In a world of polarised politics and with a shift from globalisation to national self-interest, energy resilience is a growing concern for governments. Securing stable supply requires managing considerations such as where a country’s fuel is sourced, how energy is stored and distributed, and how the system is protected from attack.
Several events this decade have shown that planning has not been sufficiently strategic. Russia’s invasion of Ukraine hit global fossil fuel prices as importers of the aggressor’s products scrambled to find alternative sources and supply was disrupted. Europe, which in 2022 reached a record high fuel import dependency of 62.5 per cent according to Eurostat data, suffered significant price increases.
A major power blackout in Spain and Portugal in April 2025 highlighted inadequacies in electricity grids in Europe. The bloc is not alone in having creaking infrastructure. In North America, too, much of the electricity grid is 40 or more years old. Not only is this frequently beyond design life, it is also unfit for the changing nature of demand and supply.
With a rise in renewable generation, sources have become more dispersed and in some cases electricity supplies are less stable than that provided by large capacity fossil fuel or nuclear plants. Meanwhile, demand has been rising as economies electrify in pursuit of climate goals. The rapid spread of data centres to support artificial intelligence technologies and the need for more air-conditioning in a warming climate have added to the pressure.
The shift away from relying on piped Russian gas in Europe to shipped liquefied natural gas has strengthened the continent’s energy security. But it has also created infrastructure challenges, as new facilities must be rolled out to facilitate reception and distribution.
Threats to security have been rising as systems have become more digitalised. In 2023 alone, more than 200 reported cyber attacks targeted the energy sector, with more than half of these directed at Europe according to the European Union Agency for Cybersecurity.
European officials have warned about the increasing danger of physical attacks on energy infrastructure, citing the sabotage of the Nord Stream pipelines in 2022 and severing of gas and power cables between Estonia and Finland in 2023 and 2024.
Fossil fuel importers are not the only nations to have faced disruption from shocks. The global oil price crash which ran from 2014 to 2016 saw prices contract from $100 per barrel to around $30 as US shale production ramped up and OPEC shifted policy from price control to market share stabilisation, causing turmoil in oil exporting countries.
Ensuring a stable and resilient fuel and energy mix and reliable infrastructure secure against cyber and physical attacks, as well as climate-related events, are all factors that need to be addressed when building a system that can withstand shocks.
Diversification of sources
• Geographical
Energy politics have moved centre stage since Russia’s full-scale invasion of Ukraine in February 2022. With the US self-sufficient in energy, Europe offers the starkest cautionary tale for importers overdependent on a major supplier.
In 2021, before the war broke out, the EU relied on Russia for between two-fifths and half of its total natural gas imports, or 150bn cubic metres, according to European Commission data, with little contingency in place for any disruption in that supply. Russia was also the bloc’s largest supplier of crude oil, at just over a quarter of total imports, and hard coal (46 per cent). Germany was among the most dependent of the large economies, with external reliance of just over two-thirds for all its fuel needs and 55 per cent of its gas supplied by Russia.
The invasion and continuing conflict has pushed Europe to find alternatives. These came at significant cost in the short term as prices jumped and required investment in new facilities. US LNG suppliers, whose gas cargoes are more freely traded than those of countries with long-term commitments such as Australia and Qatar, stepped into the gap.
“The US LNG export industry was uniquely positioned to respond to this crisis because it is a market which has so-called destination flexibility. When an LNG cargo leaves the United States it does not have to land at its contracted buying entity, it can be traded or sent somewhere else,” says Joseph Majkut, director of the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS). He sees the market’s ability to respond so rapidly to Europe’s need as a sign of the resilience of the energy system.
The ability to deal with any energy challenge might be evaluated in a similar way, he says. “Do you have a flexible market? Do you have the ability to trade [and] provide the infrastructure that allows for that trade, and do you have market structures that allow for that dynamism?” Market dynamics, he says, were more effective than any government directive.
The side-effect, however, was that costs surged. EU buyers paid $41 per million British thermal units, more than twice as much as Japan ($18) and multiples of the price in the US ($6.50). LNG needs different infrastructure to the piped gas supplied by Russia and is more expensive to ship to customers than pipeline supplies. But establishing a more diverse slate of suppliers builds the continent’s energy resilience and is a better long-term solution.
The shift away from Russia and move towards such a varied supplier base by Europe has been largely successful. By 2023, Norway accounted for 30 per cent of the EU’s gas imports, up from about 20 per cent in 2021, and the US for 19 per cent. By 2025, oil imports from Russia dropped to below 3 per cent, but Russian gas still accounts for 13 per cent of imports due to some member countries’ heavy reliance, leaving the EU exposed to trade and energy security risks. As of October 2025, the bloc has a road map to reduce its dependence on Russia entirely, with a ban on Russian imports to apply from January 1 2026, although there is some flexibility for longer-term contracts out to January 1 2028.
The bloc also has some reliance on Russia for nuclear energy, as several member states have Russian-designed reactors which need Russian fuel, while others source materials or spare parts from the country. This could be harder to replace. Russia accounts for nearly a quarter of uranium conversion and enrichment services and other companies are unlikely to be able to increase capacity until 2027 at the earliest.
There are moves in Europe and the US to speed up testing and licensing of alternatives to Russian nuclear fuels. Ukraine signed a deal with the Pennsylvania-based nuclear company Westinghouse in 2022 to end its reliance on Russian fuel. The US government plans to ban all imports of Russian nuclear fuel from 2028 and is co-funding efforts to build its own supply chain.
While the EU’s energy mix is now more varied, it has become much more reliant on the US. “Energy security in Europe — and globally — now rests on US natural gas exports,” a report from the CSIS noted in 2023. The unpredictable nature of the current US administration’s trade policies and its willingness to use energy as a bargaining chip in negotiations is a concern for many European policymakers.
Majkut says: “I don’t think we quite know yet whether or not that is going to change how energy ministers and security thinkers around the world consider US exports. Whether they’ll see them as more or less reliable because they’re tied to these larger political negotiations. The jury’s probably out on that front.” However, he adds that we are “in an age of intervention” and the active export promotion of the US administration is likely to change the relationship of its energy industry with the rest of the world, although it remains unclear in what way.
At the very least, the bloc’s overall supply picture now looks more diversified.
• Fuel
The global mix of energy sources is changing as governments and industry seek to reduce their reliance on fossil fuels and slow the effects of climate change.
Oil’s share of total energy demand fell below 30 per cent for the first time ever in 2024, according to the International Energy Agency. The organisation predicts coal demand is at or close to its peak, with oil set to follow around 2030 and gas in 2035 unless governments abandon their “stated policies”.
The rollout of renewables has gathered pace. The IEA says renewables contributed 38 per cent of the growth in global energy supply in 2024 and about a third of global electricity generation. Renewables make sense not only from a climate change perspective but also from the standpoint of energy security. Renewable capacity tends to come from sources available within a country’s own borders, increasing self-sufficiency in energy supply. Lower dependency on fossil fuels reduces exposure to big price increases such as those frequently experienced historically with conflict in the Middle East or more recently due to the war in Ukraine.
Gas is considered a transition fuel in the path to net zero — less dirty than coal and oil and an acceptable bridge fuel until enough zero carbon energy sources can be rolled out to provide stable and reliable power. It had the strongest absolute demand growth among fossil fuels in 2024, at 2.7 per cent.
The evolution of fracking technologies over the past two decades, a method of extracting oil and gas from underground rock formations such as shale, made the US the world’s largest producer of natural gas, accounting for about 22 per cent of global output. Russia is the second-largest producer, at around 12 per cent of output.
Exports of LNG, a form of natural gas for which the US is the world’s largest exporter, are set to expand by about 300bn cubic metres per year by 2030, primarily from US and Qatar facilities. This could loosen up the market, reduce prices and add to the appeal of LNG.
By the end of 2030, the IEA believes that based on current projects the US could account for about one-third of global LNG supply, up from 20 per cent in 2024. This would be good news for the EU, for instance, which has been investing in LNG import facilities for reception of US gas. Although, some analysts warn that if the bloc replaces its previous heavy reliance on Russian pipeline gas by buying US gas, it could leave it too dependent on America.
However, since the war in Ukraine the EU has made considerable progress in reducing its reliance on gas — an indicator of how much a mix can change out of necessity. According to the European Commission the bloc has saved 60bn cubic metres in gas between 2022 and 2024 from renewable deployment and energy efficiency. This fall in gas has also been accompanied by a reduction in the use of coal and oil, helping the EU towards its target of climate neutrality by 2050.
A similar trend is occurring in China, where its government has pushed ahead with the rapid deployment of renewable energy, reducing its reliance on imports of imported oil and gas and boosting energy security. The country has become the world leader in solar, wind and hydroelectric power over the past decade. In 2024 alone China installed about 278GW of solar capacity, which was more than the entire solar capacity installed in the US at the time.
The UK is also a net importer of energy, relying on external sources for nearly half of its gas and oil products and almost all of its wood pellets. In 2024 alone, the cost of generating electricity in the UK using gas rose by a third, according to Ember. The global energy think-tank also says that the UK’s biomass imports are considerable and a further unpredictable expense.
While a shift to renewables can help, the Green Alliance, a UK-based think-tank, believes energy resilience is best achieved by tapping diversified sources rather than relying solely on UK renewable sources. Issues that might put pressure on an economy powered by renewables, such as so-called wind drought, can be resolved by more storage and greater connectivity, but resilience requires a multipronged approach. It recommends measures including more investment in energy efficiency, a topic we cover in more detail under demand side policies, working to enhance and expand its energy allegiances and encouraging an industrial strategy to develop the nation’s own clean energy technologies and component manufacturing.
The British Energy Security Strategy introduced in 2022 focused on domestically produced oil and gas, hydrogen and electricity to move the country towards independence — which would lead to energy security and reliability along with lower costs. It is important to note that Britain, which like many other nations is dependent on imports for critical raw materials, is unlikely to ever be fully independent, but security and resilience can be achieved through diversification.
Nuclear power can offer another source for diversification. In the US and Europe there is a strong political push to build fleets of large scale reactors and embrace a new generation of small modular reactors, which may be easier to deploy. But the sector must overcome multiple challenges, including workforce shortages, complex construction that can lead to cost overruns and delays and public opposition over safety concerns.
The nuclear industry underwent sharp contractions following accidents in Chernobyl, Ukraine, in 1986 and Fukushima, Japan, in 2011.
The Fukushima disaster, which was caused by an earthquake and tsunami, caused a major energy security crisis in Japan, which relied on nuclear energy to supply almost a third of its electricity. In the immediate aftermath of the nuclear meltdown at the Fukushima Daiichi nuclear power plant, Japanese authorities took all 54 of its nuclear reactor fleet offline for safety checks.
Some 14 nuclear plants have since restarted and 11 reactors are currently in the process of restart approval, according to the World Nuclear Association.
Infrastructure challenges
While diversifying the generation base, the shift to increased electricity generation from renewables is not without issues. The sources of power may lie within a country’s borders, but the equipment is more often than not imported. More than three-quarters of solar panels, for instance, are made in China. Vietnam and Malaysia are far smaller alternatives — and some of their major facilities are backed by Chinese capital. China also leads in wind turbines, although companies in the US and Germany, for instance, have some expertise in component manufacture.
China also leads on supply chains for rare earths and many critical minerals, which are essential components in the powerful magnets required to make wind turbines, batteries for energy storage systems and electric vehicles and solar.
Grid inadequacies are another significant issue. To reach national goals on electricity demand and renewable generation worldwide, the IEA said in 2023, 80mn kilometres of grids would need to be added or refurbished by 2040 — “the equivalent of the entire existing global grid”.
Renewable distribution adds challenges for developed market grids already suffering from age and under-investment. In 2023, the EU said that by 2050, renewable integration into the grid would require up to seven times more flexibility — meaning it would need to cope with far greater variations in supply and demand matches given fluctuating sources such as wind and solar.
The blackout across the Iberian peninsula in April 2025 highlighted the pressing need for investment in Europe’s grid, which is ageing and increasingly outdated even for current distribution needs. With renewable generation sources more dispersed and numerous, more extensive networks are required, with more connectors — several fields of solar panels might be required to generate as much as one coal-fired power station, for instance, requiring more connectors to feed their power into the grid.
The EU’s 2023 Action Plan for Grids says that this lack of connectors and grid capacity has caused a severe bottleneck in the building out of renewable projects — in some countries it might mean waiting until 2032 for distributed system operators to be connected to the grid.
According to the Centre for European Reform, the grid also needs one-third more interconnectors to allow renewable energy to flow from windy or sunny areas and help the bloc advance its overall transition. The barriers are more political than practical — countries such as Norway with abundant cheap energy have seen price rises as the country exports more to high-priced neighbours — but better mechanisms for evening out pricing via a more consolidated approach across the bloc could alleviate such concerns. The commission says in its action plan that an annual €6bn investment in cross-border capacity and storage could reduce generation costs by €9bn annually until 2040.
Europe’s grid not only needs upgrading, it needs expanding. A June 2024 report by Compass Lexecon and Current Europe looked at seven countries in Europe, including the UK, which account for 70 per cent of the EU27 and UK total electricity demand. It found that transmission grids might need to be expanded by 20 to 50 per cent to a total length of 600,000 to 800,000 kilometres, and distribution grids by 20 to 65 per cent to 12.4mn to 17mn km to integrate 2,000 gigawatts of renewables, five times the generating capacity of 2024. What is more, this build-out needed to happen three to 20 times faster than at previous rates. It estimates a required investment of €2tn in transmission and distribution networks combined by 2040.
The report offered some solutions to hasten the process and lower the cost. Retroactively installing innovative grid technologies such as sensors and power flow control devices could help to improve the efficiency of current infrastructure, increasing existing capacity by between 20 and 40 per cent, or adding approximately 100GW-200GW to the 400GW of capacity in 2023. Studies in Europe showed that advanced conductors could double a line’s capacity, while high temperature superconductors could increase capacity as much as 10-fold compared with conventional lines.
Integrating new technology into new grids would also help to add capacity more quickly and reduce the required expansion by as much as 35 per cent, potentially saving gross investment of €700bn (before costs of the technologies are considered).
For its part, the European Commission estimates that to cope with forecast increases in power demand the region’s grids will need just €584bn in investment this decade to make distribution digitalised, monitored in real time, remotely controllable and cyber secure.
Europe is not the only place that has dragged its heels on energy infrastructure. In the US, the average age of the grid is upwards of 40 years and increasingly unfit for a warming climate and meeting a surge in power demand from AI technologies.
Under-investment, for instance in solutions such as undergrounding of cables, makes regions such as California more vulnerable to wildfires and supply disruptions. The University of Wisconsin-Madison says that the US grid is at a “critical juncture”, with much of its infrastructure built 50 to 70 years ago for a country that looked quite different in terms of energy supply and demand. This results in problems such as frequent outages, high maintenance costs, inefficiency and cyber security risks. Like Europe, the US grid is not only old, it also needs expansion. The European Commission report on grids said that the US estimates it needs to expand its electricity transmission systems by 60 per cent.
Storage facilities must also be expanded as part of the upgrades to provide the increased flexibility required by renewable generation and ensure stable supply. The World Economic Forum said in 2024 that the global energy storage market was estimated to be about 360 gigawatt-hours. This was primarily pumped hydro and compressed air — but the growth between 2015 and 2024 was all driven by new battery installations.
Renewable facilities with attached storage are helping to drive this demand as they become more common, says Majkut at the CSIS. “You can then spread out the power that that entity produces and you can benefit from different financial arrangements by smoothing the so-called duck curve — where solar peaks during the day but load peaks at another time.” He says that many analyses focus on gas to satisfy demand growth for data centres and electric vehicles, but this discounts the potential for renewable and battery combinations to make a contribution.
This is a global trend, Majkut says. India is developing solar plus storage projects at 3 US cents per kilowatt hour, less than half the cost of a new thermal plant.
There are benefits to improved storage capacity beyond enabling more renewable supply to the grid. A report on the US market from CSIS says that batteries deliver value to the grid and the customer by improving reliability of supply more generally. In Texas, batteries fill gaps in a market with rapid demand growth and could enhance reliability during system failures such as amid Winter Storm Uri in 2021, while in California they make up for inconsistencies in supply as thermal generation is retired in favour of renewables.
China, again, leads on battery production, although there are also producers in South Korea, Japan and Norway.
Integrating more sophisticated digital technology can boost grid resilience by balancing supply and demand more efficiently. “A modern energy system can get resilience from the supply side and the demand side in ways that allow for energy services to continue to be delivered and affordable because it’s been enabled by digital technology,” says Majkut.
“If you can implement smart demand reduction, not just draconian consumption limits, but market structures that allow people to turn their thermostat down at times of peak load, or agglomerate these so-called distributed energy resources in smart ways, you can really take the edge off energy security challenges while maintaining affordability for consumers.”
He says this might be hard to see in Europe at the moment given how high energy prices have increased, but without such strategies the situation could be far worse.
Cyber challenges and physical attacks
As grids become more digitalised, governments need to be prepared for cyber attacks on their energy systems. These are rising worldwide. Sophos, the cyber security group, said that two-thirds of 275 respondents to a survey of information technology leaders in oil and gas, energy and utility companies across 14 countries said they had suffered a ransomware attack in 2024. A report from Trustwave says that ransomware attacks against the utility sector increased 80 per cent year on year, with nearly half of those attacks occurring in the US. Check Point said in September 2024 that US utilities saw a 70 per cent rise in cyber attacks in general.
In May 2021, a cyber attack on Colonial Pipeline, a 5500 mile pipeline system connecting the Southeast and East Coasts of the US, was the victim of a ransomware attack by a group known as DarkSide. The attackers, believed to be of eastern European origin, infiltrated the company and forced a shutdown of the entire pipeline for several days, causing supply chaos and panic buying in petrol across the south-east.
The vulnerability of energy systems has increased as IT and operational technology converge, or as energy systems become more digitalised to promote efficiency. At the same time, electricity generation has become more dispersed as smaller-capacity renewable sources and localised and community sources feed into the grid, increasing attack vectors for hackers. Older grids are not immune, either, given that they were built in an era with less consideration of cyber security.
After testing the cyber resilience of its energy sector, the EU Agency for Cybersecurity identified a few vulnerabilities on the monitoring front alone. Almost a third of its operators in the energy sector do not have a single critical operational technology process monitored for security, while half of the operators of essential energy sector services monitor both their operational and IT out of the same security operations centre, in violation of best practice advice.
In response to the changing environment, Europe issued a Network Code on Cybersecurity for the electricity sector in 2024, advocating a common level of cyber security and standardised approaches to risk assessment, attack reporting and risk management. In recent years, the EU has also put forward plans including the Critical Entities Resilience Directive, aimed at shoring up companies’ understanding of and defence against major risks, and the Network and Information Security Directive 2, a law requiring stronger security measures against and strict reporting procedures for cyber breaches.
The US Department of Energy’s cyber security strategy, meanwhile, outlines a plan for co-ordinated defence. It identifies five key pillars to fill in gaps and strengthen the system, including understanding the risk and mitigating it by applying zero trust principles and enhancing management of vulnerabilities. Improvement of workforce cyber security awareness is another crucial aspect and a main point of vulnerability, as covered in our report on cyber security for the Tech for Growth Forum.
In Europe there is growing focus on the threat of physical attacks on energy infrastructure, which have increased since Russia’s full-scale invasion of Ukraine in 2022. In December 2024, a vessel belonging to Russia’s shadow fleet was seized by Finnish authorities after it severed a critical electricity interconnector with Estonia. “The vessel had military grade detection hardware in its hull, pointing to a direct, premeditated and malicious attack on European energy infrastructure,” according to a report by the European Union Institute for Security Studies.
Nato held its first meeting of a new Critical Undersea Infrastructure Network in May, which is seeking to put in place new tools to enhance security of undersea pipelines and monitor potential threats.
Demand side policies
Satisfying the demand for energy via a resilient system is important, but the system can be made even less vulnerable by reducing that demand. As the Green Alliance report notes, “the most secure unit of energy is the unit that does not need to be consumed”.
A joint UK Energy Demand Research Centre and UK Energy Research Centre report focuses solely on demand side measures not as a reactive solution to crises but a proactive part of any energy security strategy. It says that one-off subsidies such as the £51bn it cost in 2022-23 to fill holes in household budgets created by rising energy prices would have been better spent on insulating the nation against future shocks by implementing longer-term energy demand reduction policies. This does not mean absolute demand side reduction for its own sake without the consideration of growth. With the right strategy in place, economic activity need not be sacrificed to achieve lower energy consumption, it says.
Marie Claire Brisbois, an interdisciplinary researcher into power, politics and influence in energy, water and climate governance at University College London and an author of the report, says that “people become more secure as nationally we need less energy”. While implementing such policies might be a problem for energy companies, moving individuals from a state of energy poverty to energy security is “surely better for the nation” as a whole.
Resistance seems to come from lobbying and pressure industries, says Brisbois, who believes that this frequently waters down solutions “so obvious as to be absurd”, such as better insulation, heat pumps and solar panels installed as standard for new homes.
Governments could take other measures, too, for instance discouraging the use of SUVs in cities such as London which were not designed for large vehicles. “Why aren’t we doing this?” asks Brisbois. “I’m not sure. Paris is taxing large vehicles so it’s not unprecedented. However, regulating size does limit choice in markets that are supposed to be ‘free’ and I’m sure car lobbies are active in pushing back against this.”
Consumers might be open to simple policies universally implemented, such as improved household appliance efficiency. An ongoing study run by the Energy Demand Research Centre and the charity Involve is investigating citizens’ receptiveness to a suite of demand side policies, including using more public transport rather than their own cars — an approach more people might countenance if they could trust the government to provide reliable and safe services. Such measures would reduce energy consumption at the household level while boosting economic productivity and employment, says Brisbois, noting this is corroborated by a recent paper in ScienceDirect. She also says that a four-day workweek for intellectual jobs would improve energy efficiency and has been proven to increase productivity.
These would augment existing measures such as the electrification of the heat and transport sectors, which have already delivered relative demand reduction given their better fuel efficiency than fossil driven equivalents. Other consumer side policies such as distributed clean energy — solar generation on people’s homes, for instance — have been around in many places for two decades, alleviating the pressure on national networks and infrastructure.
A further plank is to implement demand side response, encouraging consumers to vary their electricity consumption to smooth out high and low demand periods or to install on-site storage, such as batteries, to redistribute energy proactively from trough to peak hours. Majkut at the CSIS says: “Digital tools — you could even extend this into artificial intelligence — provide us the ability to build energy resilience on the demand side as we think about the sort of market structures and traditional energy security tools we need on the supply side.”
Conclusion
While Europe’s over-reliance on one major supplier for its energy needs has proven to be ill-advised, the bloc’s handling of the crisis offers a possible road map for policymakers looking for ways to make their countries self-sufficient in energy.
One longer-term benefit is that it has pushed the EU into having a more co-ordinated approach to its energy needs. The war in Ukraine incentivised the bloc to create joint action plans to reduce dependence on Russian fossil fuels by finding energy efficiencies to reduce demand as well as increasing reliance on renewables.
The crisis also led to the creation of mechanisms such as AggregateEU. Observing that the bloc’s members were outbidding each other in the scramble to secure supplies, in 2023 it created a matching tool for demand and supply of gas which has harnessed the member states’ collective buying power and enabled greater diversification of gas sourcing at more competitive prices.
The collapse of parts of the grid across the Iberian peninsula in April, meanwhile, has prompted countries, such as France and Spain, to install more connectors. While the bloc had an outline for the energy transition as well as individual national targets, it had fewer joint structures to facilitate these. Funding of €1.6bn for the Bay of Biscay underwater link between France and Spain was announced in June 2025.
A more co-ordinated approach to electricity distribution which can promote the integration of renewables is a benefit for net zero goals and helps to achieve greater independence for the EU collectively given the sovereign nature of such assets. This should lead to a considerably more integrated, balanced and self-sufficient electricity market across the bloc.
With vast sovereign sources of energy supply, including oil, natural gas and the world’s largest nuclear fleet, the US has less incentive to change its energy mix. But the roll out of energy-hungry AI data centres and climate change are squeezing its system, with Morgan Stanley forecasting a 45 gigawatt power supply gap by 2028, which is equivalent to the electricity needs of 33mn households.
The US needs to invest in its grid and improve its energy distribution, as well as enhance its supply chain for manufacturing of technical equipment to boost energy security. Its infrastructure is probably its greatest weakness, with an old and inefficient grid that has not kept up with demand. This could be exacerbated in a world that is making less effort to combat climate change and therefore is likely to be hotter.
Majkut says: “The demand spike in the power sector and the thin excess capacity in our electricity grid is definitely a reliability issue and could really challenge our tools for resilience. If we manage demand growth poorly, or if we close resources too quickly, we could have a lot more disruption than we have now.”
Read the full article here