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Two disruptions in the past few years have changed how governments think about energy. Russia’s invasion of Ukraine removed assumptions that the oil and gas pipeline supply was dependable, and disruption in the Strait of Hormuz removed assumptions that fossil fuels were a reliable default. What has emerged is not a preference for any one type of fuel but a need to have alternatives. The International Energy Agency (IEA) now frames energy security as a question of resilience, diversification and flexibility rather than simply adequate supply at affordable prices. For investors, that changes what is valuable: not the cheapest molecule or the cleanest electron, but the ability to switch between them.
What will the legacy of the energy shock be?
Every energy shock leaves a policy legacy, shaped by the weakness the shock exposed. The response to Russia’s 2022 invasion of Ukraine was to replace one supplier with another. The response to disruption in the Strait of Hormuz has been different, because it showed that fossil fuel supplies can be interrupted at a chokepoint regardless of the producer. Governments have concluded that diversifying suppliers is not the same as diversifying risk and that energy produced or generated at home carries a value that price alone does not capture. Renewables and hydrogen benefit from that reasoning, not because they are cheaper but because they are harder to interrupt from outside.
Has security overtaken cost as the main energy policy objective?
Cost still matters, but it is no longer the only test. Europe’s response to the loss of Russian pipeline gas was to buy liquefied natural gas (LNG) at a premium, on the basis that an expensive supply that arrives is worth more than a cheaper one that may not. The trade data show the result. The US now supplies 56% of EU LNG imports, against 13.9% from Russia, while the US and Norway together account for close to 30% of EU petroleum oil imports, at 15.1% and 14.4% respectively, according to Eurostat figures. This same logic is visible elsewhere. In North America, producers such as Saturn Oil position themselves on domestic reliability rather than price alone.
Can renewables provide security as well as lower emissions?
The case for renewables has acquired another supporting argument. While the climate case is unchanged, the security case is more recent and, for governments, more immediate: a domestically generated unit of electricity cannot be embargoed, rerouted or repriced by a supplier. Galata Wind (BIST) is one example of local renewable resources reducing a country’s exposure to imported fuel in Türkiye. For emerging markets in particular, developing domestic renewable resources can reduce exposure to imported fuels while strengthening the resilience of local energy systems. The scale of the wider buildout is visible in personnel employment, which grew strongly across renewables, grids and efficiency between 2020 and 2024, with solar photovoltaic technology the largest single contributor on IEA figures. The constraint is that energy generation alone does not deliver security. Storage, transmission, interconnection and grid management determine whether intermittent supply can be relied on when it is needed, and most systems remain short of all four.
Is hydrogen now an option rather than a destination?
Hydrogen was once presented as a universal replacement fuel and that description no longer holds. Its value is narrower and more practical: it can be traded internationally, it addresses industrial processes that are hard to abate and it stores energy over longer durations than batteries manage economically. Cost remains the obstacle, which is why production technology matters. HydrogenPro (XOSL) manufactures high-pressure alkaline electrolysers, which split water into hydrogen and oxygen without the rare materials some competing designs require, supporting scale-up at lower cost. Atome (AIM) illustrates the export end of the same chain. Investor interest has followed this shift in framing: an index of natural hydrogen equities tracked by the IEA roughly tripled between January 2024 and May 2026.
Does domestic supply matter more than resource abundance?
Abundance and security are not the same thing, as China demonstrates. It has built an extraordinary renewable and power generation portfolio, and it remains structurally dependent on imported oil. Domestic production of c 5mmbbld compares with consumption of c 16mmbbld, with the balance imported, and the US Energy Information Administration expects consumption to keep rising. Because most of those imports travel by sea through a small number of chokepoints, disruption such as at the Strait of Hormuz affects China more directly than its generation capacity would suggest. True optionality therefore requires more than supplier diversification: it requires diversification across the energy system itself, combining domestic production and generation with imports, storage and alternative supply routes.
Is the grid becoming the most strategic asset of all?
Electricity is where pressure is now concentrating, because demand is rising from sources that did not exist at scale a decade ago. Data centres and AI are the most visible of these, alongside electrified transport, heating and industry. The IEA expects China alone to account for c 2,600TWh of electricity demand growth between 2025 and 2030, which is more than half the global total. Meeting that demand depends less on generation than on the networks that move and balance the demand, which makes batteries, transmission and smart grids strategic infrastructure rather than supporting equipment. The emissions path follows the same division: generation emissions are forecast to fall in the EU and the US and to rise in China and India, where demand growth is fastest.
Will the next energy investment cycle reward?
The pattern is an energy market that pays for flexibility. Technology providers, grid infrastructure businesses and diversified integrated energy groups each supply a component of optionality, and the boundary between ‘old’ and ‘new’ energy is losing its usefulness as those components combine. Corporate spending is already following that logic. KPMG UK finds that energy companies have concentrated investment in efficiency and electrification, renewables, low-carbon alternatives, storage and grid infrastructure, which is a portfolio built for resilience rather than for a single outcome. The diversification of capital spending is itself significant: companies are increasingly allocating across complementary technologies rather than positioning for a single energy outcome.
Edison insight
Energy security has become one of the defining structural investment themes of the decade. Governments are no longer optimising solely for cost or for emissions; they are paying for resilience, diversification, flexibility and supply they control. We expect the next phase of the transition to be defined by energy optionality: the ability to combine domestic production, gas, renewables, hydrogen, storage and modern grids into a system that can absorb a shock without producing a crisis. In effect, governments increasingly want a credible Plan B: alternative sources and infrastructure that can step in when the primary route is disrupted. Energy security is increasingly about ensuring that Plan B is already in place before it is needed. That may create a strategic premium for assets that enable systems to switch, store, balance and source energy from multiple routes. The investment opportunity is therefore broader than any single technology. It sits with the infrastructure, and the companies, that make switching possible. More broadly, this is characteristic of megatrend investing: structural shifts create new needs that persist beyond the economic cycle. Energy security shows how those long-term forces can translate into durable investment opportunities.
Megatrends: Resource scarcity, energy transition, disruptive technologies, automation and industrial innovation
