The future of energy: planning beyond 2025
- 23 December 2024
- Posted by: Greg Coleman
- Category: energy transition
In 2024, the global political landscape has undergone significant transformation, with over 60 countries—representing nearly half of the global population—holding national elections. Many nations, including the United States, have experienced a notable shift towards more conservative political leadership. The return of Donald Trump to the presidency suggests that energy policies in the coming years will be heavily influenced by immediate geopolitical and economic considerations.
As we approach 2025, it is essential to reflect on what this means for the energy future. The interconnected global challenges of accelerating climate change, persistent cost-of-living crises and ongoing geopolitical tensions create a volatile backdrop for energy supply and demand. At the heart of this transition lies a delicate balance between two seemingly competing imperatives: the urgent need to decarbonise and the practical requirement to maintain energy security and a reasonable price.
The future of energy demands a forward-thinking, long-term perspective. The energy transition is not a single-year endeavour but a multi-decade transformation requiring a global framework, robust cooperation, and clear reporting mechanisms.
Short-term priorities for 2025
Economic pressures drive fossil fuel focus
Economic challenges are compelling governments to stabilise energy prices. In the short-term, this may lead to increased investment in fossil fuel exploration and extraction, particularly in natural gas. The immediate need to ensure affordable energy could momentarily overshadow long-term climate goals.
Energy security in a geopolitical context
Persistent geopolitical tensions, such as ongoing conflicts involving Russia and instability in the Middle East, underscore the critical importance of energy security. These dynamics have driven nations to re-evaluate their reliance on external energy sources and prioritise domestic production.
- Europe: the war in Ukraine has profoundly impacted Europe’s energy landscape, accelerating efforts to reduce dependence on Russian natural gas. Many European countries, including the UK, are issuing new oil and gas licences to boost domestic supplies. For example, the UK’s North Sea Transition Authority recently announced new licensing rounds to explore and produce oil and gas in the North Sea.
- United States: in the US, energy independence remains a central theme, with increased domestic oil and gas production stabilising energy prices and enhancing security. Recent policy directions suggest a continued focus on tight oil and natural gas.
- Latin America and Africa: countries in these regions, including Guyana, Brazil, and Nigeria, are actively promoting new oil and gas exploration projects. For instance, Guyana’s offshore discoveries have turned the country into a major player in global oil markets, while Brazil’s pre-salt reserves are attracting foreign investment.
Renewable energy momentum continues
Despite political shifts, economic realities favouring renewable energy—such as cost efficiency—will drive continued investment in solar, wind, geothermal and battery storage. In the short term, the emphasis will likely pivot from climate targets to energy independence and job creation, aligning with broader political priorities.
Nuclear energy, a stable and low-emission source, may experience a resurgence, particularly in Europe and Asia. As countries aim to strike a balance between energy security and decarbonisation, nuclear could emerge as a cornerstone of their strategies. However, nuclear power takes many years before it can be onstream.
Hydrogen, both green and blue, is expected to gain traction as a critical component of industrial decarbonisation. While questions remain about the pace of adoption, hydrogen holds promise for sectors that are difficult to electrify.
Natural gas is also here to stay. It will continue to play a key role in balancing energy systems, especially during the transition period when renewable technologies are still scaling up. Its role in providing stability and backup power makes it an integral part of the energy mix in the near future.
Infrastructure resilience
The escalating frequency of climate-related disasters will drive investments in resilient energy infrastructure. Governments will increasingly prioritise measures to mitigate supply disruptions caused by extreme weather events.
Carbon markets under pressure
Governments may deprioritise stringent emissions caps, potentially weakening global carbon markets. However, regions committed to net-zero goals, such as the European Union, are likely to sustain their push for carbon trading as a tool for emissions reduction.
Looking beyond 2025: the need for a global framework
- While short-term policies will inevitably reflect immediate economic and political pressures, the longer-term vision for energy requires more than reactive measures. Several critical elements must guide planning beyond 2025.
- Establishing a global GHG reporting system: without a unified system for measuring and reporting emissions, the global community risks fragmented progress. Such a framework must be transparent, enforceable, and inclusive, providing clear metrics for accountability.
- Accelerating energy innovation: recent policy initiatives in the UK and US underscore a strong commitment to accelerating energy innovation, particularly in energy storage, nuclear fusion and green hydrogen.
- Nuclear fusion advancement: the UK government has outlined a comprehensive fusion strategy aimed at positioning the nation as a leader in fusion energy development. This strategy includes the construction of the Spherical Tokamak for Energy Production (STEP) prototype fusion power plant by 2040, marking a significant step towards commercial fusion energy.
- Green hydrogen initiatives: the UK is actively developing a green hydrogen roadmap to integrate hydrogen into its low-carbon energy system. This initiative focuses on scaling up production and utilisation, recognising hydrogen’s potential to decarbonise sectors where direct electrification is challenging. Namibia, with German support, is developing a $10 billion green hydrogen project. This venture will construct wind farms and photovoltaic plants with a total capacity of 7 GW, aiming to produce 2 million tonnes of green ammonia and hydrogen derivatives by 2030, creating thousands of jobs.
- Fusion energy strategy in the US: the US Department of Energy has released its Fusion Energy Strategy 2024, supporting the Bold Decadal Vision for Commercial Fusion Energy. This strategy aims to accelerate the viability of commercial fusion energy in partnership with the private sector, focusing on closing science and technology gaps and preparing for sustainable commercial deployment.
- Clean hydrogen development in the US: the DOE has awarded up to $2.2 billion to support the development of clean hydrogen energy in the Gulf Coast and Midwest regions. This investment is part of a broader $7 billion federal grant initiative under the 2021 bipartisan infrastructure law, advancing low-carbon hydrogen as a key resource to combat climate change.
A true game changer: the impact of artificial intelligence
We are increasingly using artificial intelligence (AI), but what is coming next will be a true game changer. Artificial General Intelligence (AGI) is expected to emerge within the next five years, with the potential to transform how we envision and implement energy solutions beyond 2030.
- AGI technologies, like DeepMind’s GraphCast, demonstrate unprecedented accuracy in weather forecasting, crucial for optimising renewable energy production and grid management.
- Systems such as DeepMind’s Gnome, which has already identified over 2.2 million new inorganic crystals, could lead to breakthroughs in battery technology, solar panels, and other energy-critical materials.
- AGI’s capacity for polymathic learning could optimise hydrogen production pathways, advance fusion technology and scale green energy projects like Namibia’s hydrogen initiative.
- AGI could assist in designing infrastructure to withstand climate-induced challenges, ensuring consistent energy delivery amidst natural disasters.
- AGI may facilitate a unified global GHG reporting system by standardising data collection and analysis, enhancing transparency and enforcement.
A unified vision for a sustainable energy future
The energy transition is a marathon, not a sprint. Planning for the future requires a nuanced understanding of the present—recognising the impact of geopolitical realities and economic pressures while staying steadfast in the pursuit of sustainability.
As 2025 approaches, the energy sector must continue to innovate, adapt, and collaborate. The stakes are high, but with clear goals, a unified global effort, and a commitment to both environmental and economic sustainability, a just and effective energy transition is within reach
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