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Cleantech Insights — July 1, 2025

Hi there,

This week, we're looking at how security could be the next big driver of the global clean energy transition.

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As of this writing, the U.S. Senate is still working on passing President Trump’s signature budget bill. It’s not yet certain what will survive the amendment process, but as it stands, the bill contains provisions that amount to a full frontal assault on renewable energy, including penalties on new wind and solar projects built after 2027.

We’ll see what actually shakes out. In the meantime, I wanted to step back and look at what might be emerging as the biggest global driver of decarbonization: energy security.

Will Energy Security Emerge as the Next Driver of Clean Energy?

Clean energy may face policy headwinds in the U.S., but many other countries are increasingly viewing it as a critical hedge against the risks of economic nationalism and geopolitical instability.

Fears of a sustained 1970s-style shock from the recent hostilities between Iran, Israel and the United States seem premature — for the moment. But the volatility the conflict created was a reminder that oil remains a global commodity that is highly vulnerable to supply chain risks.

Analysts seem to be hedging their bets: JP Morgan forecasts that 2025 oil prices will remain in the low-to-mid $60s, but could spike to $120 or more in the event of further tensions in the Middle East. Whether or not that happens, the volatility itself is a reminder of how fragile a fossil-fuel based energy regime can be — and by extension, how clean energy can at the very least provide a hedge against uncertainty.

Two recent reports examine this dynamic in detail.

The New Electrotech Strategy

In Energy Security in an Insecure World, Ember, a global clean energy think tank, explores the various factors that are creating increased energy insecurity for many countries.

Some key points from the report:

• Over the last half century, fossil-fuel imports have grown dramatically. Today, three out of four people in the world live in a net fossil importing nation.

• Tariff wars, the decline of "Pax Americana" and increasing regional conflicts are threatening global trade arrangements that many have taken for granted.

• Some counties, like Germany, Japan, and Italy, are more exposed than others. 20% of global GDP is in countries that import more than two-thirds of energy demand.

Current energy security pressures may not be as visible in North America as they are in other parts of the world. After many years of declining oil production, over the last decade and a half the United States has built what the report calls a "fossil fortress" by developing previously untapped shale oil reserves.

That doesn't mean the U.S. is entirely insulated from geopolitical shocks, however.

The Answer: Electrotech

The report's answer to this challenge will be familiar to most of us in the decarbonization space. In short: increase renewable supply, accelerate storage and advanced transmission, and electrify end-use demand with EVs and heat pumps. Ember calls this strategy "Electrotech."

According to Ember's analysis, shifting to EVs, heat pumps, and renewables can reduce global net imports by 70%. China is aggressively pursuing this strategy — both reducing dependence on energy imports and exporting electrotech technology to the world.

The New Joule Order

The global investment firm Carlyle makes broadly similar arguments in its recent report, The New Joule Order:

• "Peak oil has arrived as peak trade." The growing insecurity of global trade is driving nations to reduce their imports of fossil fuels by increasing nuclear and renewable energy.

• Chinese fossil fuel imports peaked in 2019.

• Europe imports 54% of its energy, almost entirely in the form of fossil fuels.

• "An energy security premium ... is already replacing the green premium."

Thus, a tariff and a security premium are analogous to a carbon tax and a green premium—and may be more effective at spurring transitions. France has one of the lowest carbon footprints in the world, but it didn’t get there because its leaders wanted to save the climate—it got there because they wanted energy independence.

New Joule Order, page 11.

Beyond the national security implications, the Carlyle report outlines a new way of diversifying energy investments between high upfront capital, fixed-return projects dependent on power purchase agreements (such as nuclear and renewables) and variable-return investments like upstream fossil fuel exploration and dispatchable resources (including battery storage and gas peaker plants).

The end result is that "the good old fashioned super cycle is likely being replaced by a bubbling cauldron of boom and bust cycles, each of which creates fresh opportunities to solve problems, make a profit, and support the energy transition."

Additional Reading

Europe’s energy Achilles’ heel — and why an e-fuel plant matters more than its size suggests

Trading cases Tariff scenarios for taxing times - Wood Mackenzie

That's it for today. Thanks for reading, and feel free to forward this to anyone who might find it useful. As always, I'm curious to hear your thoughts on how security concerns are playing out in your corner of the energy world.