As the Iran war intensifies, South Korea renewables shift accelerates
The importance of renewables not only for climate but also for economic security needs to be better understood, especially now with the Iran war escalating, analysts said.
Late last year, South Korea announced a new energy transition roadmap with an ambitious goal – 100 gigawatts of renewable capacity by 2030. Now the Iran war is accelerating those plans.
South Korea’s President Lee Jae Myung, in early March, called the ongoing conflict and its energy impacts, which has halted a significant amount of not only Korea’s but also Japan’s and Taiwan’s LNG imports, an “opportunity to swiftly and extensively transition to renewable energy.”
It’s the latest shift for a country that lags behind it peers in the OECD on clean energy, with only 6 percent of its power generation coming from wind and solar, compared to 28 percent from natural gas, mostly via imported LNG.
Korea’s renewables plan also potentially marks a break from an energy policy that has, for years, followed that of its neighbour Japan. In fact, while Korea is pushing forward on renewables, Japan, under newly re-elected Prime Minister Sanae Takaichi, is restricting mega-solar projects and accelerating nuclear restarts. It’s also touting the benefits of LNG as it seeks to expand its role as a trader, potentially supplying countries like Taiwan and Thailand.
“In Japan we don’t have any sense of crisis,” Takejiro Sueyoshi, Vice-Chair of the Executive Board at the Tokyo-based Renewable Energy Institute, told Gas Outlook. “The war, although it is an unhappy development, we should take that as an opportunity to fully go for energy transition in this country.”
According to S&P, in the short-term, Japan and Korea are not likely to feel severe impacts from the crisis, unlike countries in South Asia, as they have “relatively comfortable storage levels, reducing immediate spot market requirements.” Similarly, Taiwan’s government has stated that they have secure LNG supplies for at least 90 days.
But if the crisis continues, or other regions are impacted, that could change. Japan, Taiwan, and Korea lack any meaningful petroleum or natural gas resources and are reliant almost entirely on imports. For gas, that means LNG, and of the three countries, Taiwan is the most dependent on LNG via the Strait of Hormuz. 30% of their LNG comes from Qatar and the United Arab Emirates, compared to 6% for Korea and 14% for Japan.
According to Japan NRG, a Tokyo-based energy consultancy, “the economy is still exposed to higher import prices, shipping disruptions, and financial market spillovers.” Moreover, “rising fuel costs could feed into electricity tariffs, manufacturing costs, and inflation.”
Japan is less exposed to the war in Iran when it comes to LNG due to its intentional strategy of buying far more LNG than it needs from a diverse number of markets. In 2024, the country imported LNG from Australia, Brunei, Malaysia, Papua New Guinea, the United States, and Indonesia in addition to Qatar.
In fact, in 2024, because Japan imported so much LNG, it re-exported 40 percent of it, according to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA). That is more than all of Russia’s LNG production.
“If you listen to the government, they say that renewable energy is important, nuclear is important, and thermal power is also necessary, but in reality the priority for renewables is dropping,” Hiroshi Takahashi, a professor at Hosei University in Japan, told Gas Outlook.
Having excess contracts means paying a fixed rate well into the future, which could mean long-term dependence on LNG even as alternatives become cheaper. Japanese consumers have seen electricity rates rising since Russia’s 2022 invasion of Ukraine caused LNG prices to surge, and electricity futures are spiking again since the Iran war started.
Japan’s excess LNG could be a lifeline for other countries in the region, and Taiwan’s government has already stated that they may rely on Japanese re-exports if there are more delays in accessing Middle Eastern LNG.
Alternatives to LNG
The election of Lee Jae Myung as president last June has been a key driver of Korea’s shift. Unlike his predecessor, the now-jailed Yoon Suk Yeol, Lee has made renewables and climate change priorities of his administration.
In October, Korea created a new Ministry of Climate, Energy, and Environment and appointed its first climate minister, Kim Sung-whan. In the months since, Korea has made moves to shift away from fossil fuels, including, most recently, the creation of a new task force that, within the first six months of 2026, would release a comprehensive power grid innovation plan.
“Expanding renewable energy capacity to 100 GW by 2030 is a key government priority that supports carbon neutrality and the competitiveness of advanced industries,” said Lee Jae-sik, South Korea’s Director General for Power Grid System Policy Bureau at the Ministry of Climate, Energy, and Environment, in a press statement. “We will swiftly establish innovative power grid systems to support the stable expansion of renewable energy.”
Taiwan is the most fossil-fuel-dependent country in Asia and has rapidly grown power generation from natural gas since 2010; now it’s the East Asian nation’s largest electricity source. Despite a plan to get 20 percent of power from renewables by 2025, delays and cost challenges have limited solar and wind expansion, and so far, only 11 percent of its power comes from renewables.
Japan, meanwhile, has seen solar and wind expansion slow down in recent years. Some of that is due to supply chain issues impacting offshore wind costs, but growing opposition to mega-solar has also had an impact. The Takaichi administration, which was elected to a supermajority in the Japanese Parliament’s lower house last month, is pushing to speed up the restart of nuclear power plants. Japan has 54 nuclear reactors, but only 14 have restarted after the Great East Tohoku earthquake forced the entire fleet to shut down.
But many want to see more efforts to expand offshore wind and support rooftop and distributed solar, which could also help the country wean itself off LNG imports.
“Because of the Middle East crisis, renewables, again, should be pushed forward,” said Sueyoshi. “The supply chain for wind needs to be rebuilt, and the importance of renewables not only for climate but also for economic security needs to be better understood.”
(Writing by Nithin Coca; editing by Sophie Davies)