Journal of Environmental and Natural Resource Economics

Journal of Environmental and Natural Resource Economics

A Policy Framework for Renewable Energy Transition towards Energy Resilience in Times of Crisis

Document Type : Short Communication

Author
sepideh abedi
Department of Energy Systems Engineering, Faculty of Mechanical and Energy Engineering, Shahid Beheshti University, Tehran, Iran
10.22054/eenr.2026.95281.243
Abstract
Abstract
Introduction
Energy resilience in industry is a key pillar of economic growth and national security, particularly as recent geopolitical conflicts in Europe and the Middle East highlight the vulnerability of relying heavily on imported or concentrated fossil fuel supply chains. Geopolitical shocks, such as the Russian gas crisis, have demonstrated that heavy industrial reliance on single energy sources can lead to price spikes, supply disruptions, and threat of deindustrialization, prompting policy responses like the European Union’s REPowerEU initiative to phase out Russian fossil fuels by 2027. However, transitioning to renewable energy introduces new challenges, including high upfront investments in grid modernization estimated to exceed €1.2 trillion in Europe by 2040 to handle variable renewable output and new geopolitical dependencies on critical raw materials like lithium and cobalt. While global experiences from Europe (centralized diversification), Ukraine (decentralized microgrids as tools for wartime survival), South Korea (hydrogen roadmaps), and the Gulf states (gradual multi-carrier integration) offer valuable pathways, they highlight that clean energy transition must be strategic and linked to structural resilience, network flexibility, and security of supply rather than just meeting environmental targets.
Problem Statement
The central problem is that Iran’s industrial sector faces severe energy vulnerability and production losses due to structural imbalances in its energy system, high fuel concentration, and exposure to geopolitical and climate stresses. Systemic reliance on natural gas for power generation, which is heavily exposed to seasonal imbalances and upstream underinvestment, leads to frequent industrial blackouts, while high energy intensity, subsidized pricing, and a lack of demand-side efficiency incentives exacerbate the supply-demand gap. Furthermore, this fragility is compounded by an aging, underfunded transmission network and a tightening water-energy-climate nexus, where severe water scarcity directly compromises thermal power plant efficiency. Although Iran possesses vast solar and wind potential, institutional barriers, pricing inefficiencies, technology constraints, and financial sanctions prevent this capacity from being realized, creating a critical gap between clean energy potential and actual system resilience.
Analysis and Key Findings
A comparative analysis reveals that structural energy crises in resource-rich nations like Iran require a fundamental shift from expanding fossil-fuel capacity to building systemic, decentralized flexibility. Global cases show that under crisis conditions, decentralized energy resources and microgrids function not merely as decarbonization tools but as vital national security assets that sustain critical infrastructure and industrial operations when centralized grids fail. Furthermore, the analysis of Iran’s energy system indicates that the country’s severe natural gas deficit is a structural rather than a capacity problem, driven by artificial demand from low energy tariffs, grid transmission losses, and water scarcity that degrades thermal plant performance. Transitioning to renewables under international sanctions necessitates a localized, capital-efficient strategy; rather than relying on mega-projects dependent on foreign technology, the optimal path involves leveraging domestic solar-thermal capabilities, co-generating energy within industrial symbiosis networks, and reforming industrial tariffs to incentivize private self-generation and storage.
Policy Recommendations
To bridge these gaps, Iran must shift from a supply-expansion paradigm to a system-resilience logic through a phased policy framework. This framework requires diversifying the fuel mix to reduce gas dependency, shifting toward decentralized power generation (such as industrial microgrids and rooftop solar) to ensure local energy security during crises, and implementing demand-side reforms to curb high energy intensity through industrial efficiency standards. Additionally, public and private investments must prioritize grid modernization, energy storage systems, and smart grid technologies to handle variable renewables, all executed through a realistic, phased roadmap addressing urgent grid bottlenecks and domestic solar deployment in the short term, scaling storage and market reforms in the medium term, and establishing a fully diversified, resilient energy governance structure in the long term.
Keywords
Keywords: Energy Resilience
Industrial Energy Security
Geopolitical Risk
Renewable Energy Transition
Water-Energy-Environment Nexus
Subjects
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Journal of Environmental and Natural Resource Economics
Volume 5, Issue 14
Autumn 2025
Pages 61-83

  • Receive Date 23 August 2026
  • Revise Date 31 August 2026
  • Accept Date 31 August 2026