To mark the close of 2024, Enverus Intelligence Research® created a roadmap to the 2025 energy transition landscape, covering power, subsurface, low-carbon fuels and energy transition investment.
As the industry continues to evolve, we find these key themes emerging in 2025:
- EV battery costs will fall below the $100/MWh cost parity milestone. Direct air capture (DAC) is approaching the peak of inflated expectations with significant challenges ahead, while green hydrogen and offshore wind will lag expectations. Small modular reactors require substantial regulatory reform to reach viability.
- President-elect Donald Trump’s proposed tariffs would drive up domestic renewable equipment prices. Tax credits for blue hydrogen, EOR, and solar and wind projects are least at risk of elimination, while subsidies for green hydrogen and geothermal are the most exposed.
- Factors like project economics, available transmission capacity and offtake agreements will be crucial in defining project success. As the Class VI permit backlog clears, we expect a record number of Class VI permit approvals in 2025.
- Decarbonization targets will continue to drive demand for low-carbon products. Select voluntary markets are expected to grow despite lower modeled returns. Sustainable aviation fuel (SAF) is poised for growth, with a quadrupling in North American capacity from 2024-2025.
- Rising battery adoption is reshaping markets, driving the energy transition and challenging the profitability of natural gas. As capacity outpaces ancillary market eligibility, operators will shift toward arbitrage-driven models, competing with dispatchable capacity.
- Load is projected to grow 1.2% Y/Y and 38% by 2050, driven by artificial intelligence adoption and broader energy transition and electrification trends. Motivated by Big Tech’s willingness to pay, nuclear, geothermal and natural gas with CCS will increasingly compete for airtime.
Highlights
- Power and ET M&A Review – Deal Activity Tempers as Policy Uncertainty Mounts – The surge in AI technology is driving rapid growth in data center development. Successful siting of a data center depends on energy availability, site quality and energy cost. In this report, Enverus Intelligence Research provides a workflow based on critical factors affecting these key pillars, leveraging Enverus PRISM® P&R suite data and analytics.
- 2025 Global Energy Outlook – Demand for computing power coupled with the surge of AI is prompting technology giants to pursue reliable, low-carbon power sources for data centers, fueling a resurgence in interest in nuclear power. EIR evaluates various IPP’s existing nuclear energy portfolios and their opportunities for large-scale deployments.
- Tracking the Energy Transition Market – Nuclear, IPPs Surge; Solar Installers Struggle Amid Policy Shifts – The 3Q24 edition of the ETR team’s equity tracking report provides coverage across various energy transition sectors as well as integrated traditional energy businesses.
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. See additional disclosures here.
