Traditional Energy Crisis and Renewable Energy Crisis
- Batuhan Baltacı
- 1 day ago
- 6 min read
What Is Energy?
Energy is a fundamental input for economic production. Every field—from industrial production to transportation, agriculture to digital technologies—requires energy. A country's level of development is largely related to its energy supply security and the cost of accessing energy.
The Strategic Importance of Energy for the Economy
Without energy, production factors (labor, capital, land) cannot be used efficiently.
Strategic input: Changes in energy prices directly affect inflation, current account deficits, economic growth, and employment.
Energy is not only an economic factor but also an element of geopolitical power. Countries with oil and natural gas reserves have an advantage in international relations.
The Rise in Global Energy Demand
Population growth: The world's population is expected to approach 10 billion by 2050.
Industry and urbanization: Especially developing countries are increasing energy consumption.
Digitalization and technology: Data centers, artificial intelligence, and electric vehicles are multiplying energy needs.
Therefore, energy demand risks growing faster than supply.
Definition of Energy Crisis
An energy crisis occurs when a country or the world faces serious problems meeting energy demand. Triggering factors include:
Supply-demand imbalance: Production capacity falling short as demand rises.
Price volatility: Sudden increases in oil and natural gas prices.
Geopolitical risks: Wars, embargoes, and energy pipeline security.
Technological and environmental factors: Inability to store renewable energy, climate crisis imposing constraints on fossil fuels.
Traditional Energy Crisis (Fossil Fuels)
Fossil Fuel Dependency
Oil, natural gas, and coal still account for more than 75% of global energy consumption.
These resources have limited reserves, and their distribution is unequal: some countries have rich reserves while most are import-dependent.
OPEC and Oil Crises
1973 Oil Crisis (First Oil Shock)
Following the Arab-Israeli (Yom Kippur) War, Arab countries imposed an oil embargo against the US and Western Europe for supporting Israel.
OPEC (Organization of Petroleum Exporting Countries) quadrupled oil prices.
Consequences:
Severe inflation and economic stagnation (stagflation) in Western countries.
Balance of payments crises in oil-importing countries.
The concept of energy security entered the global economic agenda for the first time.
1979 Oil Crisis (Second Oil Shock)
The Iranian Revolution led to decreased production and exports.
Oil prices rose sharply again.
Western economies experienced high inflation and recession once more.
Energy efficiency policies and the search for alternative energy sources accelerated.
Subsequent Periods:
1990 Gulf War: Iraq's invasion of Kuwait led to disruptions in oil supply.
2000s: Oil prices exceeding $100 created global inflationary pressure.
2022 Russia-Ukraine War: Europe's dependence on Russian gas deepened the crisis.
Economic and Political Effects
Import-dependent countries (like Turkey) were negatively affected through current account deficits, inflation, and slowed growth.
Exporting countries (OPEC members, Russia) gain foreign policy leverage through energy.
Fluctuations in fossil fuel prices also affect global financial markets.
Renewable Energy Crisis
Renewable Energy Sources
Wind energy: Widespread in Europe (especially Germany and Denmark). Concentrated in Turkey's Aegean and Marmara regions.
Solar energy: Costs have decreased, but China dominates global panel production. Prominent in Konya, Karaman, and Antalya in Turkey.
Hydroelectric: The oldest and most widespread renewable source globally. However, production decreases during drought periods.
Biomass and geothermal: Have smaller shares but add diversity. Geothermal is strong in Turkey's Aydın and Denizli regions.
Advantages:
Sustainable: No risk of depletion like fossil fuels.
Environmentally friendly: Very low carbon emissions. Critical for combating climate change.
Energy independence: Reduces dependence on imported oil/natural gas, lowers the current account deficit.
Employment and technological development: Creates new sectors (panel manufacturing, wind turbines, battery technologies).
Crisis Points
Investment Costs:
Initial investment for solar panels, wind turbines, and energy storage is very high.
Developing countries struggle to find financing.
Without credit and incentives, investments progress slowly.
Lack of Storage Technology:
Electricity production is not continuous because it depends on sun and wind.
Excess energy produced during daylight/sunny weather is wasted because it cannot be stored.
Advanced battery systems (lithium-ion, hydrogen storage) are still expensive.
Supply Security Issues:
The sun doesn't always shine, the wind doesn't always blow. This makes grid management difficult.
Fossil fuels are still needed as "backup energy sources."
Critical mineral dependency: Lithium, cobalt, nickel, and rare earth elements are required for panels, turbines, and especially batteries. A small number of countries—China, Congo, Chile, and Australia—dominate these minerals.
A new "dependency risk" is emerging, similar to fossil fuels.
According to 2025 data, the top five countries leading in renewable energy, especially solar and wind:
China
USA
India
Germany (and some other leading European countries)
Brazil (and similar emerging market countries making "mixed energy" + "renewable investments")
Economic Effects
Transition period costs: The transition from fossil to renewable energy can initially raise energy prices.
Energy price volatility: Electricity prices fluctuate from time to time due to supply security issues.
Burden of government incentives: Governments are allocating large budgets to support renewable investments. This can lead to fiscal discipline problems.
Global competition: China's dominance in technology production poses economic/strategic risks for Europe and the USA.
Current Examples
Europe: Germany was forced to reactivate coal power plants after 2022 because wind-solar production alone was insufficient.
Turkey: Renewable investments are increasing, but energy imports were still around $100 billion in 2023.
USA: The Biden administration allocated $369 billion in incentives for renewable investments through the "Inflation Reduction Act."
Current Situation
EU's 2040/2050 Net Zero Targets
The European Union officially declared its "net zero carbon" target for 2050.
Interim targets for 2040: 90% reduction in emissions compared to 1990 levels.
Energy policies for this:
Gradual reduction of fossil fuel use.
Increasing the share of renewable electricity production to 70-80%.
Carbon markets and border carbon tax applications.
Economic effects: Transformation is mandatory for EU industry—costs are rising, but long-term competitiveness is maintained.
Renewable Energy Investments in Turkey
The share of renewable energy in Turkey's total installed capacity is above 55% (2024).
By source: hydroelectric (around 30%), wind (around 12%), solar (around 10%), geothermal (in the top 5 globally).
In recent years, Konya Karapınar Solar Power Plant and wind investments in the Aegean have been prominent.
However, Turkey is still dependent on energy imports: energy imports were around $100 billion in 2023.
Renewable investments progress depending on financing and technology transfer.
Global Energy Transition
Large funds are being allocated to energy transition worldwide, led by the USA, EU, and China.
China is the global leader in solar panel and battery production (over 70% share).
The USA provided $369 billion in incentives for renewable and clean energy through the Inflation Reduction Act passed in 2022.
Problem in developing countries: High financing needs, technology dependent on foreign sources.
International Energy Agency (IEA) warning: Although the transition is accelerating, fossil fuel consumption still accounts for 75% of the world total.
Solution Proposals / Future Perspective
Diversification of the Energy Basket
Dependence on a single source is risky (e.g., Russian gas).
Countries should ensure supply security by using fossil, renewable, and nuclear energy in their energy mix.
For Turkey: Diversification with solar, wind, and nuclear (Akkuyu/Mersin) as alternatives to natural gas imports.
R&D in Renewable Technologies
Domestic panel, turbine, and battery production should be increased.
Recycling technologies for critical minerals should be developed.
Long-term investments should be made in energy storage (hydrogen, advanced batteries).
Energy Efficiency Policies
Using energy efficiently is as important as producing it.
Building insulation, smart cities, electric vehicles, and public transportation investments reduce energy consumption.
New technology investments for energy savings in the industrial sector (automation, robots, digitalization).
International Cooperation
Green energy financing: Cheap credit opportunities through the World Bank, EU funds, and carbon markets.
Carbon markets: Restrictions on high-emission sectors, incentives for low-emission ones.
Regional cooperation: Energy corridors between Europe, the Middle East, and Asia.
Turkey's compliance with the "green deal" in this process is critical.
Conclusion
Energy is one of the most fundamental inputs for economic growth and development.
Although fossil fuels have carried the world economy in the past, they have become unsustainable due to both environmental impacts (climate change) and geopolitical risks (OPEC, wars).
Renewable energy stands out as the solution for the future; however, high investment costs, storage problems, and critical mineral dependency are creating new crisis areas.
Therefore, the world faces a dual crisis today:
Short-term fossil fuel crises
Long-term transition challenges of renewable energy
The solution is a balance policy:
Diversification of the energy basket
Investment and R&D in renewable technologies
Energy efficiency policies
International cooperation
In conclusion, solving energy crises requires a global transformation process that has not only economic but also political, technological, and environmental dimensions.
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