2025: What's New in Energy?
With 2025 just around the corner, now is the perfect time to take a deep dive into what’s happening in the energy sector next year. From advancements in renewable energy to emerging technologies changing how we consume and optimize power, the trends of 2025 promise to redefine the energy sector as a whole.
Let’s explore what’s in store:
1. Renewable Energy Outpaces Fossil Fuels
The dominance of renewable energy over fossil fuels in global investments has never been more apparent. Wind, solar, and other renewable sources are not just economically competitive but are increasingly seen as the only viable solution to mitigate climate change. The International Energy Agency (IEA) predicts that renewable energy capacity additions will grow by 15% in 2025 compared to the previous year. Solar photovoltaics lead this charge, with community solar projects and utility-scale installations expanding rapidly.
This trend is bolstered by international climate commitments, including those from the G7 and G20, which aim to phase out coal and accelerate the transition to clean energy. Additionally, corporate power purchase agreements (PPAs) are driving private sector demand for renewables, with major companies setting ambitious net-zero targets.
2. Focus on Emerging Economies
A significant shift in 2025 is the redirection of energy investments toward emerging and developing economies, which collectively represent the majority of future energy demand. Historically underfunded regions, particularly in Sub-Saharan Africa, Southeast Asia, and parts of Latin America, are now receiving targeted investments aimed at scaling renewable energy infrastructure. This is not just an altruistic endeavor but a pragmatic one, as these regions are critical to achieving global net-zero goals. International bodies like Sustainable Energy for All (SEforALL) and the World Bank are playing a crucial role by facilitating funding mechanisms, capacity-building programs, and public-private partnerships.
Additionally, innovations such as decentralized solar microgrids are empowering communities, providing reliable electricity, and boosting economic development. Yet, challenges such as political instability and lack of robust regulatory frameworks still need to be addressed to sustain this momentum.
3. Energy Efficiency Mandates
Energy efficiency will be a vital part of sustainable energy policy in 2025. Governments worldwide are introducing stricter regulations to reduce energy consumption across residential, commercial, and industrial sectors. In the UK, for example, the new Energy Performance Certificate (EPC) regulations mandate that all rental properties achieve at least a “C” rating by 2025. This is part of a broader strategy to decarbonize the building sector, which accounts for nearly 40% of global energy use and 30% of energy-related carbon emissions.
Landlords and property owners are now investing heavily in retrofitting older buildings with advanced insulation, energy-efficient appliances, and renewable energy systems such as rooftop solar panels. These measures not only lower carbon footprints but also reduce energy bills, benefiting tenants. Meanwhile, similar initiatives are being adopted globally, with countries like Germany and Japan setting ambitious efficiency targets for their building stock.
4. Stable Energy Prices Amid Regulatory Shifts
Energy prices in 2025 will be more stable than in recent years, offering a respite for consumers and businesses. This newfound stability results from diversified energy sources, improved grid infrastructure, and increased energy efficiency measures. However, regulatory changes, such as Ofgem's decision to slightly increase the energy price cap in the UK, highlight the delicate balance that regulators must maintain between affordability and sustainability. Countries are adopting long-term pricing models to reduce volatility, often supported by subsidies for renewable energy projects and carbon taxes on fossil fuels.
In the United States, for instance, the Inflation Reduction Act continues to provide financial incentives for clean energy adoption, helping to offset costs for consumers. Meanwhile, emerging economies are adopting pricing mechanisms that incentivize renewable energy investment while ensuring energy access for low-income households.
5. Liquefied Natural Gas (LNG) Expansion
While renewable energy dominates headlines, liquefied natural gas (LNG) remains a vital transitional fuel in 2025. New LNG liquefaction plants in North America, particularly in the Gulf Coast, are coming and significantly increasing global supply. These facilities are designed to meet the rising demand from Europe and Asia, where LNG is used to replace coal and oil in power generation and heating. LNG’s role is particularly prominent in countries where renewable infrastructure is still under development.
However, the environmental implications of LNG, including methane emissions, continue to spark debate. To address these concerns, companies are investing in carbon capture and storage (CCS) technologies to mitigate the impact of natural gas production. Analysts predict that while LNG will remain a critical energy source in the near term, its role will diminish as renewable energy capacity scales up globally.
6. Global Climate Commitments and Policy Action
International cooperation is looking to hit an all-time high in 2025, with countries rallying to meet the goals of the Paris Agreement and beyond. Initiatives like the Clean Power 2030 Action Plan are setting ambitious targets to decarbonize electricity grids and phase out coal power. This plan, expected to be a blueprint for many nations, emphasizes large-scale renewable energy deployment, grid modernization, and support for low-carbon technologies. Multilateral organizations, including the United Nations and the International Renewable Energy Agency (IRENA), are working to align national policies with global climate goals.
Meanwhile, carbon markets are expanding, with more countries adopting cap-and-trade systems to incentivize emissions reductions. The European Union, for instance, is tightening its Emissions Trading System (ETS), making it one of the most stringent mechanisms for carbon pricing in the world.
On a more localized front, changes are also being made to urban planning policies. In New York City, the New York State FY 2025 budget legislation, enacted on April 20, 2024, approved the elimination of the 12 FAR (floor area ratio) cap. This landmark decision paves the way for higher-density developments, enabling the construction of more affordable housing and modernized infrastructure. Such urban planning reforms are expected to complement climate goals by promoting sustainable city designs and reducing urban sprawl.
Stay Ahead in 2025 With Noda
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About Noda
Noda is a data and analytics company on a mission to make every building smarter, more efficient, and more sustainable. Recently ranked in the top 10 tech companies leading the charge on climate action, its AI-powered suite of products surface unique insights that empower real estate teams to reduce costs, decrease time spent on routine work, and find and act on opportunities to save energy and carbon. Discover how Noda's solutions can unlock the potential of your assets and accelerate the transition to net zero. Visit us at noda.ai to learn more.