Europe's Geopolitical Greenprint: How Two Crises Rewired a Continent's Energy System
Wind and Solar Have Overtaken Fossil Fuels in Europe. The Reason Is Geopolitical.
In January 2026, Ember published its annual European Electricity Review with a headline that would have been unthinkable five years ago: wind and solar generated more of the EU's electricity than fossil fuels for the first time on record. The two sources provided 30% of the bloc's power, edging past coal and gas combined at 29%.
That milestone didn't happen because of climate ambition alone, it happened because a war forced Europe's hand, and the response, once reactive and panicked, has become structural and irreversible.
The Russia Ratchet
In 2021, the EU imported 155 billion cubic metres of Russian pipeline gas, roughly 45% of its total supply. When Russia invaded Ukraine in February 2022, Europe faced the most acute energy security crisis since the 1970s oil embargo. Gas prices spiked to record highs. Governments scrambled to keep the lights on.
The policy response was fast and far-reaching with the European Commission launching REPowerEU in May 2022, raising the bloc's 2030 renewable target from 40% to 42.5% with an ambition to reach 45%. Investment followed, the EU poured $627 billion into energy transition across 2022 and 2023 alone, covering renewables, storage, grid infrastructure, and electrified transport.
The results, Russian gas imports collapsed from $16 billion per month in early 2022 to roughly $1 billion per month by the end of 2023. The EU's solar and wind production saved an estimated 70 billion cubic metres of gas worth $99 billion with solar producing more power than coal for the first time in EU history.
None of that capacity is going back, renewables reached 48% of all EU electricity by the end of 2025 and they will only gain market share from here. Every gigawatt of wind and solar installed during the crisis is still producing power, still displacing gas, still reducing Europe's exposure to the next supply shock.
The Iran Test
Now the Iran shock. US and Israeli military strikes on Iran havedisrupted roughly 20% of global oil supplies passing through the Strait of Hormuz, brent crude has surged from $60 to $112 per barrel today. Qatari LNG shipments, a critical replacement source after Europe weaned itself off Russian gas, has been suspended.
The timing is brutal, European gas storage had already fallen to 30% capacity following a harsh winter, among the lowest levels since the 2022 crisis. TTF gas benchmarks nearly doubled to over €60/MWh. Daily storage injections are expected to reach just 34 million cubic metres per day in April 2026, a 77% decline compared to last year.
But here's what's different this time: Europe's renewable infrastructure is meaningfully larger than it was in 2022. And the countries that invested most aggressively in domestic clean generation are the ones least exposed to the shock.
The Iberian Proof Case
Portugal and Spain offer the clearest example. Since the onset of the Iran conflict, Spain has been among the European nations least affected by rising electricity prices. The reason is straightforward: when renewable generation sets the wholesale price, the price reflects solar and wind economics rather than imported gas.
Portugal generated over 70% of its electricity from renewables in 2023. Its wholesale power prices have remained among the lowest in the EU throughout the current crisis. While gas-dependent economies are absorbing the shock through emergency subsidies and VAT cuts, Portugal's electricity consumers are largely insulated by infrastructure that was built over the past decade.
The Numbers That Matter
The structural momentum behind this transition has reached a scale that's worth stating plainly.
In the United States, the EIA projects that 99% of new electricity generating capacity added in 2026 will be solar, wind, and battery storage. Out of 86 GW planned, solar accounts for 51%, battery storage for 28%, and wind for 14%. Battery storage capacity is jumping from 15 GW added in 2025 to 24 GW this year.
In Europe, the EU's battery fleet has grown tenfold since 2021, from 7.8 GWh to 77.3 GWh. Battery costs have fallen to roughly $117 per kilowatt-hour, less than a third of 2023 levels. The EU Grid Package, launched this year, is mobilising €1.4 trillion in grid infrastructure investment, with Portugal named in three of eight priority projects.
What This Means for Investors
Every geopolitical energy shock since 2022 has accelerated the same structural trend: more renewable capacity, more battery storage, less dependence on imported fossil fuels. Directionally clear, the pace is increasing, with the economics now at a point where new solar and storage assets are the cheapest form of electricity generation in most markets.
At Tejo Ventures, this is the thesis behind Solar Future Fund 3. We invest in solar generation and battery storage infrastructure on the Iberian Peninsula because the region sits at the intersection of Europe's highest solar irradiance, its strongest renewable policy framework, and a structural need for storage that both governments are actively incentivising.
The current crisis is painful for gas-dependent economies, for investors positioned in domestic renewable infrastructure, it's a reminder of why the thesis works.