Sourcing Energy: Investment Trends in the Supply Chain

Decarbonisation is no longer a long-term aspiration—it is shaping immediate investment strategies across the energy sector.

According to L.E.K. Consulting’s Global Energy Study 2025, companies are focusing on reducing their carbon footprint while balancing economic realities.

However, sourcing and procurement in the energy supply chain remain complex, with infrastructure limitations and commercial uncertainties slowing progress.

In 2023, global investment in clean energy reached US$1.8tn, according to the International Energy Agency (IEA), but traditional energy sources are still in demand. Oil and gas production continues to see significant investment, highlighting the industry’s transition rather than an outright shift.

L.E.K.’s study, which includes insights from more than 320 executives across oil and gas, utilities, renewables and investment sectors, shows how businesses are adapting their strategies.

Rebecca Scottorn, Partner, and Amar Gujral, Managing Director and Partner at L.E.K. Consulting, state: “The global energy transition is undergoing a significant recalibration, balancing ambition with economic and infrastructure realities.

“L.E.K.’s latest Global Energy Study highlights a shift from aspirational targets to commercially viable solutions, with investments prioritising proven technologies like solar, storage and energy efficiency.”

Modernising supply chains to meet growing demand

The report identifies three key areas of investment reshaping the energy supply chain:

• Grid modernisation – As renewable energy capacity expands, energy grids require upgrades to manage increased load and fluctuating supply. This includes investment in transmission and distribution networks, digital monitoring tools and energy management technologies. Without these improvements, integrating renewable energy at scale becomes difficult.
• Energy storage – Storage is critical for stabilising renewable energy supply. L.E.K.’s study reveals that 77% of surveyed utilities plan to expand their storage capabilities over the next five years. Large-scale battery storage projects and long-duration energy storage solutions are a priority for ensuring reliability.
• Emissions control – Companies are adopting advanced methane detection and reduction technologies to improve efficiency while lowering emissions. The electrification of industrial processes is also increasing, replacing gas-powered systems with electric alternatives to cut carbon emissions.

Rebecca and Amar explain: “While decarbonisation remains a central focus, traditional energy sources such as natural gas and nuclear continue to play a critical role in ensuring energy security.

“Regional strategies vary—Europe and Australia emphasise grid modernisation, the US focuses on resilience and emerging markets advance energy access.”

Procurement challenges in clean energy investment

As organisations shift towards sustainable energy, sourcing and procurement strategies must adapt. Electrification is a major focus, with companies moving towards electric power for both onshore and offshore operations.

However, supply chain constraints, regulatory delays and commercial risks continue to impact investment decisions.

Carbon capture and storage (CCS) is an example of a promising technology facing procurement challenges. While large-scale CCS projects demonstrate technical feasibility, many fail to reach final investment decisions due to unclear financial models and contractual risks. Without firm agreements, scaling CCS remains uncertain.

Investment in energy storage infrastructure is increasing to meet rising electricity demand from data centres and industrial operations. However, supply chain bottlenecks for critical minerals like lithium and cobalt affect the rollout of battery storage. The cost and availability of these materials continue to shape procurement strategies.

“Investment in grid infrastructure and energy storage is accelerating to address the intermittency of renewables and rising power demand from electrification and data centres,” Rebecca and Amar note.

“Companies are now adopting a pragmatic approach, integrating sustainability with economic returns. By aligning investments with scalable solutions and fostering collaboration, the energy sector is charting a balanced path toward a more resilient, low-carbon future.”

Barriers to scaling new energy technologies

Despite strong investment momentum, several technologies face scaling challenges due to supply chain and policy uncertainties.

Clean hydrogen, often seen as a long-term solution for industrial decarbonisation, still lacks the necessary distribution networks and clear regulatory frameworks to attract large-scale investment. Investors remain cautious until these barriers are addressed.

Nature-based carbon offsetting is another area under scrutiny. While companies explore these solutions to meet emissions targets, concerns over the reliability of measurement methods and long-term impact raise questions about their viability.

EV charging infrastructure, especially for heavy-duty transport, is struggling to expand. Grid readiness issues and high commercial costs prevent rapid deployment, limiting widespread adoption in the logistics sector.

The energy industry is at a turning point where investment strategies must balance ambition with practical execution.

Companies are adjusting procurement approaches, investing in grid resilience and prioritising energy storage to support a cleaner, more stable energy system. The transition is happening, but supply chain constraints and infrastructure limitations continue to shape its pace.

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