Governing for energy insecurity: the trilemma got tougher
Boards that are equipped with the latest information on the energy transition – as well as energy innovation, pricing, availability, supra-national initiatives and ongoing geopolitical challenges – will be primed to ask the right questions in the boardroom to ensure their organisations remain resilient.
Understanding new and sustainable energy sources
In the period to 2050, renewables demand is set to quadruple, oil demand will likely stay the same, natural gas is rising slightly, coal is dropping sharply but nuclear is on the up. Boards need to work out which key innovations to watch, and where the surprises might lie.
Research from JP Morgan, Mitigating volatility with a diverse energy mix, points out: “The need for a diversified energy mix to mitigate risk and build resilience is reshaping global power generation. Today, innovations in nuclear, solar, wind, geothermal and energy storage are not only transforming the global energy landscape but also paving the way for a more stable and sustainable future.”
Global nuclear generation is expected to reach record highs in 2026, with the International Energy Agency (IEA) projecting 75% increase in capacity by 2050 compared with today. Last year saw more than 410 reactors operating in over 30 countries and 63 reactors under construction. All eyes from the research community are on fusion. Unlike fission, fusion does not produce radioactive waste products and is safer in operation.
Hydrogen is also on the up. The European Commission has selected nine hydrogen production projects under the third auction of the European Hydrogen Bank. Across seven countries in the European Economic Area, the projects are expected to provide almost 1.1 gigawatts of electrolyser capacity and produce over 1.3m tonnes of hydrogen over their first 10 years of operation, with an estimated greenhouse gas emissions avoidance of 9m tonnes of CO2 equivalent. The selected projects will receive a total of around €1.09bn in EU funding from the Innovation Fund, sourced from the EU Emissions Trading System.
In the UK, this progress has not been as straightforward. In May 2026, the Carbon Capture and Storage Association, Hydrogen UK and Electrify Industry sent a letter to the Secretary of State for Energy Security and Net Zero urging him to accelerate the delivery of the UK’s hydrogen strategy to ensure a stable environment for investment.
"The energy transition, alongside rising geopolitical tensions, has made clear that price volatility and resource uncertainty are now structural features of the global economy, not temporary disruptions. This requires a wider risk lens than traditional financial or operational frameworks allow. Energy security is now a board-level issue, with geopolitical exposure, supply-demand shifts, and value-chain dependencies built into core risk management. Volatile pricing and resource availability should be treated as inputs into strategy and capital allocation, not just short-term fluctuations."
Eran Klein, Non-executive Director and Ethics & ESG Committee Chair, TBC Bank Group
Tried and tested solar is booming globally
Record solar growth meant clean power sources grew fast enough to meet all new electricity demand in 2025, according to Ember’s seventh annual Global Electricity Review. This was the first year since 2020 without an increase in electricity generation from fossil fuels and only the fifth year without a rise this century.
Solar has become the leading source of new generation, supported by battery storage, that is beginning to provide system flexibility at scale. In major economies, including China and India, fossil generation declined last year even as demand continued to grow.
Solar power cemented its role as the dominant driver of change in the global power sector, and its rise was 18 times larger than that of gas. Global solar generation is now the same size as the total electricity demand of the EU.
Follow the global responses to energy insecurity
The conflict in the Middle East has triggered unprecedented disruption to global fuel markets, tightening supply and placing significant pressure on economies, businesses and consumers worldwide.
Boards are not only inundated with location-specific and sector-specific challenges to energy security and pricing, but they are also contending with myriad policy responses to these disruptions. Keeping abreast of these is key to planning for a more secure, decarbonised energy future.
The IEA is tracking policy measures adopted by countries in response to the unfolding energy crisis. In effect, this means tracking governmental actions to conserve energy that could affect business as well as consumers. It says it will continue to monitor these developments while instability in the market continues.
It is also worth noting that other shocks to energy supply are increasing due to physical climate risk. New analysis reveals the scale of climate vulnerability facing Europe's clean energy transition and provides actionable insights for building resilience across France, Germany, Italy, Spain and the UK. Nearly half of Europe's renewable generation capacity is in critical climate risk categories, threatening the foundation of the continent's energy security and economic stability.
Supranational efforts are tackling insecurity
The European Commission says that the current geopolitical situation is a stark reminder that accelerating the transition is an economic and security imperative.
The Commission proposes the following actions:
- Coordination – including refilling of underground gas storages, use of flexibilities in filling rules, or any exceptional releases of oil stocks.
- A new fuel observatory will be established to track EU production, imports, exports and stock levels of transport fuels.
- Timely, targeted and temporary measures to protect from price peaks.
- Accelerating the shift to homegrown clean energy to replace oil, gas and fossil transport fuels.
- Stepping up development of the grid system.
- Boosting investments, such as those under the Recovery and Resilience Facility (€219bn) and cohesion policy funds.
But public money alone will not cover the significant investment needed for the energy transition. In the EU, this is put at €660bn a year until 2030.
In the UK, for the second year, Deloitte surveyed a large cross-section of the energy transition investment community – representing at least £9tr in assets under management – on their confidence to invest in low carbon energy technology and infrastructure in the UK.
It found that UK energy transition investors remain positive about the transition: nearly all (93%) agree it is ‘more of an opportunity than a challenge’ but there are three main actions that will increase their confidence: faster energy policy delivery, enhanced grid infrastructure (echoing the EU) and clarity on risk and cashflow.
While the world is in flux, all eyes are on investors and policymakers to push us forward. Until the position solidifies, monitoring the new normal for energy will be a major component of oversight. Now is the time for boards to ask themselves whether they have clear accountability for energy resilience and if they’ve sufficiently stress-tested their current exposure to price volatility (making energy a strategic financial risk) and supply interruption across their value chains, while also considering how aligned their transition ambitions are to an emergent electrified future.
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