The Ad Hoc Gist: The Pentagon’s Energy Transition

The Ad Hoc Gist: The Pentagon’s Energy Transition

April 2025

While it’s been a minute since I worked in the Pentagon, I still consider myself a national security professional. After all, energy is the national security issue to which I’ve committed the better part of my career.

In this month’s Gist, my colleague Joshua Grelle and I write about how the energy transition — particularly the growing demand for electricity at home and globally — is transforming our military.

In big AHG news, in partnership with our friends at Latitude Media, we announced the launch of the Power Resilience Forum, a new industry event focused on managing threats to our electric grid. Save the date and come join us in Houston on January 22-23, 2026.

We also added Chris Kelley as a Senior Advisor to the AHG team.

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Jim

The Pentagon's Energy Transition

The energy transition isn’t just transforming our civilian economy — it’s reshaping our military. How we power our armed forces — our planes, drones, ships, tanks, trucks, bases, and data centers — will determine our ability to compete militarily to wage, win, and prevent the wars of tomorrow.

While the civilian side of the energy transition is defined by global competition to lead innovation in AI, chips, batteries, and transportation, the military's energy needs amplify and accelerate these same challenges. This creates a powerful symbiotic relationship: innovation from utilities and energy startups are being adapted for military applications, while defense-driven energy solutions are finding their way back into civilian infrastructure.

Our future military dominance will depend on our energy tech dominance. This shared conviction is one of the reasons Joshua and I both switched our careers into energy. As the lines between national security and energy infrastructure continue to blur, building stronger bridges between the two sectors has become critical.

When I was a special assistant in the U.S. State Department during the early days of the Iraq War, U.S. convoys traveling from Turkey into Iraq were under frequent attack. Their cargo? Diesel fuel to power U.S. tanks and armor on the front line. Our tooth to tail ratio — the number of support troops to combat forces — was high, expensive, and vulnerable. I thought there must be a better way.

Changes in global threats, technology, and warfare over the last 15 years have only accelerated the need to diversify the military’s energy resources. Access to reliable, abundant, and secure energy — especially electricity — is perhaps more important to the armed services than ever before.

As a result, the Defense Innovation Unit (DIU), the Department of Defense’s bridge to the venture capital community, has made energy one of its top innovation priorities. Through its Energy Portfolio, DIU has launched initiatives to source and scale commercial energy technologies that enhance mission readiness and resilience.

Technology solutions for the grid and military

From next-generation nuclear energy to real-time grid control systems powered by AI, the technologies needed to power our utilities are also now needed to support our military.

The utility sector is investing in technologies that have direct applications for defense: industrial-scale batteries designed to stabilize renewable energy supply can also serve forward operating bases in contested environments. Small batteries, built with stealth and efficiency in mind, have obvious tactical value.

Then there’s software: advanced weather modeling and predictive analytics developed to manage extreme weather events on the grid are also needed for operational planning in climate-stressed regions and disaster response. Similarly, resilience technologies developed to protect critical infrastructure from physical and cyber threats can directly translate to military installations and command networks.

As AI applications scale across both defense and civilian domains, secure access to electricity will be a critical enabler. Large language models, sensor networks, and autonomous systems require tremendous computational power, which in turn demands reliable, distributed, and secure energy infrastructure. Without strong alignment between AI development and grid innovation, national security objectives could be constrained by energy bottlenecks.

Public-private partnerships enabling innovation

Commercial partnerships between the DIU and the energy sector are already accelerating deployment of these dual-purpose technologies.

The DIU is piloting mobile and tactical microgrids that enable forward operating bases to maintain power in contested environments without relying on vulnerable fuel convoys. It is also investing in long-duration and portable battery storage solutions, recognizing that energy independence is a strategic advantage in both domestic and deployed settings.

And the DIU is working directly with utilities and private energy companies. The partnership is exploring how distributed energy resources — like solar, wind, and small modular reactors — can be integrated into military bases to improve operational continuity and reduce reliance on a centralized grid. These technologies are now being adapted for defense applications to provide redundancy, flexibility, and resilience under stress. For example, the DoD is already developing a mobile microreactor in partnership with BWX Technologies and the Idaho National Laboratory.

This work appears to be continuing in the Trump Administration. In March, DIU announced awards to two tech firms that produce electrolysis generated hydrogen that will be used to operate fuel cell-powered drones, small electrical generators, and weather and communication balloons in remote environments. This kind of distributed energy technology can help our armed forces power their equipment even when operating far away from the grid.

The DIU also recently issued a request for proposals for tech firms that can deliver small modular nuclear reactors that could power U.S. bases at home and overseas. This would enable our military forces to power themselves 24/7 without needing to rely exclusively on a vulnerable electric grid or on diesel generators. Given that the military now relies on its own data centers to support AI-enabled intelligence, surveillance, and reconnaissance, access to large amounts of electricity is mission-critical.

The Pentagon will need to continue to integrate emerging energy technologies into our armed forces to meet the demands of electrified warfare. The new energy arms race is one we can’t afford to lose.

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