Energy security – why electrification has become a geopolitical imperative

Energy security used to revolve around access to fossil fuels—securing supply  routes, managing reserves and ensuring stable imports. That framework is rapidly becoming obsolete. Electricity is no longer simply about moving energy—it is becoming a strategic infrastructure, central to economic sovereignty and industrial resilience.

Recent geopolitical events have made this shift explicit. Europe’s dependence on Russian gas, which exceeded 40% of imports before 2022, highlighted how deeply energy systems can constrain political autonomy. When flows were abruptly reduced, the consequences were immediate: price shocks, industrial disruption and a costly reorganization of supply chains. The lesson was not simply about diversification. It was about control.

In this new environment, electrification is gaining a different meaning. It is often presented as a response to climate change, but its acceleration is increasingly  driven by strategic considerations. Producing electricity locally—from renewables or nuclear—reduces exposure to external shocks, volatile  commodity  markets  and geopolitical tensions. It anchors part of the energy system within national borders.

This does not eliminate risk;  it transforms  it.  Electricity  cannot be stockpiled or rerouted globally with the same flexibility as oil or gas. It depends on a tightly integrated system:  generation,  transmission, distribution and real time balancing. As a result, energy security is no longer defined by access to resources, but by the ability to build and operate complex infrastructure.

At the same time, the scale of demand is shifting. Global electricity consumption is accelerating at an unprecedented pace, and this growth is no longer confined to emerging economies. After more than a decade  of stagnation, advanced economies have re-entered a phase of sustained expansion, driven by digital infrastructure, electrified transport, heating  systems  and  the  gradual transformation  of  industry.  This marks a structural break, not a cyclical rebound.

The   implications are tangible. Electricity must now support uses that are both more numerous and more demanding. Data centers, for instance, require near-perfect reliability. Industrial electrification imposes new load profiles. Decentralized renewable generation  introduces variability into systems  that  were designed for stability. All of this increases the technical and operational complexity of electricity systems.

This is where the real constraint lies.  While  generation  capacity  is expanding rapidly—led by renewables, which now account for around 90% of new additions (IRENA, 2024)—networks are struggling to keep pace. Many grids were designed decades ago for a centralized model and are now ageing under the pressure of growing  demand  and  bidirectional flows. The result is a bottleneck that is increasingly visible: connection delays, rising costs and mounting pressure on equipment supply chains.

Electrification therefore creates a paradox. It strengthens long-term sovereignty by reducing dependence on imported fuels, yet it increases reliance on infrastructure that is capital intensive, technologically complex and slow to deploy. Control shifts away from resource ownership toward system capability—from access to energy to the ability to manage it.

For investors, this shift is essential. Electrification should not be seen as a narrow thematic bet on the energy transition, but as an exposure to structural economic priorities that are unlikely to reverse:

• energy independence
• industrial competitiveness,
• macroeconomic stability and
• resilience to external shocks.

What matters is not only where electricity is produced, but how it is transported, stabilized and used. The value increasingly lies in the enablers:  networks, equipment, storage systems and software that allow electricity to function within an  increasingly  constrained  and complex environment. These are not discretionary investments. They are prerequisites.

Another key feature of this dynamic is its robustness to policy fluctuations. Even if political priorities evolve, the underlying  infrastructure requirements  remain. Electricity, whatever  its  source, must still be transmitted, transformed and delivered with high reliability. The physical nature of these constraints gives the investment cycle a durability that extends beyond short-term policy shifts.

Ultimately, electrification is redefining the notion of power, both economically and geopolitically. In a fragmented world, sovereignty is no longer measured solely by access to resources, but by the ability to operate resilient, efficient and autonomous electricity systems.

The Fund is exposed to a risk of capital loss.