Month: March 2025

From AI to affordability: Five trends defining energy & utilities in 2025

Written By: Paul A. DeCotis
View the original article here

Paul A. DeCotis
Paul A. DeCotis, senior partner, Energy & Utilities at consultancy West Monroe, writes on key trends in the energy sector we will need to be on the lookout for in 2025.

In 2025, the energy and utilities sector will encounter both familiar challenges and new uncertainties. With a new presidential administration, potential regulatory changes could influence infrastructure investments and decarbonization efforts.

The industry is facing a significant surge in load demand driven by AI, data centres, and widespread electrification. To address this demand, utilities must enhance grid reliability and resilience while maintaining affordability and advancing clean energy goals. The market is also becoming more competitive as independent providers are looking to address emerging power generation, and infrastructure needs and clean energy goals.

At West Monroe, our Energy & Utilities practice has identified five key focus areas to help utilities navigate these changes and build a resilient, reliable, and inclusive energy future.

Trend 1: Load growth and T&D system needs

Energy demand is climbing rapidly due to AI, data centres, and increased electrification in buildings and transportation. Data centres alone require near-perfect reliability, adding pressure on the grid and necessitating substantial expansion in Transmission and Distribution (T&D) infrastructure.

As demand rises, distribution utilities must balance clean energy goals established by legislation or policy, with the need for accessible, affordable services. This accelerated growth increases complexity in load forecasting, complicating the balance between necessary system upgrades and equitable cost distribution.

Although new technologies aim to expand transmission capacity, the challenge lies in the pace of change and managing investments within the regulated industry structure.

The industry is also shifting from a collaborative stance to a more competitive landscape, with energy companies vying for growth opportunities across regions perhaps bypassing the local distribution utility.

With load growth at this rapid rate, utilities and other companies will struggle to mobilise quickly enough to build the infrastructure needed to meet demand. Technology and data centre companies are already implementing on-site generation solutions, such as solar energy, and co-locating with natural gas and nuclear facilities to meet their energy needs.

Trend 2: Maintaining and enhancing safety and reliability

Maintaining grid reliability is becoming increasingly challenging due to aging infrastructure, extreme weather, and the integration of distributed and renewable energy sources.

Although the US electric grid ranks among the most reliable globally, significant investment is required to ensure ongoing safety, stability, and affordability.

Unpredictable power demands from data centres and cryptocurrency miners further complicate supply management, while the intermittent nature of renewable sources can destabilise the grid, underscoring the need for robust planning and control systems.

To meet rising demands, utilities are exploring decentralised energy resources, microgrids, and remote grids.

However, financial constraints and supply chain issues can delay critical infrastructure upgrades, requiring utilities to prioritise spending strategically. Our energy future will not be solely electric, gas, solar, or wind; it will require a combination of resources working together to maintain safety, reliability, and achieve statewide decarbonisation goals.

Trend 3: Championing energy affordability

Regulators and utilities face complex, interconnected challenges as they transition to a lower-carbon economy.

A critical focus is on identifying cost-effective investments for grid modernisation while keeping energy accessible and affordable for all customers. Utilities are tasked with securing trillions of dollars to upgrade the grid and support cleaner energy, amid rising capital costs and supply chain disruptions.

This situation is further complicated by the public perception of energy as a fundamental right, which can clash with the reality of private sector provision. As utilities refine their operating models and explore digital solutions to improve efficiency, the future of energy affordability remains uncertain, especially with equity concerns in play.

We must balance our clean energy ambitions with the need for a public policy approach that protects vulnerable populations while advancing environmental objectives.

Trend 4: Integrating AI into utility operations

AI, machine learning, and advanced analytics are transforming energy and utility operations, bringing powerful tools for optimisation and predictive insights.

From smart grid management to preventive maintenance, these technologies drive operational efficiency and elevate customer service. AI-driven analytics support regulatory compliance and offer more precise grid monitoring, helping utilities make better informed, data-driven decisions.

While AI can reduce operating costs, it’s not a substitute for the substantial investments required to meet growing electricity demands.

Additionally, the energy demand of AI itself necessitates careful oversight and transparency. Success relies on embedding AI into broader sustainability strategies, emphasising accessible tools and robust workforce training to drive effective change.

AI is the worst it is ever going to be right now—it is only going to improve from here. To thrive in this evolving landscape, organisations must invest in understanding and leveraging new andemerging technologies.

Trend 5: Strengthening cybersecurity to protect critical infrastructure

With rising threats in the energy sector, utilities and non-regulated private energy providers must adopt strong cyber resiliency measures.

The growing number of connected devices introduces vulnerabilities, where even a single compromised supply chain component can put entire systems at risk. Securing and monitoring equipment—and clearly understanding the ownership of critical components—are vital steps.

Utilities also face challenges with tight budgets and a cybersecurity skills gap. Preparing for geopolitical risks and policy changes will shape funding and priorities. As cloud tools expand and national databases for equipment manufacturers become available, utilities will need adaptable, proactive cybersecurity strategies for long-term success.

Cybersecurity in utilities isn’t static—it’s like preparing for a new type of storm. Just as we plan for hurricanes and wildfires, we must continually adapt our defenses to evolving threats.

The 8 Critical Energy Trends Defining 2025

Written By: Bernard Marr
View the original article here

From AI-powered infrastructure to breakthrough battery technology, the global energy landscape is undergoing its most dramatic transformation in decades.
Adobe Stock

From cooking food to heating and lighting our homes and powering industry, energy is central to life on Earth and the advancement of human society. But the way we access, store and use energy is evolving rapidly, driven by environmental concerns, new technological developments and geopolitical challenges.

The impact of this change is likely to become more dramatic as we head into 2025. As the world faces new climate and energy security challenges, innovation and changes in human behavior will both be vital to finding solutions. So, here’s my roundup of what I believe will be the most important trends around new energy sources and energy transformation in 2025.

AI In Energy Infrastructure And Management

Predictive analytics and smart energy optimization solutions, all made possible thanks to the ongoing AI revolution, will continue to enable more precise forecasting of energy demands and real-time optimization of energy generation, storage and distribution. It will also play a role in green energy exploration. Companies like Shell are already leveraging AI to help identify deposits of biofuel, as well as optimize the placement of EV charging stations, and accelerate their research into clean energy solutions.

Innovation In Energy Storage And Battery Technology

New types of battery storage, such as solid-state and flow batteries, will continue to make renewable energy storage a more viable solution in 2025. This will enable more reliable integration of solar, tidal and wind energy sources into energy grids, with scalable solutions that address the problems of intermittency that traditionally come with these methods of generating power. Other potential solutions will come in the form of thermal energy and compressed air storage, creating further possibilities for easing the energy crisis.

Decentralized Energy Production

Rather than centralized energy production carried out at large facilities, the principle of decentralized energy involves millions of smaller-scale microgrids and energy-sharing systems, combining renewable and clean energy generators with AI-powered management systems. These could be owned and operated by community groups or neighborhoods, creating local energy ecosystems that will increase energy resilience and reduce reliance on central providers. In 2025, we will see this trend helping to support the transition to greener energy use, particularly in rural and remote areas.

Geopolitics Drives Energy Security Challenges

Turbulent political tensions are forcing nations to prioritize energy security, diversify their supply of energy, and develop new supply routes. In 2025, many companies – particularly those that are reliant on energy supplied by countries involved in war or political trouble – will focus on reducing dependency on imports and increasing domestic energy production. This will involve challenges that may be dependent on the will of politicians or the voting public, such as making choices between further exploiting natural resources and investing in green energy solutions.

The Nuclear Options

The development of small modular reactors, as well as potential breakthroughs in the quest for fusion, promise safer and more easily affordable nuclear power. This could create new opportunities for reliable, low-carbon power generation that will increasingly be used alongside renewable energy in the pursuit of clean energy goals. SMRs are smaller, safer and cheaper than conventional nuclear power plants, meaning they are increasingly being seen as an attractive option for replacing aging fossil fuel plants in 2025. Some, however, remain concerned that not all concerns around nuclear power will be alleviated.

Addressing Energy Inequality

The need to address energy poverty and inequality is increasingly becoming a global priority. Across the world, billions of people still have limited or no access to reliable electricity supplies, severely endangering their health and limiting the possibility of economic development. In 2025, developing new methods of supplying affordable and clean energy to some of the most underserved regions will be an increasingly urgent priority.

New Developments In Renewable And Green Energy Sources

Worldwide, there is still a tremendous appetite for replacing fossil fuels and polluting energy supplies with clean, green alternatives. As well as new developments in renewable generation such as more efficient, integrated solar panels (photovoltaics) and floating wind farms (floatovoltaics), green hydrogen is emerging as a viable solution for reducing carbonization of industries such as steel and chemical production, as well as transport.

The Human Factor

The most critical element in energy transformation could be the role played by human behavior. From the appetite for transitioning away from fossil fuels to participation in community energy programs, the question of whether individuals will be willing to make changes to their habits will be a deciding factor. Legislation will play its part but may provoke kickback if handled too heavily, as seen by the reaction of some to measures such as EV mandates. Education will be even more vital in raising awareness of the deadly scenarios we will face in the future if we don’t effectively manage energy transitions today.