The energy and power sector experienced transformative growth during the fourth quarter of 2024, driven by AI advancements, renewable energy projects, and strategic mergers. The integration of AI in industrial operations, significant mergers and acquisitions by key players, and the rise of EV adoption reshaped the growth of the energy markets during the sector. The growing number of renewable energy projects in Germany, the U.K., the U.S., and Botswana during the quarter highlighted a global transition toward sustainability and innovation to meet future energy demands. In this newsletter, Allied Market Research attempts to cover all key M&As, trends, advancements, and product launches that propelled the sector’s growth in Q4 2024.

Modern technologies and sustainable goals advancing the EP industry in Q4 2024

In the fourth quarter of 2024, the energy and power industry observed notable growth due to the increased demand for energy consumption among individuals globally. Moreover, the integration of AI in the EP sector showcased the growing importance of sustainable energy sources like wind, solar, hydro, and nuclear power, ensuring a major role during the quarter and in the coming years.

Furthermore, the energy and manufacturing industries, along with transport and agriculture, are major contributors to greenhouse gas emissions globally. Every nation reports its emissions under Nationally Determined Contributions (NDCs) as outlined by the Paris Agreement. At COP29 in November 2024, countries such as the UK and Brazil pledged ambitious NDC targets for 2035. By early 2025, countries are expected to submit updated NDCs. COP29 also examined the role of technology in addressing emissions from ‘hard-to-abate’ sectors like steel, cement, chemicals, and petrochemicals, which account for approximately 70% of industry-related greenhouse gas emissions.

AI and EV adoption revolutionizing the EP sector

In Q4 2024, AI significantly surged energy demand, particularly for power-intensive data centers in the US, boosting power consumption to unprecedented levels. Reports indicated that nearly 40% of AI data centers are facing challenges in maintaining a sufficient power supply. To address this issue, tech giants expanded their data center portfolios and explored alternative energy sources to sustain their operations. With GPUs and CPUs used for AI processing running up to 10 times hotter than traditional CPUs, many companies invested in advanced cooling technologies to optimize performance during the period. Additionally, AI contributed to advancements in industrial operations, with its predictive analysis and efficiency capabilities enabling companies to enhance productivity and streamline processes.

This trend is expected to drive the domain’s growth in 2025, with a decline in gasoline and diesel consumption for road transport and a modest growth in jet fuel demand. EVs and LNG-fueled trucks are predicted to play an increasingly significant role in reducing reliance on conventional fuels, driving further transformation in China’s energy and transportation sectors.

In the quarter, companies like ConocoPhillips and Marathon Oil joined hands together, aiming to become one of the largest M&A deals in 2025. With oil prices being elevated, ConocoPhillips focused on expanding its footprint in the Permian Basin, a vital hub for U.S. oil production. The robust financial base of both companies made the deal proceed smoothly. Additionally, significant operational synergies began to take place, as ConocoPhillips laid the groundwork for integrating Marathon Oil’s assets into its operations. This integration aimed to boost efficiency and strengthen the combined entity’s competitive edge in the energy sector, promoting long-term growth and stability.

Similarly, in Q4 2024, the acquisition of Allete by CPP Investments and Global Infrastructure Partners (GIP) emerged as a highly anticipated development in the energy sector. It highlighted a growing emphasis on renewable energy investments and infrastructure. The deal appeared with a high closure, influenced by the robust financial capabilities of these two prominent investment firms.

With plans to take Allete private, CPP Investments and GIP aimed to inject significant capital into expanding the company’s portfolio, particularly in sustainable energy projects. This move represented a key move toward accelerating the energy transition and strengthening Allete’s position in the renewable energy market.

Product launches and services creating lucrative opportunities for the EP sector in Q4 2024

The EP sector experienced huge opportunities in Q4 2024 due to the development of innovative products and services by industry players. For instance, during the quarter, offshore wind development in the North Sea gained significant traction. Germany prepared to launch the 960-megawatt He Dreiht project in 2025, featuring advanced Vestas turbines producing 15 megawatts each. Meanwhile, the U.K. geared up to activate phase one of the Dogger Bank Wind Farm, the world’s largest offshore wind project, expected to power 6 million homes upon its completion in 2027.

Simultaneously, in 2024, Mississippi advanced its renewable energy landscape with the commissioning of a 150-megawatt solar array and a 50-megawatt battery storage project by Origis Energy. This initial phase, known as Golden Triangle II, began generating clean energy in May and has been supplying power to nearly 40,000 homes. The project is part of a larger initiative that is projected to add 400 megawatts of solar capacity and 100 megawatts of storage by 2025. It is expected to cater to both residential needs and major industrial clients like Meta, which secured over 1,000 megawatts of renewable energy from the Tennessee Valley Authority.

Regional insights driving the industry growth in Q4 2024

In 2024, investors focused on East Asia, Europe, and North America, due to the favorable government support, political stability, and robust infrastructure development. The Asia-Pacific region accounted for over half of global energy consumption, fueled by rapid industrialization and population growth. China and India led renewable energy advancements, with China becoming the largest bioelectricity producer in 2024. According to World Bank data, the region excelled in geothermal energy, contributing 33.3% of global capacity at 27.53 GW, while electric vehicle production created further market opportunities.

Moreover, North America strengthened its leadership in clean energy technologies in Q4 2024, with the U.S. advancing renewable infrastructure and electric vehicle sales. The region contributed to a 4% reduction in CO2 emissions from the energy sector, with the electricity sector accounting for 65% of the decrease. This highlighted North America's innovative role in sustainable energy transition.

Simultaneously, Europe held a dominant position in the renewable energy sector, with clean sources accounting for two-thirds of its electricity in Q4 2024. Wind and solar energy collectively produced 27% of total EU electricity, surpassing nuclear power (23%) and hydropower (12%). Bioenergy and other renewables contributed an additional 5.9%. This contribution to reducing carbon emissions and enhancing renewable generation increased energy demand and investment across the continent, promoting a sustainable energy future.

The bottom line

The energy and power sector experienced a transformative journey in Q4 2024, promoting notable innovations and emphasizing sustainability. The incorporation of modern technologies such as AI and the focus on numerous renewable energy projects by leading companies demonstrated global efforts to reshape energy landscapes. Moreover, the rising trends of decarbonization and energy efficiency are expected to create wider opportunities for the sector in the coming years.

To gain more insights into the latest developments in the energy and power industry, reach out to our industry analysts today!