concerns regarding imported fossil fuels, Fortum CEO Markus Rauramo said, “It’s a different kind of intermittency but absolutely. So,…