The energy transition promises to herald in a future where electricity becomes the core of our energy systems and huge leaps in clean energy innovation further drive down the prices of renewable energy and create a rapid shift away from coal and oil toward an economy powered by carbon-neutral, hydrogen-based fuels.
This is echoed in the electricity market, with 90% of the power consumption growth in 2025 coming from renewables, while nuclear and gas share the remaining 10%. The intermittency of renewable power capacity has triggered record periods of negative prices, intensifying the need for reliable energy storage.
Amid challenges to energy systems including geopolitical risks and growing demand for power worldwide, concerns over energy security will also continue into 2025. Governments and industry are keen to avoid potential energy supply disruption and associated price spikes. As global powers and priorities continue to shift in 2025 and energy demands continue to increase, decision makers will need to stay alert to developments around energy security, while making sure not to miss the considerable opportunities offered by AI. By staying ahead of the varied challenges that 2025 will bring, leading players in the energy transition will be able to drive efficiencies while making progress toward decarbonization.
The International Energy Agency (IEA) predicts that in 2025, more than a third of the world’s electricity will come from renewables. IEA expects global electricity demand to grow by 4% in 2025 due to economic recovery, the need for electricity to power artificial intelligence and expanding industrial activities. The energy industry is set to go through transformational change in 2025.
2025 Renewable Energy Industry Outlook says: “The year 2025 will be defined by a race to overcome constraints and fill a growing gap between supply and demand for clean energy. Market and technology advantages such as low cost and modularity could be even more important amid policy uncertainty in the coming years. The growing cleantech manufacturing, AI and carbon industries will likely continue supporting renewables supply through domestic renewable supply chain development, AI-accelerated operational efficiencies and innovation.
In 2025, market reforms set to shake up the industry and policy shifts will underpin energy’s evolution. EV adoption is surging around the world, and demand for transport fuels is likely to decline as EVs-as well as LNG fueled trucks-gain market share. Electric vehicles and LNG-fueled trucks are now having a significant impact on the Chinese market. So, with few energy-specific AI applications on the market, more could emerge in 2025. Embracing AI in the power sector is not just a choice, it is an imperative. That’s why its critical that organisations have a dedicated tool designed specifically for analysing the massive amount of data generated across an evolving power grid.
India’s Union Budget 2025-26 is pivotal for advancing a sustainable energy future amidst economic and climate challenges. While notable progress in renewable energy has been achieved, increased focus on energy storage, offshore wind development, and green hydrogen is essential.
