From efficiency to resilience: energy's new capital cycle
For decades, energy flowed through a highly integrated global economy, with countries importing the cheapest and most reliable supplies available. That model is now changing, says Christian Keller, Global Head of Economics Research at Barclays.
Russia's invasion of Ukraine forced Europe to find alternatives to Russian gas, such as LNG. Shale gas and fracking turned the US from a major energy importer into an exporter. China's dominance in clean-energy manufacturing has strengthened its position in global renewable-energy supply chains.
As countries electrify, access to critical minerals, refining capacity and clean-energy technologies is becoming as strategically important as traditional fuel supplies. In this new environment, reliable and affordable energy could become an increasingly important source of economic competitiveness. Different energy technologies also favour different geographies, potentially redrawing the map of future energy production and industrial growth. Barclays Research describes this as a global energy race, with countries competing to secure the resources, infrastructure and technologies that could increasingly determine economic growth and competitiveness.
Policymakers now face three energy-security challenges: securing fossil-fuel supply chains ("molecules"), expanding electricity systems ("electrons"), and investing in breakthrough technologies ("science"), such as nuclear fusion, that could reshape future energy production.
For investors, the implication is clear: a more secure energy future will require a larger energy system, and a larger energy system will require significantly more capital.