Energy security, renewables, and AI: Navigating the future of power

As geopolitical tensions reshape global energy dynamics, the energy sector must rethink its fundamentals — from supply chains to investment strategies — to build resilience and ensure long-term sustainability, an expert said.

Neil O’Keeffe, PwC Middle East’s Energy, Resources and Sustainability Market Leader, outlined how energy companies can adapt to a world where geopolitics is no longer a temporary disruption but a permanent fixture. “Energy security is now inseparable from national security,” he said. “Over-reliance on a single supplier, route, or technology is a vulnerability markets can no longer afford.”

O’Keeffe advocates for diversification across fuels, suppliers, and geographies, coupled with selective localisation of infrastructure. But he also sees value in interdependence. “Regional interconnectors, cross-border pipelines, and joint storage assets bind economies together and reduce the incentive for conflict,” he noted, urging companies to coordinate closely with governments and national energy entities.

Balancing ambition with affordability

On the transition to renewables, O’Keeffe stressed that ambition must be matched by economic realism. “The real bill includes grid modernisation, firm back-up capacity, and climate adaptation,” he said. While renewables are central to the future, they must be integrated into a broader system that includes efficient gas generation, viable storage, and demand-side flexibility.

In the GCC, he sees early investment in grid readiness and pragmatic public-private partnerships as key to scaling renewables affordably. “Large, transparent projects with long-term offtake agreements will help keep the cost of capital low,” he added.

Strategic bets in a fragmented world

Asked where companies should “place their bets,” O’Keeffe recommended focusing on proven, cost-effective technologies. In the GCC, that means leveraging low-cost solar and wind, supported by efficient gas. He was cautious about carbon capture and hydrogen, describing them as niche solutions rather than systemic answers. Nuclear, he said, remains “an expensive distraction” in many contexts.

Instead, he sees regional interconnectors as a more effective medium-term strategy. “Shared infrastructure allows countries to pool reserves, smooth variability, and create resilience through cooperation,” he explained.

AI and the data centre surge

With data centres and AI infrastructure driving unprecedented energy demand, O’Keeffe urged policymakers to treat them as “system anchors.” He recommended co-locating hyperscale data centres with renewable hubs and industrial zones to share power, cooling, and waste heat.

Long-term power purchase agreements, backed by storage, and advanced cooling technologies will be essential, he said. “Without discipline, the growth of data centres risks driving up costs or forcing unnecessary overbuild of generation capacity.”

Neil O’Keeffe, PwC Middle East’s Energy, Resources and Sustainability Market Leader

Yet O’Keeffe sees a silver lining: “The same AI driving demand may eventually help solve the problem — from designing new energy systems to predicting weather patterns for better energy management.”

Upgrading the grid for tomorrow

O’Keeffe warned that the energy transition “will be delivered or delayed in the wires”. He called for targeted expansion of transmission and distribution networks, prioritising congestion hotspots, digital substations, and automation. Dynamic line ratings and advanced metering can unlock latent capacity, while managed charging and demand response will be vital as electrification surges.

In the Middle East, regional interconnectors offer a cost-effective way to enhance collective security and resilience.

Regulation in a complex landscape

Finally, O’Keeffe addressed the regulatory challenge, describing it as a “quadrilemma” of affordability, security, sustainability, and adaptation. He urged regulators to account for the full cost of energy systems — not just generation, but also networks and stability services.

“Large-scale renewables and rooftop solar offer quick wins, but hidden costs must be tackled upfront,” he said. Regulators should design incentives that reward flexibility and reliability, and ensure compatibility across different market models.

“The measure of success,” he concluded, “will be regulation that is ambitious yet realistic — ensuring fair pricing and equitable access, while funding resilience and long-term emissions reduction.”