Ongoing strikes on Iran will accelerate the global transition to renewable energy from fossil fuels, according to the chief of California’s lead energy policy and planning agency, who is in Australia this week for meetings with industry and political leaders.
Energy prices have spiked since the United States and Israel launched their attack, and Iranian retaliation closed the Strait of Hormuz, through which about a quarter of the world’s oil and a fifth of the world’s gas is shipped. While this will cause fossil fuel profits to surge in the short term, David Hochschild, chair of the California Energy Commission, believes it will drive nations to ramp up their efforts to achieve energy security by ramping up deployment of renewables, just as it did after Russia’s attack on Ukraine.
Hochschild said this was an unintended consequence of the war launched by Trump, who domestically is focused on derailing the energy transition.
“I think what’s going on now [is that] his mistakes in foreign policy are starting to cancel out his mistakes in energy policy, or compound them.
“The volatility that we’re seeing in fossil fuel projects around the world because of this war in Iran is yet another argument for renewable energy. Nations can insulate themselves from these price shocks that we’re seeing by going electric and going towards renewables because there is no cost for wind and for sunlight and for geothermal heat, [and] you don’t subject yourself to the volatility of fossil fuel markets,” said Hochschild, who described Trump’s administration as a “wholly owned subsidiary of the fossil fuel industry”.
Hochschild, who will deliver a keynote speech at Climate Action Week Sydney on Monday along with federal Climate Change and Energy Minister Chris Bowen and NSW Environment Minister Penny Sharpe, said Trump was the most hostile president to climate action in US history, having dumped Biden-era subsidies to renewable energy technologies and sought to end construction on near-complete offshore wind projects.
He said US energy policy was now being drafted by the most extreme elements of the fossil fuel industry, noting that Trump had told a group of oil company executives they should donate $US1 billion to his campaign because in office he would roll back environmental laws restricting the industry.
Hochschild said that while the administration was hampering renewables deployment in the US, critical authority lay with states, many of which, like California, were still focused on the transition. He said that California’s economy had rapidly expanded as its transition progressed.
“Twelve years ago we were the 10th-largest economy in the world … We are now the fourth-largest economy in the world and we’re at 70 per cent of our electricity on the grid coming from clean energy sources like solar and wind. We have more EV charging plugs than we have gasoline nozzles.”
Since Russia’s full-scale invasion of Ukraine created an energy crisis, China has hugely ramped up its renewables, deploying 88GW worth of solar in 2022, 217GW in 2023 and 277GW in 2024. Combined with its deployment of wind power, it has built the equivalent of the entire capacity of the US grid in renewables alone in that period. Observers view China as seeking to at once dominate future industries while cutting itself free of vulnerable foreign energy supplies.
Last week the Chinese military published five key lessons of the assault of Iran, the fifth of which was that the “ultimate reliance” was “self-reliance”.
Hochschild, who was appointed by California’s Democratic governor Gavin Newsom, said his message to Australian policymakers would be that the green transition served as an engine of both economic and energy security.
The conference will feature the launch of a program based on a Californian initiative to direct seed funding for three Australian start-ups to each receive $A50,000 to test their clean energy technologies at Australian tertiary, government and private research institutions at no cost to them, no requirement to find matched private investment, and no IP claims.
Bowen said that Australia’s deployment renewables had absorbed some of the shock of international energy price volatility.
“This is energy that isn’t priced by global fossil fuel markets – and that helps better protect Australians from exactly this kind of shock.
“Our focus has been on building Australia’s energy resilience and security. We’ve massively ramped up renewable energy – solar, wind and batteries, taking advantage of our abundant and cheap natural resources.”
On Sunday this masthead reported that funding for the transition would be curbed in the May budget, despite warnings the nation may not meet its target to reach 82 per cent green energy by 2030.
“The law that Governor Newsom signed requires us to reach 90 per cent clean energy by 2035 and 100 per cent by 2045. We are absolutely on a path to do just that,” Hochschild said. “Last year 96 per cent of new additions to the US electric grid were clean energy, and 96 per cent of retirements were fossil fuel-based.”
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Nick O’Malley is National Environment and Climate Editor for The Sydney Morning Herald and The Age. He is also a senior writer and a former US correspondent.Connect via email.
