BRICS Embraces Renewable Energy Amid Systemic Economic Risks
The BRICS Summit in New Delhi last month set out new positions on energy security, clean technology cooperation, and global governance reform. The New Delhi Declaration adopted by all members reflects a shift in how they define energy security.
The document highlights the need to close the gap between renewable capacity and grid infrastructure, as BRICS members account for 49.5% of the world's population, around 40% of global GDP, and 26% of global trade. They are scaling up renewable energy rapidly, but fossil fuels remain embedded in their economies.
The West Asia conflict has disrupted energy flows through the Strait of Hormuz, leading to a significant increase in costs for seaborne crude oil, oil products, and liquefied natural gas (LNG). BRICS importers bore a substantial share of these costs, with China and India alone accounting for $35 billion and $22 billion, respectively.
The effects extend beyond energy markets, contributing to inflation, borrowing costs, currency stress, and weaker investment conditions. To mitigate this, the economics favor shifting to renewables, as solar module prices have halved and battery prices have fallen by 36% since 2022.