India and China have both invested in building redundancies into their energy systems to prevent chokepoints and vulnerabilities.

The UN General Assembly meeting last week has revealed an increasingly fragmented world. Diplomats described it as “messy, troubled, and unpredictable.” 

With conflicts flaring, energy security is becoming an ever-rarer commodity.

No country can afford energy shortages. But energy shortages and disruptions are particularly harmful to growing economies. In response, major energy demand centers in Asia are increasingly turning to new strategies, including what we call the “stack, don’t swap” tactic. Under this approach, ensuring real access to energy requires building redundancies and optionality into energy systems, including in both energy production and energy imports.

China has been a precursor of this method, building coal as a domestic backstop while overbuilding renewables and setting up storage to help the viability of wind and solar. The country is also building up hydro, nuclear, and storage as firm low-carbon options and expanding domestic production as well as imports of oil and natural gas. Imports are diversified by supplier, route, and type (pipeline and liquefied natural gas), as well as by contract conditions that vary in flexibility.

As a net importer of both oil and gas, China has also invested in building strategic stockpiles and has been developing synthetic fuel technologies that can transform coal into gaseous or liquid form. Demand substitution, especially electrification, is also being used to reduce the country’s reliance on oil.

The strategy has paid off so far, as China has managed negative impacts on fuel availability and fuel prices brought on by Russia’s war in Ukraine and the blockade of the Strait of Hormuz.

Other countries in the region are taking notice. In fact, India has already taken similar steps to a good extent. If you look closely at Figure 1, India has never swapped one type of energy for another.

Renewables were stacked alongside fossil-fuel generation and grew in tandem with total energy use. Fossil fuel use increased 18-fold between 1965 and 2024 (as seen in Figure 2), while renewables grew rapidly alongside it.

But energy security is not about how much energy is being used or contracted; it is whether energy use can be sustained at any given time. It is about capacity and optionality. Since 2021, India’s installed capacity has expanded across all electricity sources except diesel and natural gas, both too expensive or unavailable domestically and both troubled by energy crises.

In April, India experienced some of the hottest temperatures on record just as the Hormuz crisis flared. Electricity output jumped 9 percent compared to the same period the previous year to keep up with the huge electricity demand between April and July 2026. The demand peaked at a record 270.8 gigawatts on May 21.

Coal provided India with the flexibility to meet demand, as generation adjusted to the required level. In addition, the Hormuz crisis made coal-fired power more viable financially. The International Energy Agency (IEA) expects India to use 4.2 percent more coal in 2026. But the country is looking far beyond coal.

Over the last 5 years, India has moved out of a peak demand deficit and is working to create even more headroom by opening its long-closed nuclear market to the world with the SHANTI Act introduced in December last year. It aims to generate 100 gigawatts of nuclear energy by 2047, and India has some of the largest thorium reserves in the world. The recent success of the fast breeder nuclear reactor at Kalpakkam was the first step on India’s thorium route.

India is trying to create opportunities even where it depends on imports. The country has expanded its refining capacity and has steadily produced more petroleum products than it demands. Like China, India has also pushed for the electrification of transport.

And then there are India’s neighbors and their needs. India today serves some of the energy needs of Nepal, Bhutan, Bangladesh and Myanmar, while MoUs for interconnections do exist with Sri Lanka. India is also discussing links with the UAE, Saudi Arabia and Singapore. The more parties are engaged, the higher the probability that trade will happen. This is the well-known idea of a “credible threat.” Alternative supplies deliverable on short notice can offset any supplier’s coercive power or ability to exploit its position (geopolitically or otherwise).

This strategy of maintaining a portfolio of “redundancy and optionality” allows countries to hedge and keep alternative paths open in times of crisis. At first sight, it may seem expensive and, well, redundant, but faced with multiple global crises and an increasingly fragmented world, it may be the only way to ensure steady access to affordable energy sources critical to encouraging growth and prosperity.

About the Authors: Risav Ganguly and Anna Mikulska

Risav Ganguly is a research analyst at CGCN Group, supporting the firm’s research and intelligence unit with data-driven work on energy, industrial investment, trade, and economic policy. As a Sloan Economics Fellow and James Patterson Scholar at Howard University, he covers India-US relations, energy, data centers, and geopolitics.

Anna Mikulska serves as senior vice president at CGCN Group, leading research and strategic intelligence, and advising public and private sector leadership on energy security and technology policy. She is also a nonresident fellow at Rice University’s Baker Institute, Center for Energy Studies. Her background includes roles as a research staff member at the Science and Technology Policy Institute, along with fellowships in energy studies at Rice University and the University of Pennsylvania.

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