Renewable energy: it’s about energy security, not just carbon emissions

The global energy conversation is shifting. While decarbonisation remains a critical goal, the urgency of energy security has taken centre stage. Geopolitical tensions, supply chain realignments, and surging electricity demand are reshaping how nations think about power – and where they get it from.

From crisis to catalyst

Europe’s over-reliance on Russian gas was starkly exposed following the full-scale invasion of Ukraine. Before the war, Russia supplied around 40% of the EU’s natural gas, primarily via pipelines like Nord Stream 1. By early 2023, that figure had plummeted by over 80% due to sanctions and the sabotage of Nord Stream 1 in September 2022.

The fallout triggered a spike in energy prices and a scramble to diversify supply. The US stepped in as Europe’s largest supplier of liquefied natural gas (LNG), shipping it across the Atlantic in specialised tankers. At the same time, the reindustrialisation of the US economy and the energy demands of AI infrastructure have driven growth in electricity consumption not seen in decades.

The result? A structural need for dependable, local energy generation. And that’s where renewables come in.

Last year, renewables accounted for a staggering 93% of global energy capacity expansion. This isn’t just a climate story – it’s a security imperative.

Three companies powering the transition

Here are three companies at the forefront of this shift, each playing a unique role in the evolving energy landscape:

GTT: it’s gas, gas, gas

France-based GTT designs the membrane technology used in LNG carriers (LNGCs). These membranes are a small but critical component, ensuring the safe and efficient transport of LNG across oceans.

GTT’s competitive moat lies in its engineering pedigree and innovation track record. With a robust order book driven by a global LNG capacity build-out, we believe the company is well-positioned for medium-term growth. Beyond that, the replacement cycle for older carriers is expected to sustain demand.

Importantly, GTT offers exposure to the energy sector with lower commodity price sensitivity and a smaller carbon footprint – an attractive proposition in today’s market.

Nextracker: follow the sun

Nextracker is the global leader in solar tracking systems, which allow solar panels to follow the sun’s path through the day and maximise energy capture. This technology can boost energy output by up to 25% compared to fixed-tilt systems, making it a key enabler of utility-scale solar efficiency.

As solar becomes a cornerstone of national energy strategies, Nextracker’s role in improving performance and lowering the levelised cost of energy makes it a vital player in the renewable ecosystem.

Southern Copper: metal behind the megatrend

Copper is essential for electrification. Once tied closely to general economic activity, copper demand is now increasingly driven by green infrastructure, electric vehicles, and renewable energy.

Southern Copper, a subsidiary of  mining conglomerate Grupo Mexico, owns some of the world’s most valuable copper reserves, with over 60 years of supply and a pipeline of growth projects. While many miners face rising costs and declining grades, for us Southern Copper stands out with flat-to-declining production costs and expanding output.

With China accounting for around half of global copper demand amid a green investment boom, the long-term fundamentals for copper – and for Southern Copper – remain compelling.

Final thoughts…

Energy security is no longer just about keeping the lights on – it’s about resilience, independence, and strategic advantage. As the world races to secure its energy future, renewables are no longer a “nice to have” but a necessity.

Investors looking to align with this structural shift should look beyond the headlines and towards the companies quietly powering the transition.

Blair Couper is investment director, global equities, at Aberdeen.