The emerging era of electrostates

This insight was originally produced by WHEB Asset Management, now part of Guinness Global Investors.

Access to energy has long determined patterns of global politics and economic growth. For the past century, control of oil and gas reserves has given certain countries geopolitical influence and leverage.

Today, as the clean economy expands, that advantage is eroding. At the centre of this shift is electricity, increasingly supplied by renewable sources.

This shift marks the beginning of the electrostate era. Electrostates are countries whose strength rests on renewable generation, advanced grids, technological leadership, and control of the minerals and manufacturing that will enable system-wide electrification. China has emerged as the leading electrostate, demonstrating how dominance in clean-tech manufacturing and rapid progress in domestic electrification can translate into economic and strategic advantage. Where access to oil and gas once determined the economic and strategic prospects of individual nations, control of clean energy technologies and supply chains could increasingly define their future competitiveness.

Electrification will be a defining feature of the electrostate era. It is emerging as one of the fastest routes to cut emissions and a powerful driver of economic growth. Today, electricity accounts for around 20% of final energy consumption worldwide and to align with net-zero pathways must rise to roughly 55% by 2050.1 Electrostates will use this expansion to scale domestic markets, accelerate innovation, and build competitive export industries. For investors, this points to sustained demand across vehicles, heating, industrial equipment, and the services that integrate them into the grid.

Major economies in transition

The contours of this shift are already visible in how major economies are positioning themselves. China has moved furthest, scaling renewables and electric vehicles while dominating refining and manufacturing. Over the past decade its installed solar capacity has grown by more than 3,500%, and in 2024 it accounted for 76% of global clean tech factory investment.2 Europe, in the face of supply-chain gaps and energy-security pressures following the war in Ukraine, has advanced initiatives such as REPowerEU, major offshore wind commitments, and support for a domestic battery industry. The United States signalled intent to accelerate electrification and expand domestic clean energy manufacturing capabilities through the Inflation Reduction Act, but recent political headwinds have seen fossil-fuel production reinforced.

For investors, the rise of electrostates represents a long-term structural investment theme. The transition from extraction to electrification will likely increase demand across renewables, grids, storage, materials, and manufacturing. Companies supplying the equipment and services that enable this system will benefit from structural rather than cyclical growth. In the 20th century, access to abundant and affordable hydrocarbons underpinned industrial growth and gave importing nations a decisive economic edge. In the electrostate era, advantages will instead accrue to countries able to generate, store, and use clean energy at scale. Investors who identify this shift early could be well placed to take advantage of future policy support and capital flows.

The strategic priorities of electrostates

As countries seek to establish themselves as electrostates, the following common approaches are shaping national strategies and indicating where investment opportunities will develop.

1. Energy Sovereignty: securing domestic generation, storage, and transmission capacity.

Historically, energy security has focused on access to reliable and affordable supplies of oil and gas. In an electrified economy, it will depend on the ability to generate, store, and transmit clean power domestically. Governments are already setting ambitious capacity targets – for example, the UK aims to install 50 GW of offshore wind by 2030.3 Where full self-sufficiency is not feasible, countries are prioritising ‘nearshoring’ energy supply with trusted partners. For investors, this shift points to large-scale opportunities in renewables and storage.

2. Technological Leadership: controlling intellectual property and manufacturing capacity.

Control of critical technologies is becoming a decisive strategic advantage. Intellectual property and manufacturing capabilities across batteries, grids, and renewable equipment will shape economic competitiveness in the electrostate era. The EU’s European Battery Alliance, which seeks to build a competitive domestic battery-cell industry, illustrates this effort to reduce reliance on external supply chains. For investors, the opportunity lies in funding the build-out of clean tech manufacturing capacity and in firms with the IP that underpins emerging industries.

3. Critical Materials: securing and processing the inputs to electrification.

Lithium, cobalt, copper, and rare earths are essential inputs for batteries, grids, EVs, and renewable technologies. Control over their extraction and processing has become a new strategic lever in the energy system. China dominates much of this value chain, particularly in refining and processing rare earths. Other countries are seeking to diversify supply; Canada, for example, is positioning its resources as a reliable alternative for allies. For investors, rising demand can create opportunities across the value chain – from mining and refining to recycling and material recovery.

4. Grid and Infrastructure Strength: ensuring networks keep pace with clean generation.

Clean generation has little value without the networks to deliver it. Grids must expand and modernise to integrate variable renewable generation, support electrified transport and heating, and support enhance system resilience. Global grid investment is expected to rise by 70% by 2030.4 For investors, regulated returns and strong policy support make grids one of the largest and most durable infrastructure opportunities of the energy transition.

Toward a new global order

The emerging electrostate era signals a lasting shift in the foundations of energy, growth, and competitiveness. China already shows what strategic investment in this new era can achieve, building dominance across clean energy supply chains while electrifying every sector of its economy. Western economies have the chance to adapt the model to their own strengths, building resilience and securing long-term advantages. For investors, the emerging trend is toward electrification and clean energy supply; aligning with these themes early may offer opportunities as the global landscape develops.