The New Joule Order: Security Reshapes Our Energy Future
Guest post from — Ayub Ansari | Climate Tech & Infrastructure Private Equity at Carlyle Group.
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.
The New Joule Order isn't about choosing between climate goals and energy security. It's about recognizing that security concerns may deliver what climate activism couldn't: a faster, more profitable transition built on diversification rather than ideology.
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.
The winners in this new paradigm will be those who understand that security—not sustainability alone—is driving the most profound energy transformation of our lifetime.
— Ayub Ansari
Due Diligence Principal | Climate Tech & Infrastructure Private Equity at Carlyle Group
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