CPower Execs Predict 2025 Energy Trends

The energy industry faces uncertainty as 2025 draws near but key trends and issues provide some predictability.

For instance, as in 2024, demand for electricity will accelerate while generation capacity constricts. As a result, virtual power plants and other immediately available sources of clean, affordable and reliable energy will continue to expand as new generation is built.

Recognizing the importance of planning ahead to stay ahead, The Current asked CPower executives Mathew Sachs and Ken Schisler for their thoughts on the energy trends to watch in 2025. Their responses have been edited here for clarity and conciseness.

What industry challenges are likely to become a more important topic of discussion next year?

Mathew Sachs (Senior Vice President, Strategy & Product):

If it takes too long to improve the rules for VPPs or interconnections or fill in the blank with anything else that has a chance to solve our problems, the grid could move towards less-than-ideal states.

Customers in other countries are already going off the grid entirely because they don’t feel they can trust their grid and we’re starting to see that here in the U.S. too, like with data centers. Or maybe people will lose trust in the free markets and deregulated states could go back to regulated with vertically integrated utilities.  So, we should focus on reducing the friction that could lead to suboptimal outcomes by making it too hard for things to work, whatever that reason may be.

Ken Schisler (Senior Vice President, Law & Policy):

Roadblocks that were erected by the regional transmission organizations (RTOs) and independent system operators (ISOs) in their efforts to facilitate participation by distributed energy resources (DERs) under FERC Order 2222 will become evident and participation will be slow.

Although you may hear that DER participation models have been approved and implemented and that participation will be starting in the next year or two, the fact is that those models are far from being perfect and fulfilling FERC’s vision. And because the RTOs’ and ISOs’ implementation of Order 2222 have fallen well short of that vision for promoting participation in VPPs, the impacts will start to be seen.

What will drive growth in virtual power plants (VPPs) in 2025?

Sachs: The #1 driver for VPPs is going to be load growth driven by computing load for AI and data centers. AI is like a modern-day Manhattan Project. It’s the U.S. versus the rest of the world, particularly China. Maybe the federal government will even get involved in ensuring there is enough power for AI.

Wherever the supply comes from, we will have to deal with transmission and distribution constraints within the existing grid infrastructure. However, we can’t rapidly build out infrastructure, so we’re going to have to rely on resources we already have in the near-term. That means turning to VPPs, which can meet increases in demand now.

Schisler: Improving access to data is a key enabler of growth that is often overlooked in VPP deployment. However, data access issues have become a federal and state concern. The more that states and the Federal Energy Regulatory Commission (FERC) do to make data accessible, the more scalable VPPs will be across the country.

States such as California, Illinois and Texas have become smarter about how to give customers access to their electricity data, but it needs to be architected into systems if we are to scale. We need the ability to query 500 accounts at once instead of using unique logins for every individual customer, for example.

It’s not just a matter of making it seamless for the customer. It’s about making it seamless for energy agents too.

What trends do you see by industry segment?

Sachs: Everywhere I go, the number one talking point is how data centers are driving demand growth. There will be a particular focus on making sure we stay competitive with the Chinese on AI and don’t get hampered by a scarcity of power.

Schisler: Heavy industrial makes up a significant part of U.S. load and will be an important part of national energy strategy under the new president. For, an energy strategy geared toward increasing the global competitiveness of America’s manufacturing industry may include allowing manufacturers to make their flexible loads available in electricity markets. Leveraging their flexible loads would make them more efficient and be vital to re-energizing our country’s manufacturing base.

What will happen with energy demand and grid reliability?

Sachs: As much as the consumer doesn’t want electricity prices to go up, they really don’t want their grid going down—and one of those two things happening is inevitable. Higher prices signal a need for more generation and there could be a major grid failure in 2025 if we don’t take significant steps to maintain reliability amidst increasing demand.

Schisler: I expect to see electricity prices rising in the next year and then over the next several years as increasing demand from new sources of load like data centers and AI outstrips the ability to build the generation resources and transmission needed to keep up.

What do you foresee happening with policymakers and regulators?

Schisler: If grid operators don’t fix their problems, politicians will and they’re paying attention. We saw it in the past in Texas when the leaders of its grid operator, its board members and the commissioners of the state’s regulatory board all resigned after widespread power outages during Winter Storm Uri a few years ago.

Now, governors of several states in PJM have called upon the grid operator to help cut costs because they worry about soaring electricity prices impacting consumers. Meanwhile, across the country, the governor of California has signed an executive order to curb rising costs for consumers there, like by trimming state programs that could be inflating electricity bills.

When prices get out of control, politicians will do something to change it up.

 

To learn more about VPPs and how CPower can help you monetize your energy assets while supporting sustainability, improving grid reliability and increasing energy resiliency, call us at 844-276-9371 or visit CPowerEnergy.com/contact.