Energy Stability as a National Security Concern
The energy grid is a national security priority for countries like the U.S., the U.K., and Germany due to its central role in supporting defense, economic stability, technological innovation, and public welfare. A reliable and secure energy grid is crucial for national defense, as it powers military operations, communication networks, and intelligence systems, ensuring that these systems remain functional during times of conflict or crisis. The energy grid underpins the economy by enabling financial networks, industrial production, and vital services. Energy disruptions or price volatility can destabilize markets, impact household budgets, and disrupt industries, creating ripple effects that threaten national security in both the short term and in the long term. Moreover, in the digital age, the grid is essential for supporting the development and deployment of advanced technologies like AI, which rely on substantial energy resources for computation and data processing. Any instability in the grid can hamper technological progress, weakening a nation's competitive edge in emerging industries.
Electricity price volatility has become a significant concern, particularly as global energy markets are increasingly affected by geopolitical tensions, climate change, and the transition to renewable energy. Countries like the U.S. and the U.K. have faced price fluctuations driven by supply chain disruptions, energy scarcity, and shifting demand patterns. However, Germany's energy grid has experienced even greater volatility (with price swings 3x its European peers and comparable with the worst instability in the USA in 2022) due to its decision to phase out nuclear power as part of its "Energiewende" (energy transition). The closure of nuclear plants, which had provided a stable, low-cost energy source, has left a gap that has been partially filled by renewable sources like wind and solar. While these sources are cleaner, they are also more intermittent and weather-dependent, contributing to fluctuations in electricity supply and price. When wind or sunlight is insufficient, Germany is forced to rely more on imported fossil fuels or backup fossil-fuel-based generation, further amplifying price volatility. This transition, though aimed at reducing carbon emissions, has led to higher electricity costs for consumers and greater instability in the domestic energy market, making Germany more vulnerable to global energy price swings and supply disruptions.
The integration of energy storage solutions has mitigated some of this volatility, but the technology is still in its nascent stages. Large-scale batteries can smooth out peak demand and provide backup power during shortages, but their current capacity is limited, meaning they cannot fully replace the stability once provided by nuclear power. BUT - they take years to deploy, even with every player (project finance, the relevant ISO, lenders and the operators themselves) putting a finger on the scale - the best time so far has been about 4.5 years for 500MW. That time is decreasing, but that rate of change isn’t constant - neither the first nor the second derivative of that deployment time is negative.
Energy storage helps balance supply and demand in the short term, but it cannot yet ensure long-term price stability or grid resilience on the scale required - the combination of increasing baseline demand and increasing reliance on green sources (solar, wind) - whose very nature increases supply-side volatility - act as twin tailwinds on volatility.
The increasing volatility in energy prices and its effect on national security is compounded by the risks to digital infrastructure. Many emerging technologies, such as artificial intelligence (AI), require vast amounts of power to run complex algorithms and data centers. Energy instability could slow the pace of technological development, leaving nations at a competitive disadvantage in the global race for AI dominance. Additionally, the energy grid’s vulnerability to cyberattacks is a significant concern for all three countries. A successful attack on the grid could not only disrupt daily life but also cripple national defense capabilities, financial systems, and critical technological infrastructure.
More storage, deployed more quickly, controlled more scalably, with the right economic incentives for every participant to maximize their capabilities are required - which is why we have developed a modular, scalable, load-shifting solution to deploy into tens of thousands of home, to immediately taper the most significant grid imbalances.
