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The Forum says the sector will accelerate further in 2025 Industrial policy, AI’s high electricity demands, nuclear technology and innovation are the four top themes to track in the clean energy sector this year, says the World Economic Forum (WEF). Last year, saw an impressive acceleration of investment in clean energy solutions despite the increased cost of financing and geopolitical headwinds, says WEF. Investment into solar photovoltaic technology ($500 billion) surpassed the amounts once again pumped into all other generation sources in 2024. At the same time, investment in battery storage grew by more than 20% and exceeded $50 billion. Energy storage topping the emerging technologies list The sectors involved in clean hydrogen and sustainable aviation fuels announced projects and off-takes while advanced nuclear technology regained momentum. Rapid cost reduction drove much of the growth, making project economics increasingly attractive, says WEF. The Forum points out that of all the emerging technologies, energy storage has made great strides. The cost of lithium-ion batteries has dropped more than 90% over the past decade, and in 2024 alone, it fell 40%. “At the same time, the rise in clean energy spending is also underpinned by strategic elements: major economies are deploying new industrial strategies to spur clean energy manufacturing and establish stronger market positions,” says WEF. “These shifts set a very dynamic context for 2025.” No single technology will solve the energy transition alone; a mix of solutions will be needed WEF’s top four focus areas to watch in the energy sector Industrial policy Connections between energy, trade and manufacturing are deepening. The new emerging energy economy presents major opportunities for countries looking to manufacture clean technologies, their components and related materials. Increasingly, governments and populations value things such as jobs, manufacturing, energy security and cost; they prioritise these over emissions reduction. In 2025, governments will further shape energy transition policies to support their industrial and economic ambitions. We will see broader, more integrated policies targeting jobs, investment and advanced energy investments’ broader economic impact. AI’s increasing impact on energy The computational power needed to sustain AI’s growth doubles roughly every 100 days, driving an exponential increase in the number of data centres required globally and associated energy use. AI and data centres will thus become a key driver for electricity demand growth. It is not just about volume but also timing and location. Data centres need a reliable, stable power supply around the clock, challenging the industry’s emissions reduction goals. Hence, there will be a race to find and acquire data centre sites with abundant, clean and reliable energy supplies at scale. In the big tech industry, the last 12 months have seen increasing investment in advanced nuclear technology solutions, from small modular reactors to fusion. However, these promising options will only be able to deliver energy in the 2030s. Driven by immediate needs, the industry in 2025 will also be increasingly deploying currently available solutions, such as storage, clean hydrogen and wind and solar. Nuclear energy at a tipping point In the past one to two years, attitudes toward nuclear energy have significantly shifted. Today, at a societal level, many activists agree with pragmatists that nuclear energy is an integral part of the energy transition. Energy needs are growing fast in the economy, driven by AI, population and economic growth. At the technological level, small modular reactors and fusion present advanced options. This has created momentum, and many people are talking abouta nuclear renaissance. However, so many pieces need to fall into place, from skills to regulations to financing and the industry often still faces many of its old challenges. In 2025, we will see government and industry action to accelerate the nuclear renaissance in “old” nuclear countries, such as France and the United States and new entrants, including Poland. |
