The geopolitical conflict in Europe and the Middle East has had a significant impact on the energy industry. The transformer and transformer component industry has not been spared.
The impact is ongoing. It has strained business relations, in some cases terminated long-standing and carefully cultivated relationships, led to forced disinvestment, and disrupted supply chains. This is happening at a time when world demand for electricity has recorded exponential growth and perhaps of greater importance, will continue to grow. While not all companies are affected equally, there is a collective need to understand the root causes, as well as the tendency for these geopolitical conflict to escalate and persist. Although the impact varies across companies, the situation calls for collective understanding, risk analysis, and risk-averse strategic planning.
This topic has been discussed by industry experts at the recent CWIEME Berlin 2026 exhibition. It allowed for debate, differences in opinion but most importantly, cohesion on the strategic alternatives available to the industry, regardless of company size, company and geographical location and market orientation.
This article draws from these discussions. The views expressed herein is that of the author and not of the CWIEME Berlin panel or APC Media. The author is Chris Gerber, an international business management consultant, former transformer company CEO, board advisor and senior partner at Belgium based GenCon Management Consulting. He is a former academic and diplomat.
Is the term “energy war” an appropriate term to use? What is understood with this term? Can and should we call this conflict an energy war?
In some quarters the term “energy war” is considered an accurate term. Geopolitically, this terminology is used to describe the weaponization of oil, gas and other energy related resources to achieve political or military objectives. The objective is disruption and ultimately political domination. Energy is used as a tool of war.
The current conflict in Europe and the Middle East has become multi regional. The economic impact on the global economy, business confidence, growth and more specifically on energy and other supply chains are far reaching.
The impact and consequences of the geopolitical conflict differ. It is global but asymmetric. The least developed and poor suffer the most. Beyond the human toll, the war has caused serious destruction to energy and industry infrastructure as well as serious economic disruption.
It is clear that the global energy industry and more specifically the various supply chains within the transformer and associated industries, have been adversely impacted. Not all companies and all geographical regions have been impacted in equal measure. Large energy importers in Asia and Europe are bearing the brunt of higher fuel and input cost.
Not all companies and all geographical regions have been impacted in equal measure.
Governments create, influence and even dictate the legal framework of business.
Government policy dictates, not only the national but international commercial and business framework in which companies within the industry operate in. Compliance is mandatory and entrenched in legislation. Non-compliance is punitive. The legal framework and the enforcement are country specific. Not all countries introduced the same legislation and policies. Sanctions and other restrictions may be applicable in one country but may not be similar in another.
In many quarters, also within global energy and transformer related industries, the topic, has become the proverbial white elephant in the room. It is considered a sensitive and strategic topic. Vested interests are protected and guarded.
Corporate policy often dictates the narrative when and if the energy war is duscussed in public. The current conflict in Europe and the Middle East is contributing to an exaggerating the already stressed supply chains. It is prolonged. Escalation is probable and likely.
Contributing factors compounding the impact of the geographical conflict on supply chains are amongst others, the continued global demand for electricity, the remnants of the stressed supply chain ripple effect derived from the covid pandemic, fixed current European green legislation and specific net-zero targets and time lines, and electrical infrastructure expansion demands linked to EV, renewables and amongst others the growth of AI and data centres.
In Europe, this vulnerability and shift from statutory independence, self-sufficiency and self-reliance to collective vulnerability, can be ascribed to international globalisation.
In the EU common market, where collective policy, also on energy, is formulated, adopted and enforced within the EU institutions, the greater collective good is served, leading to a situation where national interests, are subservient to Common Market interests. If not safe guarded and consciously protected it will lead to greater national vulnerability.
The war is expected to shape the global economy in different ways, yet all roads lead to higher prices, inflation and slower growth.
In terms of cost. It is clear the taxpayer, in the
ultimate instance, will have to foot and pay
the bill. The conflict, and the justification thereof,
has become an international moral and ethical
matter. Moral and ethical justification as well as
secular interests, outweighs the commercial cost.
Multiple corporate strategies, addressing both the supply and demand side of the eqution, can be pursued.
Whilst the impact varies across geographical regions and not all companies are affected equally, the need to understand the root causes are collective. The strategies we choose and implement to minimalize risk is company particular and individual.
A summary of various strategies that can be contemplated would include a combination of:
Supplier diversification.
A broader supply base, with new suppliers, also based in other non- traditional geographical supplier regions.
Diligence in supplier accreditations and homologations.
Forward and backward integration and investment to secure raw material and product supply.
Outsourcing, subcontracting and white labelling.
Closer collaboration and friendshoring with current suppliers.
The need for greater consultation and long term transparency. Utility and network provider insight, reflecting on short-, medium-and long-term expansion and CAPEX upgrades and planning.
Insistence on the creation of industry driven advisory forums and the participation in broad based utility and network as well as government advisory platforms to reflect industry concerns and influence utility strategy and ultimately government policy.
The need for customised transformer fleets, which would allow for plug and play alternatives at utilities and network providers.
Lastly, and perhaps the most challenging, a global international standard which would imply IEC and IEEE compatibility.
This article was originally published in the June 2026 issue of the Grid Modernization and Flexibility magazine.
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