Table Of Contents
- Changing geopolitical scenarios and shift toward sustainability creating new investment opportunities in the sector
- AI integration and the rising popularity of electric vehicles impacting the domain positively
- Mergers and acquisitions by major companies accelerating the domain’s growth and success
- Innovative product and service launches by leading businesses enhancing the revenue share of the sector
- Winding up
Yerukola Eswara Prasad
Koyel Ghosh
Energy and Power Domain in 2025: Studying the Contribution of Trends and Advancements in the Industry’s Anticipated Growth
The growing electricity demand from the domestic, commercial, and industrial sectors due to the rising speed of industrialization and urbanization in developed and developing countries across the world has led to a huge expansion in the energy and power domain. In the last few years, the increasing pace of digitalization has further broadened the scope of the sector. At the same time, the overall surge in the use of renewable energy sources in households and industrial facilities has led to a growth in the revenue share of the landscape. Over the years, many such factors have influenced the energy and power domain and are anticipated to continue impacting the sector in the coming period. This newsletter highlights all such significant aspects of the landscape that are predicted to contribute to the rise of the domain in 2025.
Changing geopolitical scenarios and shift toward sustainability creating new investment opportunities in the sector
Since the past few years, the number of geopolitical tensions, conflicts, and wars has increased exponentially, thus shaping the energy and power domain. In the post-Cold War period, the US, being the sole superpower, has always influenced the supply-demand dynamics of the sector. Naturally, a transition toward a new US administration which is due to take charge in January 2025 is predicted to play a major role in impacting the landscape in the coming period. Additionally, the increasing investments of private companies in this region have opened new avenues for growth in the domain. The demand and consumption of fossil fuel energy and renewables have increased significantly in the US and are estimated to further rise in the near future. Thus, favorable governmental policies from the new United States administration and stakeholder actions from multinational energy conglomerates are anticipated to broaden the scope of the sector in 2025.
The growing awareness regarding environmental sustainability among people across the globe has led to a surge in the popularity of renewable power for domestic and industrial applications. Traditionally, the energy and domain sector has been one of the biggest contributors to carbon emissions and pollution. At the COP29 summit, several countries like Brazil and the UK have declared their Nationally Determined Contributions (NDCs) to achieve their target of net zero emissions. Many such countries have passed legislation compelling energy companies and power generation businesses to shift to sustainable electricity production techniques and methodologies. Moreover, other end-of-use industries such as manufacturing, consumer electronics, construction, etc., have started adopting eco-friendly processes to bring down the carbon footprint of their operations. The conscious efforts taken by these sectors to decarbonize the global economy are predicted to open new avenues for growth in the landscape in 2025.
AI integration and the rising popularity of electric vehicles impacting the domain positively
Artificial intelligence has become one of the leading technologies revolutionizing the energy and power sector in the past few years. AI-based tools are widely used by energy generation companies to predict the supply and demand of electricity in a specific region. This helps businesses to align their operations accordingly and improve their distribution channels and mechanisms, thereby avoiding problems of power outages and grid failures. Along with this, machine learning algorithms are used by enterprises to forecast the possible issues that may arise in their operations and networks, providing predictive maintenance capabilities in the long run. This ultimately reduces downtime and the cost of repair, thus increasing the profitability of the company. Due to these advantages, the rising integration of AI in energy generation is projected to contribute to the expansion of the domain in 2025.
The gradual shift toward electric mobility is another important technological advancement witnessed in the energy and power sector. Both government agencies and private players in major countries are playing a huge part in facilitating this transition. Many countries have started deploying electric buses and similar other public transportation vehicles to promote the electric vehicle industry. Moreover, there is a dramatic rise in the volume of investments from public and private entities to increase the charging infrastructure network, thereby encouraging people to buy EVs. In addition, many engineering and research institutes are developing technologies that improve the performance and safety of electric vehicles, which is anticipated to create favorable conditions for the growth of the landscape in 2025.
Mergers and acquisitions by major companies accelerating the domain’s growth and success
In the last few years, several players in the sector have established strategic alliances with their peers to maximize their revenue share and expand their operations globally. In the coming period, the energy and power domain is anticipated to witness many such M&A deals which are likely to strengthen the foothold of the landscape. For instance, Conoco Phillips, a leading oil and gas company, recently announced their plans to acquire Marathon Oil, a key player in the energy and power domain for $22.5 billion. The complete acquisition process is expected to be finalized in the early months of 2025. As per the press release issued by Conoco Phillips, the business move is in line with the company’s aim of securing more assets in the Permian Basin, an increasingly important region for the US oil industry. According to several analysts, the deal, if completed, will become one of the largest in the energy and power domain.
Similarly, CPP Investments, a capital investment company, has declared its intention to acquire Allete, a top energy producer and supplier. For this, CPP Investments and Global Infrastructure Partners, a private equity company, have signed a partnership agreement to jointly acquire stakes in Allete. The main motive behind this M&A deal is to increase Allete’s operational funds, which will ultimately help in expanding its product portfolio. As per many industry experts, this acquisition is primarily aimed at improving the enterprise’s renewable energy infrastructure in the long run.
Innovative product and service launches by leading businesses enhancing the revenue share of the sector
Over the years, governmental investments in offshore wind farms have increased substantially in various European countries. Recently, EnBW, a German electric services company, announced that its flagship, the He Dreiht project will become operational in 2025. With a power capacity of 960 megawatts, the initiative is one of the largest wind farms in Germany and is projected to address energy demands in several regions in the country. Compared to conventional turbines which generate 2 to 3 megawatts each, this project involves the use of Vestas wind turbines that offer around 15 megawatts of power. A similar initiative is also predicted to start in the UK in the second half of 2025. Called the Dogger Bank Wind Farm, this project will become the world’s largest offshore wind power farm once completed and will help power more than 5 million homes in the country.
On the other hand, Origis Energy, an energy and power sector player, has announced a collaboration with Tennessee Valley Authority, a government agency, to launch a three-project solar energy storage infrastructure plan in Mississippi. The first project has already become operational, while the next two are expected to be completed in 2025. Moreover, governments in Botswana and China have recently announced large-scale solar projects in various cities and towns in Botswana. These solar farms, when accomplished, are likely to make the country an energy-surplus nation, thereby boosting its GDP in the long run.
Winding up
To summarize, the huge growth in the revenue share of the energy and power domain is attributed to the increasing transition toward environmental sustainability and electric vehicles. The dynamic geopolitical scenario and the growing integration of AI-based tools are also anticipated to help the sector flourish in 2025. The M&A deals and ingenious product launches by leading companies are anticipated to expand the footprint of the landscape globally in the coming period.
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