Securing Europe’s Energy Transition: Lessons from a Scenario Game on Battery Storage and Resilience
Held on 8 June 2026 in partnership with Zurich Insurance and CEPS
Europe cannot prevent every energy-system shock, but it can design infrastructure, supply chains and policy to limit disruption and accelerate recovery: ‘resilience by design’.
Resilience by design
For Europe, secure electrification means designing resilience into battery supply chains and energy systems from the outset. The EU should use the Industrial Accelerator Act, procurement and investment policy to anchor strategic capabilities in Europe, diversify trusted supply and ensure that critical systems can withstand disruption, recover rapidly and remain under trusted control.
This is the principal lesson drawn by participants spanning utilities and grid operators, battery systems and battery supply chains, investors and insurers, NATO, and European institutions.
The scenario
Europe’s energy security is closely linked to trade security, financial stability and geopolitical choices.
In the hypothetical 2027 scenario, repeated closures of the Strait of Hormuz cause a tightening of energy and battery-adjacent inputs, while heatwave-driven power stress is compounded by new US secure-battery rules. This creates an extraterritorial supplier shock, alongside additional cyber disruption in power balancing.
Two questions emerge: can Europe physically build and connect storage fast enough to improve its grid? And can it finance, govern, insure and scale storage if dependencies are embedded?
Key lessons
1. The cost of inaction could exceed the cost of resilience
While resilient infrastructure requires upfront investment, crisis management could become far more expensive without it. A 100-day energy crisis in the Middle East, for instance, could easily dwarf the cost of preventive measures.
2. Quantification of the cost of inaction should go beyond case studies to justify resilience investments against alternative uses of capital
This should encompass comprehensive investment and procurement strategies that include long-term system resilience, diversification and value.
3. Europe’s battery sector is more competitive than it thinks
Many countries share similar dependencies on critical components and raw materials. European suppliers are globally competitive, particularly in battery management systems. For export opportunities to persist, Europe needs to scale battery-cell manufacturing and pull the battery supply chain towards a strong manufacturing base in Europe. Otherwise, it risks losing even the existing segments.
4. Resilience unlocks investment, insurability and bankability
Diversification, long-term planning and system-level contingency measures can improve the conditions for investment, insurability and bankability. The assessment and quantification of risks such as cyberattacks and natural disasters, and the evaluation of costs and benefits, including by insurers, are vital to securing investment and project financing. Resilience measures are the gatekeeper to investment.
Implications for EU policy
Policy certainty is needed as a long-term signal to unlock investment in battery manufacturing, storage and grid expansion. Europe may not be able to produce everything domestically at the same time, but it can ensure that no single actor can disrupt its energy security.
1. Localisation incentives
‘Made-in-Europe’ criteria for strategic materials and components through the Industrial Accelerator Act could help build lead markets in Europe and reduce single-supplier dependence.
2. A full value-chain approach is needed
Europe is sorely lacking in midstream battery-manufacturing capacity, notably for producing anodes, cathode active materials, precursors and electrolytes. Furthermore, end-of-life batteries and components are not being retained in Europe, leaving a gap in feedstock for recycling facilities.
3. More targeted standardisation and interoperability of key components can enhance physical resilience
Standardised designs can enable faster repair, simpler procurement and more flexible stockpiles, provided this does not create new systemic vulnerabilities or overdependence on a single design.
4. Energy resilience now depends as much on software and access control as on physical infrastructure
Certain high-risk vendors should be excluded from critical elements of battery and energy systems, and software and data-handling standards strengthened, ‘triple-guarding’ sensitive facilities and ensuring that core operational data remains under European jurisdiction.
5. Credible pricing frameworks and transparent risk-sharing arrangements can influence the pace and direction of capital flows into resilience-enhancing projects
Existing instruments, such as contracts for difference that stabilise revenues or EU-level funds for competitiveness and clean industry, can be designed or deployed to support strategic segments of the energy and battery value chains, while safeguarding against undue dependence on high-risk vendors or capital sources.
Conclusions
The perspectives offered during the game underlined the urgency for Europe to treat energy resilience as a defence priority.
Simultaneous stressors can cascade into systemic failures of power infrastructure. Europe’s exposure is not just to individual shocks but to their convergence and amplification.
Deeper structured collaboration with public authorities and other sectors, including defence, can amplify collective security.
As an institution, CEPS takes no position on questions of European policy