Resilience through Renewables

Many of us have heard that renewables are ‘great, until the sun stops shining and the wind stops blowing’. Meanwhile, Gas prices have jumped nearly a dollar in the past month, and Crude oil has surged past $100 a barrel for the first time since 2022, driven by the shutdown of tanker traffic through the Strait of Hormuz, the chokepoint for roughly a fifth of the world's traded oil.

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This is the core vulnerability of a centralized, fossil fuel-dependent energy system. Even if the U.S. produces domestically;  global markets set the price and disruption in one region can spike costs everywhere. As Gregory Brew of the Eurasia Group put it, we are experiencing the largest oil supply disruption in history.

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However, countries that invested heavily in a more diverse energy mix are weathering this storm differently. Surprisingly, China, despite importing nearly half its oil from the Middle East, is better insulated than many major economies because it has spent the past two decades building out wind, solar, and electric vehicles. Renewables now account for over a third of China's electricity generation, and over half of new car sales there are electric. In contrast, the U.S. produces only 24% of its electricity from renewables, with natural gas accounting for close to 40% of production. US transportation remains almost entirely dependent on oil, with only 10% of new vehicle sales being electric. 

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All of this means that countries investing in renewables and electric vehicles are now at an advantage compared to those that are not. Diversifying energy sources reduces exposure to shocks and unpredictability for the long-term. And as electric vehicles become predominant, that stability extends to transportation costs too. 

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Once a solar array or wind turbine is built, the fuel is free for its lifetime. It doesn't require ongoing fuel to keep generating power. This makes renewable energy far more resistant to the kind of price shocks we're seeing today. And with improving battery storage, we can bank energy for when the sun isn't shining. Critically, though, renewable systems can be decentralized, generating power closer to where it is used, rather than being shipped across vulnerable supply chains or refined in a small number of facilities.

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That decentralization opens the door to local energy sovereignty. Community solar programs and locally sited wind and storage projects keep energy dollars circulating locally and put decisions about energy in the hands of the people who use it. Michigan's Renewables Ready Communities program has already channeled $30 million to over 50 communities hosting renewable projects for local infrastructure improvements. Decentralized, local, renewables mean that local people have greater say over how they travel, heat their homes, and keep the lights on.

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We can't control the Strait of Hormuz. But we can build energy systems that don't depend on it. The question for communities across Michigan, for our utility providers, and for CAFE's work ahead is how we accelerate that shift toward local, resilient, community-owned energy before the problem gets any worse.