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July/August 2026 • Volume 19 • No 5 • Published monthly • ISSN 1757-7365

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com

Special Supplement Corporate climate risk

Siemens Energy has brought together all of

its grid digitalisation solutions and opened

a new Grid AI Lab to help unleash the full

potential of articial intelligence. Page 11

The European summer heatwave is one of

the many signs shining a light on the scale of

losses from physical damage alone. But that

is only the visible sign. Page 14

News In Brief

ETS must drive EU

electrication, as UN calls

for increased ambition

The EU must turn its Emissions

Trading System (ETS) into Eu-

rope’s electrication engine, says

WindEurope.

Page 2

US states in court to

challenge offshore wind

cancellations

A coalition of seven states in the US

northeast states have led a lawsuit

challenging the Trump administra-

tion’s agreement with TotalEnergies

to cancel the company’s offshore

wind lease for a project off the coast

of New York.

Page 4

Strait of Hormuz crisis

reinforces need to tackle

energy vulnerabilities

Disruptions to oil and gas ows

through the Strait of Hormuz have

exposed major structural risks in

Southeast Asia’s energy sector, ac-

cording to a new International En-

ergy Agency report.

Page 5

Nuclear developer plans 14

SMR units in UK

SGE, a European Small Modular

Reactor (SMR) development and

investment platform, has an-

nounced plans to build 14 SMRs

on three sites in the UK.

Page 7

Economies ‘struggling to

adapt’ to renewables boom

The policies, nancial frameworks

and infrastructure needed to support

a renewables-based economy are

not keeping pace with the boom in

installations, according to the rst

edition of the Renewables-Based

Economy Tracker.

Page 14

Technology Review

For decades, cyber risk in the ener-

gy sector was treated as a technical

problem – something to be managed

by IT teams. Now, it’s time for en-

ergy leaders to rethink their cyber

security strategies Page 15

Advertise

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or call +44 (0)1933 392987

Government ministers and business leaders came together during Climate Action Week in

London, UK, in a bid to accelerate the energy transition and drive electrication, as the conict

in the Middle East continues to threaten global energy security. Junior Isles

Geopolitical risks fragments energy transition

THE ENERGY INDUSTRY

TIMES

Final Word

Time for sex, love and some

couples therapy, says

Junior Isles. Page 16

Government and business leaders

gathered in London last month to ac-

celerate the energy transition and drive

electrication, in the face of geopolit-

ical tensions that continue to threaten

energy security.

The Global Energy Transition and

Electrication Summit, held during

London Climate Action Week, saw

ministers and business leaders move

to advance practical solutions for an

accelerated energy transition away

from fossil fuel dependence.

In a sign of continued momentum on

the global shift away from coal, oil

and gas dependence, the London

summit marked a landmark moment

for international cooperation to transi-

tion away from fossil fuels, with Co-

lombia and the Netherlands formally

handing over the outcomes of the San-

ta Marta Conference on Transitioning

Awa y from Fossil Fu el s (TAFF) to the

Brazilian COP30 Presidency as input

to their global roadmap initiative.

Secretary-General of the United Na-

tions, António Guterres, said: “This

summit takes on urgent tasks, at an

urgent moment: advancing the energy

transition – at speed and scale, and

with justice; and building a new glob-

al economy for all, powered by clean,

affordable electricity.

The UK government used the June

gathering to announce that it had

passed a signicant milestone in the

country’s effort to meet its climate

pledge.

Ed Milliband, Secretary of State for

Energy Security and Net Zero, UK,

said: “We’ve chosen today to an-

nounce we’ve passed the incredibly

signicant milestone of over £100 bil-

lion of private investment in clean

energy since our government came to

ofce less than two years ago.”

Meanwhile, a number of business

leaders demonstrated their support for

governments with the signing of the

‘Electrify Now’ initiative backing

faster electrication.

A recent survey found that 91 per

cent of global business leaders see

electrication as key to strengthening

energy security and resilience, and

that 82 per cent want their country

powered mainly by renewable elec-

tricity to help shift away from fossil

fuels.

During the recent Bonn climate talks

Türkiye’s COP31 Presidency pro-

posed, as part of its Action Agenda,

pursuing a global target of 35 per cent

Continued on Page 2

Geopolitical tensions, supply disrup-

tions and rising demand are driving

fragmentation and slowing progress

across the global energy landscape,

according to the World Economic Fo-

rum’s Energy Transition Index 2026.

The report, developed in collabora-

tion with Accenture, nds that the

global energy transition – dened as

progress toward more sustainable, eq-

uitable and secure energy systems –

has stalled despite record global in-

vestment of $3.3 trillion, including

$2.3 trillion in clean energy. The re-

search points to a growing disconnect

between capital deployment and tran-

sition readiness, which declined for

the rst time in over a decade, sug-

gesting that investment alone is no

longer enough to sustain momentum.

The disruption in the Strait of Hor-

muz has intensied existing pressures

identied in the Index, reinforcing the

degree to which energy systems re-

main exposed to geopolitical shocks,

with import-dependent emerging

economies particularly affected.

“The energy transition is not revers-

ing, but it is fracturing,” said Roberto

Bocca, Head of the Centre for Energy

and Materials, World Economic Fo-

rum. “In a more volatile geoeconomic

environment, security, affordability

and resilience are central to sustaining

progress. Closing the gap between

ambition and delivery will require

stronger foundations, including more

diversied and resilient energy sys-

tems, faster infrastructure build-out,

and capital that can reach markets

where it is needed most.”

The Energy Transition Index (ETI)

benchmarks the performance of na-

tional energy systems across three

core dimensions – security, sustain-

ability and equity – and the readiness

of the enabling environment to sup-

port the transition. Overall ETI scores

remained largely unchanged year-on-

year, reecting a slowdown in global

momentum. Declines in energy secu-

rity and transition readiness – the pol-

icy, infrastructure, investment and in-

novation conditions needed to sustain

long-term progress – offset gains else-

where amid tighter nancing condi-

tions and infrastructure constraints.

Despite growing headwinds, 60 per

cent of countries improved their over-

all scores, although balanced progress

is becoming more concentrated, with

only one in four countries improving

across all three dimensions.

“The energy transition is entering a

more disruptive and challenging

phase, making enterprise resilience

an increasingly important priority for

business leaders,” said Muqsit

Ashraf, Global Lead for Industry and

Enterprise at Accenture. “Organisa-

tions that use technology and AI

to improve adaptability, strengthen

decision-making and respond more

effectively to change will be better

positioned to navigate uncertainty

and sustain long-term growth.”

Nordic countries continued to lead

the ETI rankings, while Singapore

was among the biggest climbers, ris-

ing 10 places in the Index, driven by

new regulation and stronger political

commitment. Advanced economies

held 14 of the top 20 positions, but

progress was uneven and largely

stalled, with overall average scores

rising by just 0.2 per cent year-on-

year. Six G20 economies ranked

among the top 20: Germany (9th),

France (10th), UK (11th), China

(14th), Brazil (17th) and the US

(19th). Among major economies,

China continued to scale clean energy

investment at record levels, India re-

corded one of the strongest gains in

transition readiness, while the US

maintained strong energy security

performance despite slipping modest-

ly overall.

At the regional level, Sub-Saharan

Africa recorded the strongest gains,

while Latin America weakened amid

declining transition readiness. Brazil

remained a regional leader, support-

ed by its strong energy mix. Coun-

tries in the Middle East and North

Africa also saw a notable decline, as

weakening policy commitment and

infrastructure investment weighed

on progress, though Saudi Arabia

stood out with gains driven by signif-

icant nancial backing and renew-

able deployment.

Regional divergence is being shaped

by structural pressures. Global elec-

tricity demand grew by 3 per cent

driven by electrication, cooling, dig-

ital infrastructure and AI, and is

emerging as a dening constraint on

the transition. Emerging economies

account for around 80 per cent of de-

mand growth but continue to face

higher nancing costs and infrastruc-

ture gaps.

Meanwhile, despite record overall

investment, clean-energy capital re-

mains highly concentrated, with

around 75 per cent owing to a small

number of economies, widening the

gap between where capital is de-

ployed and where demand is rising.

The report identies three priorities

for sustaining progress: embedding

security and resilience into energy

system design from the outset rather

than as a response to crisis; unblock-

ing delivery by accelerating grid ex-

pansion and system integration ca-

pacity; and restoring investability

through stable policy frameworks and

targeted capital ows. Countries that

act on all three will be best placed to

turn today’s pressures into a durable

competitive advantage in a shifting

global landscape, said the report.

Energy crisis

triggers action on

energy transition

Milliband: the government

has attracted over

£100 billion of private

investment in clean energy

www.carbonbrief.org

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Junior Isles

The EU must turn its Emissions Trad-

ing System (ETS ) into Europe’s elec-

trication engine, says WindEurope.

The call from the organisation repre-

senting Europe’s wind power sector

came as the European Commission

prepared to unveil its review of the

ETS, alongside its new Electrication

Action Plan. It said the Commission

must ensure ETS-linked funding in-

struments prioritise sectors that can be

electried using commercially avail-

able technologies. This will have the

biggest impact, displacing imported

fossil fuels and making Europe more

energy secure and competitive.

The ETS generated €43 billion in

2025. But today only about 5 per cent

of reported ETS revenues go to indus-

trial decarbonisation. It said this ETS

review is a unique chance to change

that.

WindEurope said the proposal for

the Commission’s ETS review (due

to be unveiled at the time writing)

must deliver a single objective: cut-

ting CO

emissions and boosting in-

dustrial competitiveness by replacing

imported fossil fuels with homegrown

electricity.

In this context, WindEurope called

on the European Commission to

strengthen the ETS architecture and

maintain a clear and predictable carbon

price signal. The Linear Reduction

Factor and free allocation rules must

be consistent with the EU’s overarch-

ing decarbonisation pathway to 2040

and beyond. Crucially, it said the Com-

mission should overhaul the use of ETS

revenues.

WindEurope CEO Tinne Van der

Straeten said: “ETS revenues need to

be channelled into electrication proj-

ects. That’s the way to strengthen

Europe’s competitiveness and sover-

eignty. Electrication immediately

replaces imported fossil fuels with

homegrown electricity and improves

our energy security. Yet so far, ETS

revenues have not been used in the

right way. Take the Innovation Fund:

the money is available, it has simply

not been spent effectively.”

Electricity covers just 4 per cent of

the heat that European industry uses in

its processes. Existing technology, like

industrial heat pumps and electric boil-

ers, could already electrify 930 TWh

of that demand – most of it for heat

below 500°C. The barrier to industrial

decarbonisation via electrication is

not technology, said WindEurope, add-

ing that instead “it is a lack of focus in

how Europe spends ETS revenue”.

While about a third of global electric-

ity generation already comes from

renewable sources, other energy-inten-

sive sectors – mainly transport, heating

and industries – have lagged behind.

Close to four-fths of global nal en-

ergy still comes from fossil fuels, as a

result.

At a recent climate summit in Bonn,

Murat Kurum, Türkiye’s Environment

Minister, who will preside over the

COP31 summit this November with

Australia, called for a target of 35 per

cent of nal energy demand to be met

from electricity by 2035, up from about

20 per cent today.

Kurum said: “By electrifying daily

life, from transport to buildings and

industry, we can protect families and

businesses from volatile energy mar-

kets. This 35 per cent by 2035 target

will be one of the dening priorities of

our COP31 presidency.”

The Australian climate change min-

ister, Chris Bowen, opening the con-

ference with Kurum and the UN cli-

mate chief, Simon Stiell, said cutting

fossil fuel dependence and investing in

clean energy and electrication were

solutions to both worsening climate-in-

duced natural disasters and what he

called “the worst energy crisis in our

history”.

of nal energy demand to be met by

electricity by 2035 – a target that

aligns with IRENA and IEA analy-

sis. The Action Agenda activation

groups are already mobilised to help

advance this priority of the COP31

Presidency through the Plans to Ac-

celerate Solutions.

While electricity currently ac-

counts for around one-fth of nal

energy demand, government and

industry leaders argued that accel-

erating electrication across trans-

port, buildings and industry is one

of the most effective ways to reduce

exposure to volatile global fossil

fuel markets while strengthening

competitiveness, energy access and

long-term resilience.

“The age of clean electrication

is here. The question is whether we

can build the grids and storage, mo-

bilise the investment, and deliver

the infrastructure at the speed and

scale required,” said Guterres at the

London summit.

Commenting on a new brieng –

‘Electrication: why clean power

delivers where coal cannot’ – pub-

lished at the summit by the Power-

ing Past Coal Alliance (PPCA) –

Benoît Faraco, Climate Ambassa-

dor, France, said: “As a leading

country on electrication, France

knows the potential it holds: this is

one of our most powerful tools to

accelerate the transitioning away

from fossil fuels, build our energy

sovereignty, meet our climate tar-

get, and bring value and jobs to our

communities. Yet, the impact of

electrication will depend on the

energy that powers it. This brief

makes clear what developing coun-

tries stand to gain by choosing clean

energy: lower long-run energy

costs, greater energy security, more

resilient grids, and far deeper emis-

sion cuts.”

The importance of energy securi-

ty was reinforced during the Inter-

national Energy Agency’s (IEA)

11th Annual Global Conference on

Energy Efciency in Montreal,

Canada, at the end of June.

Ministers and senior ofcials from

all continents said recent disrup-

tions to global energy markets fol-

lowing the war in the Middle East

had reinforced the need to acceler-

ate energy efciency as one of the

quickest and most effective ways to

lower energy costs, strengthen en-

ergy security and reduce exposure

to future market volatility.

At the conference, the COP31

Presidency announced it is commis-

sioning the IEA to produce a special

report to support the development

of an energy efciency target for

buildings for COP31, which takes

place in Antalya, Türkiye, later this

year.

“As successive energy crises have

shown, energy efciency remains

one of the most powerful tools avail-

able to governments for strengthen-

ing energy security, lowering costs

and boosting economic competi-

tiveness. Best of all, it is a resource

that every country possesses in

abundance,” said IEA Executive

Director Fatih Birol. “The commit-

ments made in Montreal demon-

strate strong international resolve to

put efciency at the heart of energy

policy and accelerate progress to-

wards a more secure, resilient and

sustainable global energy system.”

Discussions at the Global Confer-

ence drew on new IEA analysis and

tools, including an updated Energy

Efciency Policy Toolkit, recent

analysis on how to shield consumers

from price shocks and a new report

on the multiple ways energy ef-

ciency can benet businesses. The

IEA also continues to track efcien-

cy improvements through its Ener-

gy Efciency Progress Tracker.

Continued from Page 1

The world of climate change and sus-

tainability is becoming harder to nav-

igate, as pressure to relax targets con-

tinue to mount.

At the end of June the World Bank

dropped a crucial target for climate

nance following intense pressure

from the US, as the lender’s biggest

shareholder upended decades of glob-

al co-operation on tackling rising

global temperatures.

The World Bank said it would extend

its climate change action plan, but

would “retire” the target that 45 per

cent of its nancing would go to proj-

ects that offered climate “co-benets”.

The move came just months after US

President Donald Trump, who has

called climate change a hoax, pulled

the country from the UN Framework

Convention on Climate Change, the

world’s most important climate treaty.

Last year, the Financial Times report-

ed that the US was pushing the World

Bank and other multilateral develop-

ment banks to nance more fossil-fu-

el projects.

In the face of what appears to be a

waning appetite for driving environ-

mental efforts, corporations are in-

creasingly being accused of “green

hushing”, although the need to reduce

costs, cut emissions and improve ef-

ciency remains.

Asked whether there has been a

slackening off in pressure from inves-

tors to cut emissions while improving

efciencies and cutting costs, David

Pownall, Vice President, Power Sys-

tems & Safety, UK & Ireland, Schnei-

der Electric, said: “Yes, and no. It’s

impossible to ignore what’s gone on,

on the opposite side of the Atlantic.

But fundamentally, I don’t think any-

thing has changed.”

Speaking to TEI Times at an event

on the sidelines of Climate Action

Week in London last month, he added:

“If you look at western Europe and the

UK, priorities come and go… govern-

ments have complexities to juggle that

they are ill-equipped to juggle, yet.

But if you look at businesses, electri-

cation isn’t just about saving the

plant or being environmentally re-

sponsible, it’s an essential.”

With countries around the world

facing tough policy decisions in the

wake of the Middle East war, in late

June, billionaire philanthropist Mi-

chael Bloomberg pledged almost

$300 million to help renewable energy

industry associations counter a

well-nanced oil lobby.

Bloomberg, who is the UN special

envoy on climate ambition and solu-

tions, said that although “clean energy

is now cheaper than fossil fuels in

virtually every part of the world… x-

able obstacles are still slowing down

deployment”.

A recently released report by the

International Renewable Energy

Agency (IRENA) found that installed

renewables generation helped avoid

an estimated $480 billion in fossil-fu-

el costs in 2025. It conrmed renew-

ables are not only the cheapest power

source but are also a “prime geopolit-

ical shock absorber” against fos-

sil-volatile systems to enhance energy

security and economic stability in

energy crises.

The report estimates that more than

90 per cent of the utility-scale renew-

able capacity added in 2025 was

cheaper than the lowest-cost new fos-

sil alternative.

Further, it says the cost advantage of

renewables over fossil fuels continued

to widen. In 2025, Solar PV remained

at its 2024 level of $44 per megawatt

hour (MWh), while wind continued to

improve, with onshore wind falling by

4 per cent to $33/MWh and offshore

wind by 3 per cent to $78/MWh.

European Union member states have

agreed the European Council’s nego-

tiating position on the European Grids

Package, comprising a revision of the

trans-European energy infrastructure

(TEN-E) regulation and a permitting

directive.

The grids package aims to address

the urgent need to modernise and ex-

pand Europe’s energy infrastructure in

order to accelerate electrication and

decarbonisation.

The Council’s position, announced

on June 26th, focuses on improving

cross-border energy infrastructure

planning, streamlining and accelerat-

ing permit-granting, and ensuring a

more secure and resilient energy

network.

“Today’s agreement paves the way

for Europe’s electrication and to-

wards achieving climate neutrality. By

fast-tracking permitting and enhancing

interconnections – including ending

energy isolation for member states – we

are securing affordable, clean energy

and bolstering energy security for all

European citizens,” said Michael Da-

mianos, Minister for Energy, Com-

merce and Industry of the Republic of

Cyprus.

“By delivering on this important and

strategic package, the Cyprus presi-

dency has put in practice the motions

of its motto ‘An autonomous Europe,

open to the world’.”

The Council supports a common

framework for network development

planning across the electricity, hydro-

gen and gas sectors. This would in-

volve a central scenario to be devel-

oped by the European Commission

and based on input from member states

and stakeholders, in order to identify

and address long-term infrastructure

gaps and bottlenecks.

The Council’s position claries that

the central scenario will take into ac-

count national energy and climate

plans, regional specicities, and dis-

parities in energy prices. It will be ac-

companied by sensitivity analyses

conducted every two years to address

market developments and pressing

needs in energy infrastructure.

Notably, energy ministers endorsed

the need for faster and more transparent

permitting procedures, including the

creation of digital portals for simplied

applications and designating electrici-

ty and renewable energy projects as

being of overriding public interest (un-

less proven otherwise), prioritising

their approval.

The Council, under the Irish presi-

dency, will initiate negotiations with

the European Parliament, once the

latter adopts its position. The aim is

to reach a nal agreement on the leg-

islation as soon as possible in 2026.

The European Grids Package was

proposed by the European Commis-

sion in December 2025, to address the

low interconnectivity among member

states and to make the EU’s energy

network t for climate neutrality.

Headline News

European Council backs modernised energy network for decarbonisation

ETS must drive EU

electrication, as UN calls for

increased ambition

n EU ETS revenues need to be channelled into electrication projects

n UN calls for global target of 35 per cent electrication by 2035

Drive to reduce costs, emissions and improve efciency

under growing pressure

Photo by Photo by Rik Mar

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

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Energy has become the largest busi-

ness within Rolls-Royce Power Sys-

tems, growing from around 25 per

cent of revenues in Power Systems

just four years ago to become the

biggest earner within the Power Sys-

tems division. The growth has seen

energy become a signicant part of

Rolls-Royce Group, generating

around 15 per cent of the Group’s

overall revenue.

Last year the Power Systems busi-

ness of Rolls-Royce generated nearly

£6 billion in revenues out of total

Group revenues of just over £20 bil-

lion ($27 billion).

Explaining the changing business at

its recent Power Symposium meeting

in Friedrichshafen, Germany, Tobias

Ostermaier, President Stationary Pow-

er Solutions, said: “In the past Rolls-

Royce was a car company; in the

meantime, its more perceived as an

aero company, but we are denitely on

the way to becoming an aero and en-

ergy company.”

Last year Rolls-Royce Power Sys-

tems delivered more than 10 GW of

installed power. The company says the

trend has largely been driven by data

centre demand.

“We have been able to treble our

business within four years… there is

an insane demand for power solutions

within data centres,” said Ostermaier.

According to the company, the bulk of

its data centre business is in the US.

In an interview with TEI Times on

the sidelines of the Symposium, Vit-

torio Pierangeli, Senior Vice President

Global Power Generation, Rolls-

Royce, said: “About 50 per cent is in

the US, with 20 per cent in Europe, 20

per cent in APAC and less than 10 per

cent in China.”

Most of those installations, said the

company, are for what it calls “simple

data centre solutions”, where data cen-

tres are connected to the grid, with

independent power systems used for

backup. But with grid connections

facing delays, other data centre solu-

tions are now driving the company’s

data centre business.

“What we see now, especially over

the last 12-18 months is that the market

is signicantly changing,” Ostermaier

told TEI Times. “Grid-connected data

centres with backup solutions will still

be the biggest part of the market…but

the requirements are changing towards

different technologies and solutions.

“One part of the market, especially

in the US, is looking more for off-grid

solutions. Here gas engines are play-

ing a major role, so we see this as a

major opportunity where we can in-

stall straight gas power plants, or in

combination with renewables and

batteries as a micro-grid. We love this

complexity, as we have all of the parts

needed to build micro-grids within our

offering.”

To meet the expected signicant

growth in the market, R-R has given

a market guidance that it will grow in

the range of 20 per cent going forward

and Ostermaier says R-R Power Sys-

tems will continue to invest for capac-

ity expansions beyond 2027/28.

Ostermaier also said that other

emerging trends such as “the need for

resilience, grid stability and mi-

cro-grids outside of data centres” will

drive other opportunities.

Earlier this month (July) Rolls-

Royce ofcially opened a new $24

million, 23 225 m

(250 000 ft

) Lo-

gistics Operations Centre in Manka-

to, Minnesota, USA, adjacent to its

existing mtu power generation man-

ufacturing facility. The expansion

will allow Rolls-Royce to more than

double production capacity for its mtu

Series 4000 generator sets, used to

provide backup power for large-scale

critical infrastructure across the Amer-

icas, including hospitals, airports, in-

dustrial sites and data centres.

Siemens Energy, Siemens Gamesa Re-

newable Energy and Wärtsilä Gas

Solutions will soon be operating under

new names.

Following the spin-off from Siemens

AG in 2020 and the company’s suc-

cessful development, Siemens Energy

is now beginning preparations for the

transition to an independent brand.

This move is based on the time-limited

license agreement governing the use of

the brand.

In the future, the current entities Sie-

mens Energy and Siemens Gamesa

Renewable Energy will be united under

a single name and brand umbrella:

Omterra. The rebranding process is

scheduled to begin later this calendar

year and will be implemented in stages.

“Since our spin-off, it has been clear

that the licensed Siemens Energy brand

would be available to us for a limited

period. Today, our company is well

positioned strategically, operationally

and nancially. We have earned the

trust of our customers and the capital

markets, improved our protability,

and have ambitious growth plans for

the years ahead. Against this backdrop

and given that the current brand agree-

ment is time-limited, now is the right

time to begin the transition to our own

independent brand,” says Christian

Bruch, CEO of Siemens Energy.

Meanwhile, Nord Gas Solutions has

been announced as the new name for

the former Wärtsilä Gas Solutions

business. The launch follows the re-

cent acquisition by Mutares SE & Co.

KGaA.

As a global provider of advanced gas

solutions for the marine, biogas, and

energy sectors, the company will fur-

ther strengthen its market presence

worldwide while continuing to devel-

op its capabilities in innovation and

digitalisation under new ownership.

“With this new identity, we are build-

ing on a strong foundation while posi-

tioning ourselves for future growth,”

said Kjell Ove Ulstein, CCO, Nord Gas

Solutions. “Our focus remains un-

changed: delivering high-quality sys-

tems and lifecycle solutions that sup-

port our customers in navigating the

energy transition.”

The brand will be rolled out across

all channels, including digital plat-

forms and customer communications.

The announcement followed news

that Wärtsilä has agreed to establish a

joint venture with German company

RCT Solutions GmbH for its global

Energy Storage business. The owner-

ship structure of the joint venture will

be 50 per cent RCT Solutions and 50

per cent Wärtsilä. At a later stage, new

investors may join the joint venture,

which could reduce the ownership of

the initial shareholders.

The joint venture would include

Wärtsilä’s Energy Storage business

currently reported as a separate seg-

ment. The Energy Storage business

has been the smallest segment within

Wärtsilä, with about 480 employees

globally and net sales of €694 million

with a protability of 3.3 per cent in

2025. Wärtsilä would transfer net as-

sets representing less than 5 per cent

of Wärtsilä’s total net assets into the

joint venture.

“After closing the transaction of the

joint venture, Wärtsilä will be partner-

ing with an experienced player with

strong capabilities in operating an in-

tegrated energy storage business in

challenging market conditions,” said

Håkan Agnevall, President & CEO,

Wärtsilä.

RCT Solutions GmbH is a German

engineering company, founded in

2012, with strong international exper-

tise in solar and battery energy storage

systems (BESS).

“This joint venture is a signicant

step in building a stronger, more com-

petitive global energy storage plat-

form,” said Peter Fath, CEO, RCT

Solutions GmbH.

The Volkswagen Group has entered

into an exclusive arrangement with

Bain Capital for the sale of its majori-

ty stake in Everllence – 51 per cent of

the shares are to be transferred to Bain

Capital. With this transaction, Volks-

wagen wants to signicantly strength-

en the company’s nancial position as

its transformation moves forward. In

the medium term, Volkswagen intends

to remain a major shareholder in Ev-

erllence with a 49 per cent stake.

The envisaged leveraged buy-out

transaction generates proceeds of

about €7.4 billion for Volkswagen.

Everllence, which ranks among the

world’s leading manufacturers of large

engines, turbomachinery and decar-

bonisation solutions, is to continue its

growth in the dynamic markets of glob-

al shipping, data centres and the ener-

gy sector thanks to the new ownership

structure.

Uwe Lauber, CEO of Everllence,

said: “The transaction lays the ground-

work for the sustainable continuation

and further acceleration of our success-

ful growth trajectory.

“Bain Capital’s nancial strength,

strategic expertise and global network

are expected to strengthen our position

to drive innovation, scale up cut-

ting-edge technology and tap into new

markets. At the same time, we are com-

mitted to remaining a reliable partner

for our customers – with the clear am-

bition of making key industries world-

wide more efcient, successful and

climate-friendly.”

The transaction is subject to the

completion of the information and

consultation process in France and

other customary conditions, which

include obtaining the required regu-

latory approvals.

The Science Based Targets Initiative

(SBTI) has published revised guidance

for the more than 11 000 companies in

its voluntary programmes to address

climate risk.

Under the changes, companies can

miss targets if they can demonstrate

science-based “best efforts”, disclose

obstacles and show evidence of action.

The SBTI said greater transparency

about shortfalls would help companies

manage legal and reputational risks.

The organisation does not intend to

publicly identify companies that fail to

meet their targets.

The revised standard also allows

companies to buy certicates linked to

lower-carbon products they have nei-

ther purchased nor made or used.

The revisions have drawn criticism

from campaigners. In a letter to SBTI

Chief Executive David Kennedy, a

coalition of 26 NGOs warned that

making the so-called hourly ener-

gy-matching system optional risked

rendering it “unscientic” and the

standard-setter taking a “permanent

step into irrelevancy”.

The SBTI defended the changes, say-

ing: “The level of ambition is un-

changed; what has changed is the prac-

ticality. This is a standard designed to

be implemented by companies of all

sizes, working in multiple different

sectors worldwide.”

Launched ahead of the 2015 Paris

climate agreement, the SBTI has spent

recent years grappling with how to

remain relevant as companies com-

plain about the cost of moving away

from fossil fuels while scientists sound

the alarm about climate risks as emis-

sions continue to rise.

n In June a Paris court found TotalEn-

ergies must account for its customers’

greenhouse gas emissions, ruling that

it had a legal obligation to disclose its

full climate impact.

SBTI softens approach to

corporate climate targets

New names for major power plant solutions providers

Volkswagen to

sell majority

stake in Everllence

Growth in energy market and data centres

drives Rolls-Royce transition

Data centre electricity demand has been a major driver in seeing Rolls-Royce become more of an energy company.

Junior Isles reports from Friedrichshafen, Germany.

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Companies News

Photo by www.mbm-omega.co.uk

Ostermaier (left) and Pierangli (right) say revenues from data

centre business has quadrupled

its transformers, is being brought un-

der the Noedra umbrella.

Commenting on the introduction,

Chaudhry said: “It’s one third to do

with rebranding of our old products

but two thirds is completely new ar-

chitecture and framework that does

not exist in the industry.”

The Noedra ecosystem allows data

to be connected across all of Siemens

Energy’s suites. To enable a coherent,

future-ready digital grid.

Chaudhry explained: “You can now

connect monitoring data with Noedra

and use it for operation. In the past,

monitoring data was decoupled and

never used in real-time operation. If

you are creating images and videos

with cameras and drones to analyse

your assets to create digital twins of

these assets, this can also be connect-

ed with Noedra. So, all the data

needed to run the grid efciently,

safely, with good availability can be

connected. That’s why Noedra is such

a unique framework.”

The change in approach was pre-

dominantly driven by the sector it-

self. Three or four years ago, Siemens

Energy was perhaps more identied

as a producer of equipment like

generators, turbines, transformers,

switchgear, and providing solutions

to make these products smarter. To-

day it has to be much more than an

equipment supplier; it has to be a

solutions provider.

“You could buy a transformer with

sensors and a monitoring device to

make it an intelligent transformer.

You cou ld d o th e sam e wit h switc h-

gear or any other product. This is

what we have been doing in the past,”

said Chaudhry. “But the grid is run-

ning at its limit, and with the boom in

electrication, data centres and ev-

erything else, grids are a bottleneck.

Customers are now saying it’s no

longer enough to look at siloed prod-

ucts like transformers or switchgear.

needs to change, he says.

“In the future, if there is a crisis

situation or if there are contingencies

where you have to act fast using a

system that is highly automated, you

don’t have the freedom like in the

past where you have a dispatch plan

for tomorrow, can do the stability

studies ofine, and then evaluate

what’s possible,” said Chaudhry.

“Basically, for the grid of the fu-

ture, where the network is highly

loaded and volatile because of re-

newables and other changes, it is no

longer possible to run power system

studies and power system evalua-

tions ofine. Ofine meaning run-

ning those studies in a separate de-

partment with separate data sets,

while running the grid and control

centre with completely different data

sets. This data has to be combined

because in the future you will need to

act much faster.”

Operators therefore require a frame-

work that enables them to connect

live operational data from the grid

with simulation model data in order to

maintain power system stability.

Chaudhry added: “For example,

there must be a framework that allows

you to gure out, in real-time, if you

can overload your transformers with-

out risking their availability or integ-

rity. Operators need the capability of

knowing in real-time when they can

use the capacity from their assets

instead of using a paper-based evalu-

ation that is just based on static limits.

This is what was done in the past.”

As more intelligence is built into the

grid, data must be connected, he said.

“The energy industry is waiting for its

TCP/IP or internet moment where

everything became connected.”

Siemens Energy has worked on

digital solutions for the last decade

but to meet the new and future chal-

lenges, everything, including existing

digital brands such as Sensformer for

lectricity grids are key to the

energy transition. Yet the chal-

lenge facing grid operators in

terms of delivering grids capable of

handling a future generating mix that

will look quite different to the base-

load centralised systems for which

grids were designed, is a challenge.

Digitalisation of the grid has a key

role to play in meeting the challenge.

Recognising the importance of digi-

talisation, Siemens Energy has long

been investing in technologies that

not only make grids smarter but also

help operators to plan, design, and

operate them.

The company recently took a

completely new approach to grid

digitalisation with the introduction

of its Noedra digital ecosystem – the

Mind of the Grid – inspired by the

ancient Greek word ‘Noesis’.

Adnan Chaudhry, Senior Vice

President of Digital Grid at Siemens

Energy, explained: “It’s a learning,

evolving system with the capability

of putting complex information in

the right context and presenting it so

people can understand it.”

The system brings together intelli-

gent solutions – from sensing and

control systems, to software and advi-

sory – into one connected ecosystem.

By transforming data from across the

grid into clear, coordinated, and con-

dent action, Noedra helps operators

work smarter and faster in an increas-

ingly complex energy landscape.

Using experiences from the utility

sector, Noedra adopts what Chaudhry

says is “a completely new approach”.

He explained: “I spent eight years in

the utility industry as a power system

planner, using data sets for simula-

tion models; then I went to substation

operations, which had completely

different data sets. I then moved to

the operations control centre, where

you run and control the entire grid,

and again we worked with a different

set of data.

“All of the data in the grid – whether

generation or consumption – are in

silos, not connected to each other.

And there are 20 different ways of

modelling a transformer, depending

on how it is needed, but sometimes

the data between the models is not

consistent… you don’t need all the

information for every model but

the data consistency between the

different information sets is crucial.”

He noted that for the grid of the fu-

ture, an operator will need, for exam-

ple, predictive maintenance, optimis-

ation of the usage of the asset, and be

able to automate running of the grid.

The existing way of doing simulation

ofine and operating the grid and

control centre using different data sets

Special Technology Supplement

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Digitalisation of the grid is key in meeting many of the challenges facing the electricity sector. Siemens Energy

has introduced the Noedra ecosystem in a move to bring together all of its grid digitalisation solutions. It has also

opened a new Grid AI Lab to help its customers utilise the full potential of articial intelligence. Junior Isles speaks

to Siemens Energy’s Adnan Chaudhry.

A new approach to

spreading intelligence

Chaudhry: “It’s a learning,

evolving system with the

capability of putting complex

information in the right

context and presenting it so

people can understand it.”

the potential efciency gains, it has

to look at the system from end-to-to-

end.

“We saw that there was no frame-

work that allowed our customers to do

this, because all the data was siloed,”

said Chaudhry. “This is what led to the

Noedra concept. It also meant repur-

posing our products, which meant

completely changing the data archi-

tecture of the previous transformer –

something we have been doing for

two decades.”

Siemens Energy therefore had to

build a data architecture so data can

be exchanged between transformer

switchgear to allow an entire substa-

tion to be monitored. To provide

solutions for overhead lines, in early

June Siemens Energy acquired

Camlin Group, a Northern Ire-

land-based specialist in grid moni-

toring, analytics and asset digitalisa-

tion technologies.

Commenting on the acquisition,

Chaudhry said: “We bought a sensor

company for overhead line sensors to

allow dynamic line rating. So even for

equipment we don’t produce, in order

to give the customer value, we added

portfolio elements into our Noedra

application so we can digitalise en-

tirely from end-to-end.”

Notably, information systems from

other vendors can also be integrated

into the Noedra ecosystem. So, the

entire system can be viewed using

one framework.

“This means all the information is in

one location so all information can be

handled in the same way,” noted

Chaudhry. He explained why this is

important. “In a critical situation you

don’t want to have go to a different

screen where the menu is different, or

have to nd different functionalities

at different menu points.”

Noedra works like an app-based

system, similar to an iPhone, where

the look and feel can be customised

and certain apps can be integrated

with everything being available to run

from a central Noedra system.

While this is traditionally opera-

tional data, another layer has been

added to complement live informa-

tion gathered from sensors. But,

particularly in extreme weather sce-

narios, this is insufcient for the grid

of the future.

Noedra therefore also uses data

from cameras, weather satellites and

weather information systems. “We

even worked with weather scientists

to work out how we can embed these

information systems for grid opera-

tion,” said Chaudhry. “For example,

if there is a camera on your overhead

line, we can combine visual informa-

tion with temperature sensor informa-

tion so that if there is sagging, because

it’s a hot day and there is no wind for

cooling, we can reduce the loading of

the line so it does not come into con-

tact with trees under the line and

thereby reduce the risk of wildres.”

Noedra currently comprises four

suites – Noedra Flow (Nf), Noedra

Node (Nn), Noedra Shield (Ns) and

Noedra Atlas (Na). Each of these

represents a different application

within the grid: protecting, sensing,

structuring, and guiding the grid.

“We started with four suites, but we

can add; it’s an evolving learning

system, Chaudhry noted. “We are

already working on a fth suit, which

we will hopefully launch in a year or

two at the latest. And we will also

grow the [existing] suites.”

The suites are basically the rst

identication layer of Siemens Ener-

gy customers and operators, chosen to

allow them to more simply identify

the area of application.

Nn is focused on the substation,

designed to boost grid reliability

through substation digitalisation

solutions. The substation is essential-

ly a node in a network, so everything

in the substation that an operator

might need to monitor, manage, and

optimise can be found in the Nn suite.

“Whether it is a camera or vi-

sion-based system, a monitoring sys-

tem, SCADA (supervisory control

and data acquisition) or HMI (human

machine interface) system or control

and protection system, you will nd

under Noedra node,” said Chaudhry.

“Any digital products for the trans-

former, switchgear and even un-

manned robots that move around the

substation will be under Nn.”

Noedra Node integrates sensing,

inspection, predictive analytics, pro-

tection, and automation into a single,

coordinated layer of intelligence. It

transforms substations from isolated

technical assets into self-aware, intel-

ligently supervised systems (digital

substations), able to monitor their

own condition, anticipate risks, and

support faster, more condent opera-

tional decisions.

Network nodes are connected by

lines. Items related to the lines fall

under the Noedra Flow (Nf) suite.

Line monitoring, diagnostics and

inspection, for example, are all under

the Nf suite. “We call it Noedra Flow

because it relates to anything that en-

sures power is owing around the line

and through the line itself,” said

Chaudhry.

The third suite, Na, is designed

around grid planning. “The grid

consists of thousands of lines and

nodes, and this provides a map for

operators to handle everything around

power system planning as well as

the analytics,” Chaudhry noted.

The Atlas suite delivers energy ad-

visory services with the strategic

clarity, technical assessment, and the

planning expertise needed to design

resilient, efcient, and future-ready

energy systems.

The fourth suite, Ns, covers all the

protection solutions related to the grid

for ‘cyber-physical’, i.e. both physical

and cyber resilience.

“Typically, in the past, the industry

was mainly talking about cyber secu-

rity – patch management and ensuring

cyber-secure grids, etc. But with No-

edra Shield, since we are working

with camera-based systems for sub-

stations and lines, etc., we also added

physical security. We can use these

cameras to detect if someone is trying

to target the grid. And since the infor-

mation systems and data sets are all

combined, the robot that is doing op-

eration inspection, could also be in-

structed to investigate through a

physical inspection.”

The use of articial intelligence

(AI) was central to building Noedra

and is key to its operation. Building

the framework required a rethink of

how Siemens Energy structures and

uses its data.

Chaudhry explained: “We worked

with Nvidia and two other compa-

nies to implement a completely new

data architecture, with new data ag-

gregation and data handling possibil-

ities that did not exist in the energy

industry. Since we were doing it, we

also made it AI-enabled.” This

means that many of the applications

within the Noedra suites can also

utilise AI because all the data is

suitably structured.

Siemens Energy says it is already

They are asking: ‘what happens if I

have a capacity limitation and need to

get more from the assets? I can put

sensors on a product, but what does it

tell me and how does it help me if I

just look at one individual product?’”

When transferring power from one

point to another, there is a substation

at point A and point B, and all their

associated equipment, with a trans-

mission line in between. If a utility

wants to digitalise in order to realise

Special Technology Supplement

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Siemens Energy’s Grid AI lab in Orlando opened earlier this year

Siemens Energy had to build

a data architecture so data

can be exchanged between

transformer switchgear,

allowing an entire substation

to be monitored

Siemens Energy Board

Member Tim Holt (centre) and

Adnan Chaudhry welcome the

Camlin Group Management,

Peter and Michael

Cunningham to the team

suites and layers within Noedra.

“We are working on a kind of ‘Mi-

crosoft co-pilot’ for the grid, said

Chaudhry. “If you look at Noedra

Node, for example, everything you

need to run the grid and the assets is

connected. If you want to know

whether there are any issues, alarms,

or even when to perform the next

maintenance on a specic transform-

er in a particular substation, you

don’t have to look at many structures.

You could simply open the AI Noe-

dra Assistant, or Knowledge Base as

we call it, and ask it simple unstruc-

tured questions like ‘when do I have

to service transformer ‘x’?’ And

based on the data, it will give you the

information.”

AI has also been used extensively

to create digital twins, with Siemens

Energy working with Nvidia for ve

years in total on this technology. It

has spent three of these years build-

ing the right language models for

creating digital twins of transform-

ers. In overhead lines, AI is proving

to be invaluable. AI-based models

have been trained to analyse infor-

mation gathered from drone inspec-

tions to detect faults.

Chaudhry said: “The more AI-mod-

els are trained, they can detect many

things far faster than humans. Even a

simple 1 cm crack in a [cable] insula-

tor, which no human eye could see at

a few metres from a helicopter, can be

detected much faster with the camera

and analytics.”

Earlier this year Siemens Energy

opened a new facility for using AI to

improve electric grids. Located next

to the company’s Innovation Centre

Orlando, the new Grid AI Lab inte-

grates Nvidia AI infrastructure with

Siemens Energy grid expertise to

train AI models that will enable

utilities to better manage their grids

in real-time, optimising operation

and grid maintenance.

Siemens Energy is building contin-

uously evolving digital twins of

physical infrastructure with Nvidia

Omniverse and Metropolis libraries.

These digital twins allow engineering

teams to visualise, simulate and col-

laborate in a shared digital environ-

ment, analyse asset conditions, visu-

alise asset behaviour and simulate

future operating conditions. The AI

applications, alongside work in aca-

demic and applied research, will open

up entirely new opportunities to use

the data from the power grid to ad-

dress some of the challenges in the

changing energy landscape.

Projects in the AI Lab are already

seeing Siemens Energy collaborate

with customers and universities, the

two main universities being the Uni-

versity of Central Florida and Georgia

Institute of Technology. It is also in

discussions with national labs and

research institutes such as the Electric

Power Research Institute (EPRI).

“Using articial intelligence, we

will be able to analyse the electrical

grid in new and powerful ways and

help to make it safer, more reliable

and more efcient,” said Chaudhry.

“We built this lab to provide a collab-

oration environment where custom-

ers, partners, universities and indus-

try leaders will come together to

co-create, experiment and accelerate

the application of AI to real-world

grid challenges.”

Siemens Energy will work with

customers to deploy and integrate

advanced sensing technologies across

the electrical grid, combining data

from grid-connected assets with aeri-

al and geospatial data acquisition

technologies. This multi-source data

will be analysed at the new Grid AI

Lab to develop and validate AI driven

insights that support grid planning,

operations, and resilience – helping

utilities operate the grid more ef-

ciently and strengthen preparedness,

response, and recovery for extreme

weather events.

There are a number of projects al-

ready being carried out at the lab,

one of the most interesting being an

AI-based intelligent solution called

Grid Assist. In critical grid situations

it allows instantaneous, automatic,

re-dispatch or change of loads to

avoid an outage.

Chaudhry explained: “Following an

outage, you might discover that the

parameters for protection, for exam-

ple, are outdated and not based on the

latest changes in the grid. This can be

one of the causes of some blackouts.

Grid Assist looks at the current data it

has, not solely the parameter settings,

and will override the parameter set-

tings if necessary.”

Such futuristic technology will take

some time to be implemented in the

energy sector, but Siemens Energy

has a plan for developing them in the

new AI lab.

“The AI lab has what I would call

three buckets: one is for futuristic

ideas we develop; one for projects

that can be implemented in a 2-3-year

timeframe, such as Grid Assist; and

another for using AI and data analyt-

ics to meet today’s needs. The initial

plan was to split the time and resourc-

es equally between the three areas but

current drivers such as the data centre

boom in the US, means most of the

activities in the lab are currently fo-

cused on our customers’ immediate

needs,” said Chaudhry.

Much of the ongoing work is in

creating digital twins, building the

learning models, and training the AI

knowledge-base with the data sets.

He gave an example: “When you y

a drone or helicopter over a grid, you

generate 100s of terabytes of data.

This is then analysed in the lab and

used to create training models for the

AI.”

Chaudhry sees imaging and inspec-

tion as the rst area that the AI lab will

benet the power industry. This will

provide utilities with much needed

visibility of their grids. With 80-90

per cent of grid outages caused by

incidents such as short-circuits or

ashovers from an overhead line to a

tree, introducing digitalisation and

intelligence in this area can be a big

benet to grid operators.

As grids become more complex,

managing that complexity will be-

come an increasing challenge. Sie-

mens Energy sees the work at its AI

lab and the Noedra ecosystem as the

rst step in meeting this challenge.

As Chaudhry put it: “We are bring-

ing vision to reality step-by-step.”

using AI in different applications,

where all the connected modules

have enhanced capability. AI is used

in data collection, creating digital

models and allowing information and

analytics to be shared across all the

Noedra Node integrates sensing, inspection, predictive analytics, protection, and automation into

a single, coordinated layer of intelligence

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Special Technology Supplement

The new Grid AI Lab

integrates Nvidia AI

infrastructure with Siemens

Energy grid expertise to train

AI models that will enable

utilities to better manage

their grids in real-time,

optimising operation and grid

maintenance

Carbon pricing raises costs for most

companies, and new rules are forcing

rms to rethink how they generate

revenue. Technology risk is the sec-

ond most impactful category. Clean

energy technology, along with AI

both managing the grid and adding

new demand on it, is displacing lega-

cy infrastructure. Market risk comes

third by impact. Fossil fuel demand

declines and renewables grow, shift-

ing the supply and demand picture

that rms have long relied on. Legal

and reputational risk is fourth, smaller

in dollars today but growing quickly

through litigation and stakeholder

pressure.

The dashed box at the bottom is

“just transition’ risk. It refers to the

human cost of shifting to a green

economy, especially the impact on the

workforces and communities that rely

on fossil fuels. It is still emerging as a

category, but worth tracking. The

chart highlights that physical damage

is only the visible half of the bill. The

ince late May, western Europe

has been hit by one heatwave

after another. The sweltering

heat has been causing human losses

and economic havoc, including higher

electric power prices and train trans-

port disruptions.

Insurance rm Allianz warned that

repeating the ve hottest years from

2014 to 2024 across 2026 to 2030

would drive cumulative GDP losses

to as much as 7 per cent in France,

Germany, Italy and Spain, a recent

Financial Times article emphasised.

The same article noted that nancial

rm MSCI found that of 11 215 listed

companies, 99.8 per cent face a ma-

terial nancial risk from extreme

heat, yet ‘the world is not pricing

climate risk,’ said MSCI’s CEO.

More broadly, between 1995 and

2024, more than 9700 extreme

weather events caused around $4.5

trillion in direct losses worldwide,

adjusted for ination, according to

Germanwatch’s Climate Risk Index

2026. Storms alone accounted for

$2.64 trillion of that.

The scale of losses from physical

and transition risk is a true economic

reckoning for energy rms. Climate

risk for energy and other companies

splits into two broad types.

Physical risk is the direct damage

caused by extreme weather. The chart

Navigating Climate Risk shows some

of the main triggers, from heat and

drought to storms and ooding,

wildres and rising seas, through to

slower-moving issues like permafrost

thaw and ocean acidication. Nature

loss belongs here too: as ecosystems

degrade, so does the economic value

that depends on them.

Transition risk is the cost of shifting

to a low-carbon economy. It typically

commands fewer headlines as it is

much less visible. The chart breaks it

into four sub-categories, ranked by

how heavily they may impact energy

companies today. Policy and regula-

tory risk has the greatest impact.

other half, transition, is where rms

are least prepared, not because they

are unaware but because it sits low on

the priority list, even as banks, insur-

ers and regulators increasingly de-

mand answers.

The costs of climate change are al-

ready vast and mounting. Physical

risk alone will cost the world’s largest

listed companies roughly $1.2 trillion

a year by the 2050s, according to S&P

Global Sustainable1, with electric

utilities set to take the hardest hit,

about $4.6 billion per annum (see

chart).

At the global level, the numbers are

larger still. Moody’s puts the econom-

ic hit from physical climate risk at up

to $41.4 trillion by 2050, or a 14.5 per

cent loss in global GDP, with two-

thirds coming from chronic pressures

such as sea level rise and productivity

decline rather than headline disasters.

A Potsdam Institute study in Nature

reaches a similar order of magnitude,

estimating the world economy is al-

ready locked into around $38 trillion

in annual damages by 2050, even

with sharp emissions cuts from today.

Transition costs are signicant too.

Unlike climate change costs, transi-

tion costs can be partially or wholly

mitigated through targeted invest-

ments. The International Energy

Agency (IEA) estimated in late 2023

that clean energy investment needs to

reach roughly $4.5 trillion a year by

the early 2030s, up from $1.8 trillion

in 2023, to keep 1.5°C in reach, a

target most now consider unachiev-

able. McKinsey in 2022 projected

that the wider transition bill would

reach around $9.2 trillion a year in

physical asset spending through

2050.

The many examples of physical and

transition risk reshaping corporate

strategy grow by the month. Two re-

cent cases illustrate these risks: Ger-

man multinational energy utility

RWE in Europe, where the courts are

redrawing the boundaries of corporate

liability, and Japanese energy giant

JERA in Asia, where the economics

of the transition are quietly repricing

fossil-fuel assets.

In May 2025, the Hamm Higher

Regional Court in Germany dismissed

a decade-long lawsuit brought by

Peruvian farmer Saúl Luciano Lliuya

against RWE, the country’s largest

power producer. Lliuya had argued

that RWE’s historical emissions con-

tributed to glacial melt above his

hometown of Huaraz, raising the risk

of a catastrophic ood. He sought

around $20 000, a proportional share

of the cost of protective ood works,

based on RWE’s roughly 0.5 per cent

share of global industrial emissions

since the industrial revolution.

The case was dismissed on the facts,

the court nding insufcient ood

risk to his specic property, but the

ruling was a landmark. For the rst

time, a German court accepted the

principle that major emitters can be

held liable for climate-related damage

abroad, in proportion to their contri-

bution to global emissions. Legal ob-

servers described it as lighting the

fuse for a wave of similar claims.

Over 3000 climate cases have now

been led globally by end 2025, per

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Decarbonisation Series

The other half of corporate climate risk

Navigating Climate Risk

Columbia University’s Sabin Centre,

with over 60 “polluter pays” suits

against fossil fuel and utility rms.

RWE accepted the ruling. The prece-

dent, however, applies across juris-

dictions with similar legal frame-

works, including the UK, the

Netherlands and Japan.

JERA, a 50/50 joint venture be-

tween TEPCO and Chubu Electric, is

Japan’s largest power generator, sup-

plying roughly 30 per cent of the

country’s electricity from around 67

GW of capacity. As of nancial year

2023, 97 per cent of that capacity is

fossil fuel -based and just 0.2 per cent

of its domestic generation is renew-

able. Rather than pivot, JERA is

doubling down. In 2025 alone it

signed 5.5 million tonnes per year of

new long-term US LNG contracts

and continues to promote ammonia

and hydrogen co-ring to extend the

life of its coal plants, technologies

that remain unproven at commercial

scale.

The strategy is exposed on two

fronts. A November 2025 study in

Energy Strategy Reviews estimates

that Southeast Asia’s coal red plants

could face $85 to $123 billion in

stranded-asset losses by 2060, with

early strandings beginning around

2042. Separately, IMF modelling

published in January 2026 nds that

a quarter of Asia-Pacic coal capital

stock could become stranded if the

transition accelerates. Global LNG

supply is entering its largest-ever

growth phase, expected to squeeze

trader margins. JERA’s model banks

on economics and technologies

moving in its favour. Neither is

guaranteed.

These are only two illustrations

among thousands of examples. Ener-

gy rms may take two pathways:

execute a clear transition strategy or

remain passive and only take action

once it is too late. Given the scale of

nancial exposure, waiting is the

more expensive option.

Prepared for The Energy Industry

Times by Joseph Jacobelli of actE, a

climate business and nance insights

platform (asiacleantechenergy.com).

Joseph Jacobelli runs Bourne Impact

Capital and has spent more than 35

years in energy markets. He also

works to advance sustainable nance,

hosting the Asia Climate Finance

Podcast and writing two books, most

recently ‘Powering the Unstoppable

Green Shift’.

Physical risk financial impact

S&P Global 1200 Companies: physical risk-related nancial impact per year by the 2050s

Navigating climate risk: an energy sector strategic framework

Energy and other corporations are becoming increasingly aware of the climate-related risks they face. The European

summer heatwaves and a new analysis are only two of the many signs shining a light on the scale of losses from

physical damage alone. But that is only the visible half. The costs rms tend to underprice or overlook are still to come.

Joseph Jacobelli explains.

s generation, transmission and

grid operations become

more digitised and intercon-

nected, cyber risk increasingly man-

ifests itself as an operational threat

with real-world consequences – out-

ages, safety incidents, delayed re-

covery and arguably, most import-

ant, loss of public trust.

For energy companies and asset

owners today, selecting the right cy-

ber security approach is critical –

business critical. Beyond traditional

threat detection, organisations need

to balance deployment exibility,

risk mitigation and visibility, while

an increasingly stringent regulatory

environment also means compli-

ance at the very highest level.

Disruptions across global energy

systems – often aimed at renew-

ables – have shown that attacks do

not necessarily need to take down

the grid to be effective.

Take the co-ordinated cyber attack

on Poland’s energy infrastructure

late last year when 30 renewable

energy facilities – wind, solar PV

farms and several renewable energy

generators among them – were tar-

geted. The perpetrators, reportedly a

Russian military-linked hacking

group, deployed wiper malware that

destroyed data on computer sys-

tems, corrupted rmware on opera-

tional technology (OT) devices, and

damaged remote terminal units

(RTUs).

While the timing wasn’t optimal,

given the risk of the grid going

down during a bitter winter, the at-

tack failed to cause major outages

with systems continuing to produce

power. There was, however, still a

serious consequences with disrupt-

ed communication between facili-

ties and operators unable to remote-

ly monitor or control assets.

So, while total grid failure was

avoided, it highlighted the opera-

tional risks of an attack.

This high prole case was seen

widely as one of the rst co-ordinat-

ed attacks on renewable energy

plants. CISA, the US cyber defence

agency, published an alert, high-

lighting OT/ICS lessons from the

CERT Polska report published in

January, while the UK’s National

Cyber Security Centre issued its

own warning.

It is concerning that the CERT Pol-

ska report concluded that the attack-

er’s activities, “indicate a strong in-

terest in the energy sector and

capabilities to attack industrial de-

vices”. For energy operators it’s a

chilling reminder of the threats they

face. It shows that cyber criminals

are wising up to the potential im-

pact of targeting critical energy in-

frastructure – particularly distribut-

ed assets – where operational

resilience is critical. Once consid-

ered small fry, wind and solar

farms, battery storage, heat and

power plants, even electric vehicle

charging infrastructure, are now in

the ring line.

This shift is signicant as renew-

able energy infrastructure scales.

Renewable generation, storage and

grid automation all promise ef-

ciency and sustainability, but they

also introduce new attack surfaces

in the form of digital control tech-

nologies and points.

Digitalisation is the foundation to

managing wind farms, solar and

battery storage sites, for example.

They now rely on interconnected

control systems like SCADA and

broader OT to monitor perfor-

mance, remotely control assets and

maximise uptime.

We are already seeing threats

emerging in the form of a new class

of malware developed to exploit in-

dustrial environments. IOCON-

TROL is just one example; a modu-

lar cyber weapon observed in

targeted attacks against critical in-

frastructure.

Designed to inltrate and control

everything from industrial routers

to human-machine interfaces and

programmable logic controllers, it

operates with stealth and precision.

By leveraging legitimate protocols

like MQTT – commonly used for

machine-to-machine communica-

tion – it blends in with normal traf-

c, evading traditional detection

methods. Its modular design also

means it can adapt to different envi-

ronments with little or no effort,

making it highly portable across

different energy assets.

Energy operators often share com-

mon SCADA architectures across

systems, which, while operationally

efcient, becomes a liability when

malware is used to exploit these ar-

chitectures. Then factor in third-par-

ty suppliers and supply chain at-

tacks, and the risks start to multiply.

There is too much trust in vendor

connectivity – and not just in the

energy sector – and limited insight

into internal OT communications.

Failure is not always obvious on

day one; it accumulates and eventu-

ally becomes a major operational

disaster.

Attackers that gain a foothold via

one vulnerable device or connec-

tion, can then move across, escalate

privileges and take control of criti-

cal systems. In some cases, the

command infrastructure can even be

buried within the OT network, long-

term without raising alarms.

For operators and asset owners, the

consequences are all too clear and

the risks far too great. Even ‘limited’

compromises, such as control system

interference, can slow down efforts

to restore systems, and amplify the

impact of system failures.

Operational downtime and disrup-

tion to services from an attack are

often the tip of the iceberg for ener-

gy operators. Sadly, the conse-

quences go much deeper if you fac-

tor in nancial loss.

Unplanned operational downtime

can cost upwards of $125 000 per

hour, according to IBM’s Cost of a

Data Breach report with the indus-

trial sector in third place for breach

costs among the 17 industries stud-

ied. On average, data breaches cost

industrial organisations 13 per cent

more than the $4.88 million global

average.

When you start to add it all up, you

begin to understand the real-world

nancial consequences. When you

consider that a 98 MW wind turbine

site could lose $1.9 million from just

a week of downtime, it starts to hit

home.

Compliance is another operational

consideration, but it’s becoming

more and more complex. In bank-

ing, cyber security is seen as core

operational risk and Boards are

personally responsible. This respon-

sibility drives budgets, robust cyber

resilience and continuous oversight.

Energy has not fully reached this

point where cyber security is treated

as a core operational risk. We are

building highly decentralised, digi-

talised energy systems that we de-

pend on, but in many cases, it’s still

treated as an IT issue rather than a

leadership responsibility.

Yet, times are changing. The UK

has just changed the rules for ener-

gy cyber security, and it is good

news for operators and asset own-

ers. Cyber security will become a

board and CEO problem, not IT.

This means that cyber risk in the

sector will now sit on the same line

as safety and nancial risk.

The government’s new Energy

Sector Cyber Security Strategy

(2026–2030), jointly issued by

DESNZ, NCSC, Ofgem and NESO,

moves the goalposts. If you own or

operate renewable generation, stor-

age, or grid-connected assets, this

lands on your desk. The strategy ex-

plicitly extends baseline cyber resil-

ience to operators not currently un-

der NIS, with proposals for all

Ofgem licensees by end of 2027.

Operators will need to accelerate

protection of their most critical

assets.

The bottom line is that this is

shifting from “are we required to?”

to “can we prove it in nancial and

compliance terms?” That’s the con-

versation energy operators – and the

sector as a whole – should be hav-

ing now, ahead of the deadline rath-

er than chasing it. Cyber security

can no longer be an afterthought.

Protecting global energy infra-

structure requires a proactive and

holistic approach to cyber security,

which acknowledges the risks of

digital transformation and the con-

sequences of failure. By prioritising

cyber security at every level, the

sector can ensure resilient, reliable,

and secure energy systems that sup-

port a stable and sustainable future.

Rafael Narezzi is the Co-Founder

of Centrii (formerly known as Cy-

ber Energia) and an OT cyber secu-

rity expert.

For decades, cyber risk in the energy sector was treated as a technical problem – something to be managed by IT

teams, addressed through compliance checklists, or discussed only after a major incident. Centrii’s Rafael Narezzi

argues that this framing no longer holds and that energy leaders need to rethink their cyber security strategies.

When cyber risk becomes

an operational risk

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Technology Review

Narezzi: Protecting global

energy infrastructure requires

a proactive and holistic

approach to cyber security

THE ENERGY INDUSTRY TIMES - JULY/AUGUST 2026

Final Word

ou could be forgiven for think-

ing this was something to do

with Beyoncé and Jay-Z. In-

stead, it was part of the discussion at

this year’s Eurelectric Power Sum-

mit. A bit of ‘The Carters’ minus the

glamour, but just as interesting.

With the European Commission due

to unveil its Electrication Action

Plan on July 17th (just days after the

time of writing), the summit, held in

early June, focused on the importance

of electrication in driving decar-

bonisation and delivering energy se-

curity during these uncertain times.

Discussions were framed around

two major projects – industrial elec-

trication and articial intelligence

(AI) – launched during the event.

Opening the conference, Kristian

Ruby, Secretary General, Eurelectric,

said: “…In recent years we’ve seen

that access to electricity is literally a

matter of life and death. From the

front lines of Donbas to the smelters

of Dunkirk, from the data centres in

Dublin to the devices in our homes

and hospitals… electricity is bringing

power to life.”

With ‘Bringing Power to Life’ being

the headline theme, Ruby stressed

that the current geopolitical landscape

is putting Europe’s “way of life under

threat”, and that the bloc needs a clear

answer to foreign energy dominance.

That answer, he said, is European

electric power.

“Industrial strength is of essence in

this new world. Europe must answer

the call from its industrial base. Make

sure that it stays competitive on its

way to climate neutrality. We want

decarbonisation, not de-industriali-

sation,” he said. “As the electricity

sector, we have strong ties with our

industrial partners. But sometimes in

life, we know that even the closest of

relationships can need some new

energy.

“So, over the past year we sat down

with our industrial partners for a bit

of couple therapy… And out of these

difcult discussions… we found that

if we invest in the relation, if we in-

novate and co-create, we can turn

troubled ties around and re-emerge as

vibrant electric power couples.”

According to a new report – ‘Pow-

er Couples: Enhancing Industrial

Competitiveness Through Electri-

cation’, unveiled on the rst day of

the summit – electrication already

represents a competitive advantage

for Europe, but scaling up requires

better alignment across system levels.

The report from Eurelectric and

Accenture, which draws on more than

3500 market signals across 61 com-

panies and 30 documented projects,

identies what makes an industrial

project successful and what holds

back deployment. It concludes that

the barrier to scaling electrication

across European industry is no longer

technology – it is system execution,

the ability to turn viable projects into

investable ones quickly enough.

To identify key barriers and shape

common solutions, the European

power sector engaged with industry

players from three different segments:

low- and medium-temperature heat,

energy-intensive industries and data

centres.

The resulting report identies ve

replicable models working as ‘Power

Couples’: integrated industrial part-

nerships models that jointly optimise

demand, low-carbon supply, infra-

structure and exibility.

In a ‘Power Couples’ model, one

load anchors long-term clean power,

another shifts demand when prices

spike, a third provides fast balancing,

and all of them share infrastructure,

risk and system value. They operate

through commercial structures such

as long-term PPAs, Heat as a Service,

Energy as a service, waste-heat

offtake, exibility revenues or blend-

ed public-private nancing.

In his opening speech Ruby also

stressed the importance of AI in

speeding up the energy transition,

optimising grids, integrating clean

power sources and serving new load.

The massive increase in renewables

along with industrial electrication,

and the transition from a centralised

system to a decentralised one calls for

digitalisation and AI. Indeed, AI is

already reshaping every part of the

utilities value chain – from genera-

tion, transmission and distribution,

right through to energy trading, retail

and delivering capital projects with

lower risk.

AI represents a unique opportunity

to boost Europe’s competitiveness.

Its rapid uptake is reshaping both

electricity demand and power system

operations.

On the one hand, AI is driving sig-

nicant new demand for electricity,

with data centres expected to account

for around 28 per cent of the growth

in European electricity demand by

2030. This underlines the need to

align the expansion of AI infrastruc-

ture with the readiness of the power

system. On the other hand, AI is be-

coming a key enabler to manage the

power system’s complexity.

During the summit Miguel G. Tor-

reira, Global Utilities Strategy Lead,

Accenture, shared results of a survey

on what electricity executives think

about AI adoption. The survey found

that although the investment in AI is

real and accelerating, “uncomfortable

gaps” are starting to emerge.

Torreira noted: “Every utility in this

room is investing in AI. [But] Most

are yet to see any returns from it, and

almost none have actually asked their

employees what they think about it.”

A key nding from the survey of

C-suite executives from 3650 of the

world’s largest organisations across

20 industries including energy and

utilities, found that only 12 per cent

cite return on investment as a prima-

ry driver.

“If returns are not the main driver

for AI, what is? And how do they

make sure they are meeting that cri-

teria?” said Torreira, pointing out this

“measurement gap”. The second

concern is what he called the “deliv-

ery gap”. “Only a third of executives

report the impact of AI at scale across

enterprise, despite the investment and

boardroom commitment.”

He added: “To me it seems that AI

is the way people believe in going to

the gym. The intentions are real, but

the results sometimes are not.”

During the panel discussion follow-

ing Torreira’s presentation, Stephen

Fitzpatrick, Founder and CEO of

Kaluza, said: “I heard a joke once…

In the beginning, AI is like sex: ev-

erybody thinks everybody else is

doing it better and getting more of it.

And we are just trying our best to get

as much as possible.

“This idea that AI is the goal rather

than the tool; I think that’s where

people aren’t sure. They think, ‘the

more I do the better it will be’. But

this is clearly not the case. It’s not

some new religion; it’s the same as

every other business decision that you

make. You have to measure the results

and invest in the winners. That’s

something we have really found in

the last six months – measuring the

results of the AI that we’re using is

more and more important.”

The potential of AI for power is

huge. At the same time power demand

is being driven by data centres and

the AI workloads they host. AI data

centres have become a signicant

new customer of the electricity sector,

while the utilities powering them are

deploying the same AI models to do

real operational work. To address

these parallel issues Day 2 of the

conference saw Eurelectric announce

the launch of a new project on AI:

‘The era of electric intelligence’.

Conducted with its partner EY, the

project will explore how much

power will be needed to feed AI

(Power4AI) and how AI solutions

will augment the power sector (AI4P-

ower). The conclusions of this anal-

ysis will released in late 2026

(Power4AI) and in 2027 (AI4Power).

To seize the opportunity that AI

presents, Eurelectric is partnering

with stakeholders across both sectors

to identify practical pathways for

timely, efcient, and sustainable data

centre growth. Through the ‘Twin

Transition Commitments’ initiative,

it will assess future data centre de-

mand and exibility, evaluate how the

power system can meet this growth,

and advance secure and sustainable

solutions, including collaboration

between utilities and hyperscalers

and the use of applied AI.

But achieving data centre growth

and this digital transformation re-

quires coordinated action across

policy, markets, and industry.

“The energy and digital transitions

are fundamentally connected,” said

Georgios Stassis, Vice-President of

Eurelectric and Chairman and CEO

of PPC. “To support them, we must

accelerate grid connections and

streamline permitting processes.

Crucially, we need regulatory envi-

ronments that ensure a stable invest-

ment landscape. Doing so empowers

the electricity sector to deliver the

power infrastructure needed through

innovative business models. This will

fuel the data centre boom while

guaranteeing reliable and affordable

power for everyday consumers and

Europe’s decarbonisation goals.”

When asked what Europe needs to

move fast in order to seize the AI

opportunity, Stassis neatly rounded

off a conference session that spoke of

power couples and sex, with the an-

swer: “More love… we started with

sex and ended with love.”

Sex, love and power

couples

Junior Isles

Cartoon by Jem Soar