Energy transition shifts focus toward electrification and new geopolitical risks

The global energy transition is shifting the focus of energy security from oil dependency toward electrification and new geopolitical risks. Following energy shocks in the Strait of Hormuz and the European gas crisis, governments are increasingly viewing electrification not just as a decarbonization tool, but as a strategic necessity to reduce exposure to volatile maritime routes and fossil fuel markets.

An analysis by the International Energy Agency suggests that with existing technologies, electricity could meet 33% of global final energy consumption, up from 23% currently. While the global goal is to reach 35% by 2035, the primary challenge lies in expanding power grids, generation, and storage infrastructure rather than waiting for technological breakthroughs.

However, a strategic paradox exists regarding the supply chain. While Western nations aim to reduce oil reliance, they risk becoming heavily dependent on China. China is currently the world leader in clean energy technologies, including solar panels, batteries, and electric vehicles. Despite its growth in renewables, China’s industrial system remains significantly powered by coal, which provided approximately 55% of its electricity in 2025. This creates a contradiction where decarbonization technologies used in Europe are often manufactured within industrial systems still largely reliant on fossil fuels.