Meeting the new energy reality by diversifying energy sources

The global energy transition is facing a critical challenge, balancing energy security, affordability and sustainability. In a world shaped by multiple overlapping crises, the question we must ask ourselves is: How do we create energy security and resilience through energy and fuel diversification?

The new energy reality calls for diversification

Supply disruptions, price volatility and geopolitical uncertainty are some of the critical issues the energy sector faces globally. At the same time, energy demand is set to grow significantly. There’s no quick fix or one-size-fits-all solution, but one mitigation approach is essential: fuel and energy diversification.

When energy systems depend on limited sources or suppliers, they become highly vulnerable to shocks and disruptions. Extreme weather events and geopolitical conflicts can cut off supply suddenly and send prices soaring - something the world has already experienced.

Following Russia’s invasion of Ukraine, Europe reduced its dependency on Russian gas – cutting the share of the EU’s total energy imports from 40 percent in 2021 to 10 percent in 2024 (IEA WEO 2024). Turning to the US for imports, an outage at a single LNG terminal in Texas drove EU wholesale gas prices up more than 10 percent in 2022 (IEA WEO 2023).

Dependencies can quickly turn into vulnerabilities. The global energy crisis has shown us how fast that can happen. While some of the immediate effects began to recede in 2023, significant risk of disruption remains.

A diverse mix of energy and fuel sources and suppliers is vital for: 

Security & price stability. Concentration of energy sources exposes economies to supply shocks and price swings.

Geopolitical risk mitigation. Relying on a few geographies for imports creates exposure to geopolitical risks and potential supply chain disruptions. Spreading imports across regions and investing in localized production strengthens resilience.

Climate resilience. Extreme weather threatens single-source systems. Diversified, distributed generation is inherently more robust (UNDP). IEA partly credits extreme weather for the notably faster growth-rate of energy demand in 2024.

Affordability. Over-reliance on one fuel or supplier reduces competition and amplifies price risk.

Bottom line: A diversified portfolio of energy and fuel sources, technologies and suppliers is an insurance policy in an uncertain world.

Solutions to diversify and strengthen global energy and fuel systems

Today’s global energy mix remains heavily reliant on fossil fuels. Oil, coal and natural gas still make up around 80% of energy consumption (IEA WEO 2024). Renewable energy sources, like solar, wind, hydropower and biomass, are growing but not fast enough to offset the rising demand for energy.

Looking at the IEA’s Net Zero Emissions (NZE) scenario, the energy landscape is radically different in 2050. Clean energy meets 90 percent of global energy demand, around one-third of the remaining fossil fuel demand is fully abated, around half is used as a feedstock or in other non-energy use, and the remainder is offset by direct air capture, negative emissions from bioenergy, or other forms of carbon removal technologies.

This paves the way for a system that is more sustainable, resilient and secure – and the solutions to diversify are already available and proven:

E-fuels, such as e-methanol, green ammonia and sustainable aviation fuel (e-SAF), offer alternative fuel solutions and can lower emissions for energy-intensive industries like aviation and shipping in existing infrastructure.

Renewable fuels, produced from feedstocks such as waste oils, enable emissions reductions through drop-in replacements for diesel and jet fuel. 

Low-carbon fuels, such as low-carbon hydrogen and low-carbon ammonia – also known as blue hydrogen and blue ammonia - are essential transition solutions, leveraging carbon capture to reduce emissions from conventional fuel production. These aren’t just alternatives; they are viable, scalable pathways to a secure, future-ready energy mix.

But deployment is lagging. Policy uncertainty and limited access to financing are holding back progress. Despite global ambition, growth is not yet on track. Accelerating the shift will require aligning technology, policy and investment at scale.

Long-term strategies for diversifying energy sources and building resilience

Long-term strategies for diversifying energy sources and building resilience
To build a resilient and secure energy future, diversification must be embedded in long-term national and regional strategies. This means not only increasing the supply of clean power and fuels but also ensuring that energy systems can withstand shocks – from market disruptions to extreme weather. With energy demand projected to grow up to 18 percent by 2050 (McKinsey), the need for infrastructure that is scalable and sustainable is clear.

Just like a solid investment strategy, diversification is about spreading risk. That means:

Fuel variety, from different feedstock such as renewable electricity and sustainable biomass, and different fuels such as e-fuels, renewable fuels and transitional fuels with carbon capture.

Geographic diversity, through domestic generation of renewable electricity, localized fuel production and diversified import routes.

Technological breadth, including wind, solar, electrolyzers, energy storage, carbon removal technology and more.

Supply chain resilience, achieved through dual sourcing, localized production and circular materials.

However, closing the gap between today and tomorrow’s energy system will require coordinated action across government, industry and financiers. It requires robust, long-term policy to create demand certainty and lower capital risk, and it requires massive investment - estimated at ~$150 trillion by 2050 (IRENA).

Topsoe's role in energy diversification

We’re taking part in shaping a low-carbon economy through partnerships and projects that expand and diversify the fuel landscape. 

By developing technologies and solutions to produce a diverse range of fuels – from e-fuels to renewable fuels to low-carbon fuels - we take a leading role in the transition toward a more resilient fuel mix.

Our collaboration with Montana Renewables is one of our many projects producing low-carbon fuels globally. Montana Renewables is leading North America’s SAF industry using our HydroFlex™ technology to produce 30 million gallons per year - with plans to scale up to 300 MGY.

We’re helping scale high-efficiency electrolysis with our SOEC manufacturing facility in Herning, Denmark, while our supply chain partnerships help localize critical clean-tech production.

We’re providing technology and engineering support for producing e-methanol for shipping and chemical industries at commercial scale in Spain. Foresta del Atlántico’s Triskelion project is expected in 2027 to start production with annual capacity of 40,000 tons of e-methanol, also known as green methanol, while capturing and using c. 56,000 tons of CO2.

Together with our partner Sasol we’ll provide G2L™ e-fuels technology for the initial built-up of the German Aerospace Center’s Technology Platform Power-to-Liquid Fuels at the Leuna Chemical Complex in Germany. It’s expected to be commissioned in late 2027 and to produce 2500 tons of e-fuels per year, mainly e-SAF, for research purposes. With €130 million of funding secured from the German Federal Ministry for Digital and Transport (BMDV), the plant will be the largest facility for production of e-fuels for research. 

We’re helping fuel Brazil’s first commercial-scale SAF plant through our HydroFlex™ and H2bridge™ technologies. Refinaria Riograndense is expected to be operational in the first half of 2028 and aims to produce 16,000 barrels of renewable diesel and SAF per day. 

These initiatives are not only diversifying energy sources, they’re helping redefine what resilience means in the energy sector.

Looking ahead

As the world confronts the complexities of the energy transition, the path forward demands innovation, unwavering collaboration, and scalable solutions. At Topsoe, we are committed to driving this transformation – delivering proven technologies that enable industries to transition toward net zero while fueling innovation, economic prosperity and energy security along the way.

This article is part of our New Energy Reality Series. Explore the full New Energy Reality series here.