Renewables Offset Fossil Fuel Drop After Hormuz Disruption, CREA Analysis Shows

Global fossil fuel-based power generation fell approximately 1 per cent year-on-year in March 2026, the first full month following the Strait of Hormuz blockade, with the decline entirely offset by a 14 per cent surge in solar and 8 per cent rise in wind power, according to Centre for Research on Energy and Clean Air analysis. The findings challenge narratives of a global return to coal, as seaborne coal trade volumes fell 3 per cent to their lowest level since 2021.

CREA's near-real-time analysis covers major markets including China, the United States, the EU, and India, capturing 87 per cent of global coal power generation and over 60 per cent of gas-fired generation. Gas-fired generation fell sharply by 4 per cent, while coal generation remained broadly flat globally. Outside China, coal generation fell 3.5 per cent. China saw a modest 2 per cent increase in coastal coal generation as high gas prices prompted fuel switching, but overall Chinese coal use remained below 2024 levels. Solar and wind capacity added in 2025 alone is estimated to generate roughly 1,100 TWh annually, nearly double the output that could be produced from LNG previously transiting the Hormuz route.

India is among the countries recording the largest declines in coal-fired generation in March 2026, driven primarily by rapid solar expansion. Seaborne coal shipments to India fell 9 per cent in the month, contributing to the global trade volume decline. The Ministry of New and Renewable Energy continues to advance a 50 GW annual renewable energy procurement trajectory through FY28. India's exposure to the crisis is direct: Qatar is its largest LNG supplier, and gas-based power, while only 6.2 per cent of the 2024–25 electricity mix, serves as a peak-demand backstop that must now be replaced.

CREA lead analyst Lauri Myllyvirta said the increase in clean electricity offset the fall in gas-fired power, preventing a coal spike. The analysis suggests the Hormuz crisis is accelerating rather than reversing the global energy transition. Coal plants globally were already operating near maximum feasible capacity prior to the disruption, leaving limited room for ramp-up. Analysts note that absent structural clean energy capacity, supply shocks of this magnitude would historically have triggered emergency coal restarts, underscoring renewables' growing role as an energy security buffer.

Key figure — 1,100 TWh annual generation from solar and wind capacity added in 2025 alone