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Utility Dive: 2025 Renewable Energy Outlook - Full Speed Ahead as Second Trump Administration Begins

Posted by Diana DiGangi on Jan 21, 2025

Utility Dive discusses the outlook of the renewable energy sector in 2025, addressing both the positive trends and potential challenges the industry may face under a second Trump presidency. United's President and CEO Heather O'Neill offered key insights into the current and future state of advanced energy, highlighting the scale of investment and growth that the industry has experienced over the years.

The renewables industry begins 2025 with the Inflation Reduction Act continuing to spur record investment, and spiking load growth providing new opportunities for deployment. At the same time, interconnection queues across the country remain clogged, siting, permitting, financial and other challenges continue, and industry critic Donald Trump just began his second term as president.

“It’s an interesting moment, because there is this really rapid change, and yet we’re stuck in some really key ways,” said Heather O’Neill, president and CEO of Advanced Energy United. “The interconnection queue is one really clear example where, yes, there’s some progress — FERC’s putting out reform measures — and yet we’re not unleashing the full promise and the economic opportunity and activity that we could.”

After decades of flat load growth, U.S. electricity demand could rise 128 GW over the next five years, according to a report last month from Grid Strategies. At the same time, the number of new transmission interconnection requests has risen by 300% to 500% over the last decade, with 2.5 TW of clean energy and storage capacity currently waiting to connect to the grid, said an October report from the Department of Energy.

However, O’Neill said, the “the macro trends are incredibly positive … We are in the middle of an energy transformation.” She attributed some of her optimism to the scale of investment and growth that the industry has been seeing. 

The energy storage sector is especially dynamic right now, O’Neill said: “A few years ago, [there was] very little in the way of storage capacity showing up, but with so much innovation in the technology, the cost curves are coming down. When we think about how to manage load, storage plays a key role in that.”

Global energy storage installations boomed 76% in 2024 and are projected to continue that streak in 2025, according to a November report from BloombergNEF, but BNEF noted that growth may be impacted by “uncertainties stemming from the new Trump administration.”

Trump has spoken out against electric vehicles and said he will “rescind all unspent funds under the misnamed Inflation Reduction Act.” Congress is expected to try to claw back EV tax credits from the IRA, which could impact the battery industry. Trump has also said he would end offshore wind “on day one” and embraced oil and gas generation, but vowed last month to expedite federal permits and environmental reviews for construction projects that represent an investment of $1 billion or more — a move that could benefit clean energy.

New demands on the grid

Regardless of how Trump’s second term shapes the U.S. generation mix, his administration will be dealing with an anticipated 3% annual average load growth over the next five years — a level which hasn’t been seen since the 1980s, according to a December report from Grid Strategies

“The need to meet load growth on the electric side is not going away. And any administration — Republican, independent, Democratic — foremost in their mind is going to be a strong resilient economy,” said Paul DeCotis, a senior partner and head of East Coast energy and utilities at West Monroe. “That’s going to be dependent upon a best-in-class electric distribution grid.”

Surging load growth is driven largely by data center demand, which a December report from Lawrence Berkeley National Laboratory found has tripled over the past decade and is projected to double or triple again by 2028. The increase in demand is also the result of industry electrification and growth in domestic manufacturing.

That growth “means continued capital investment in the [energy] industry, regardless of the administration,” DeCotis said. “I don’t think any administration is going to want to come in and all of a sudden see brownouts and blackouts and not enough capacity to meet demand or have to stall demand and the job growth that goes with it, because they can’t meet energy needs.”

O’Neill said she believes that states will also continue to drive the clean energy transition forward, as they’re where “energy policies happen …. where the investments become real.”

State governors and commissioners “want manufacturing in their state,” she said. “They want data centers in their state. The siting reform conversation is one that I think is not a partisan conversation. It’s: how do we help unlock some of this desired economic activity? For us, the siting and building issues will be something that we’re going to work on in the states, regardless of the landscape in D.C.”

In addition to states and utilities, companies like Microsoft, Amazon and Meta are also helping to drive the demand for clean energy — investing billions in renewable energy deployment in addition to seeking nuclear and natural gas generation to handle load from their data centers.

Molly Jerrard, head of demand response at Enel North America, said she expects that in 2025, “significant load growth .... will challenge our grid’s flexibility and put the reliability of local systems to the test.”

“Combine this with aging infrastructure, congestion, and the uptick in climate-driven grid stress, utilities and grid operators will need to put a bigger focus on adoption of demand response programs and distributed energy resources to address these challenges and increase grid stability,” Jerrard said.

However, she said, “inconsistent data access standards” from utilities continue to limit the scalability of virtual power plants, a potent demand response solution.

O’Neill is excited about VPPs, she said, as she sees “a ton of innovation” flowing into the sector and expanding the ways that VPPs can offer grid flexibility.

“We’re seeing virtual power plants across different regions of the country — whether it’s coastal or Texas — where you’ve got utilities and commissions really putting virtual power plants to the test,” she said. “They’re managing the load, they’re shaving peak loads, and they don’t have to build as much [generation].”

Read the full article here.

Topics: United In The News, Heather O'Neill