[Subscribers Only] Adaptation Deep Dive "The New Joule Order", Security Reshapes Our Energy Future 🪖

Top 10 Stocks, 5 ETFs, and 5 Private Deals for the Security-First Energy Transition driven by the new Carlyle Private Equity agenda for a "bullet proof" 2025 portfolio.

In Carlyle's latest research, Chief Strategy Officer Jeff Currie reveals how security concerns—not climate activism—are now the primary driver of global energy transformation. This security first paradigm is reshaping investment priorities and accelerating the diversification of our energy landscape.

The Security Imperative

Nations aren't just seeking cleaner energy—they're building resilience against an unpredictable world. This security first approach is creating something revolutionary: The New Joule Order.

• Energy independence has become non-negotiable for nations vulnerable to supply disruptions

• Countries are diversifying across multiple energy sources—creating portfolios of joules that can withstand geopolitical shocks

• Investment decisions now prioritize protection from volatility over environmental idealism

Historical Evidence: Security Drives Faster Transitions

The oil crisis motivated transition (1973-1993) progressed at least 30 basis points per annum faster than our recent Net Zero push (2010-2024).

Peak Oil Trade, Not Peak Oil

Fossil fuels aren't disappearing—but their cross border movement is reaching its zenith. China, particularly, is signaling the arrival of "Peak Oil Trade."

Nations with options are reducing fossil fuel imports by:

• Rapidly expanding domestic nuclear capacity

• Accelerating renewable deployment

• Prioritizing energy sources that can't be disrupted by foreign actors

The much discussed "green premium" has vanished, replaced by an emerging security premium that forward thinking investors are only beginning to recognize.

The Investment Blind Spot

Wall Street has been looking through the wrong lens:

• Obsessing over production methods (LCOE) rather than consumption outcomes (ROE)

• Forgetting that all consumed energy is identical—it's just a joule

• Overlooking how production methods (oil molecules, electricity electrons, coal tonnage) carry vastly different security implications

"France has one of the lowest carbon footprints in the world, but it didn't get there because its leaders wanted to save the climate—it got there because they wanted energy independence."

The Underinvestment Reality

Current projections reveal a startling truth: despite all the climate rhetoric, we remain substantially underinvested in multiple energy sources—including fossil fuels and nuclear—relative to actual projected demand.

Implications for Private Equity and Venture Capital

The New Joule Order fundamentally reshapes the investment landscape for PE and VC firms:

• Active management returns to prominence — With rates normalized and market discipline returning, active management becomes critical again after years of easy capital flow

• Portfolio diversification across energy types — Smart investors will balance "tolling assets" (nuclear, renewables) with "trading assets" (storage, upstream) to create counter cyclical returns

• Private credit plays a larger role — In a world of higher rates and greater uncertainty, investors increasingly require assets to be self liquidating

• Optionality becomes a core value driver — Energy assets with embedded real options will command premium valuations as volatility increases

• Investment opportunities in mal investment — Policy driven initiatives create misallocated investments, creating opportunities for PE firms to provide solutions (e.g., connecting stranded renewable assets to storage and grid)

The report suggests shifting from the traditional "green vs. brown" asset classification to a "fixed return vs. variable return" framework that better reflects how these assets perform through economic cycles.

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Djoann Fal - My take as an investor:

“The next energy superpowers won’t be the ones who go green — they’ll be the ones who go sovereign.”

Welcome to this special premium edition of The Adaptive Economy. Today, we dive into what Carlyle’s Jeff Currie calls The New Joule Order — where energy investment is no longer led by environmental idealism but by national security imperatives.

This shift unlocks a new investment playbook for those who see the world not as it should be, but as it is.

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Context: Why This Transition Is Happening Faster Than You Think

• Security over sustainability: Countries are building energy portfolios like investors — diversifying to hedge geopolitical risk.

• Peak Oil Trade: Not peak oil itself — but the decline of cross-border oil flows due to sovereignty strategies.

• Underinvestment: Nuclear, fossil, and even renewable infrastructure remain dramatically underfunded relative to projected demand.

France didn’t decarbonize for the climate.
It built nuclear because it feared oil dependence.

That’s the new logic — and it’s reinvestable.

🧠 How to Think Like a “Joule Allocator”