The global clean energy sector enters 2025 at a critical inflection point. Political shifts, technological leaps, and surging energy demand from AI are reshaping investment dynamics across renewables, storage, bioenergy, and carbon removal. This paper offers a sweeping yet incisive preview of the policies, markets, and megatrends that will define clean energy deployment in the year ahead.

Key Takeaways:

Asia Steps Up as U.S. Retreats: With a Republican-led U.S. scaling back climate ambition, China is accelerating decarbonisation—cutting new coal permits, expanding EVs, and driving global cost reductions in solar, storage and clean tech manufacturing.

AI’s Quiet Energy Revolution: Hyperscalers are fueling explosive demand for clean, always-on power. Forecasts suggest AI could drive up to 10% of U.S. electricity consumption by 2030—powering new opportunities in PPAs, long-duration storage and geothermal.

CDR & Bioenergy Get a Boost: With global carbon markets advancing post-COP 29, carbon dioxide removal (CDR) credits are entering the mainstream. EU antidumping tariffs are also lifting European bioenergy economics, with biomethane and RNG gaining ground.

Geothermal Re-emerges as Baseload Leader: Low-cost, dispatchable, and now more policy-supported, geothermal energy is positioned to meet AI’s base load demands and decarbonise urban heat networks across the UK, EU, and beyond.

Policy Watch: UK’s 2030 Clean Power Plan, EU’s Clean Industrial Deal, and China’s Green Pivot: Regulatory momentum is strongest outside the U.S., with the UK committing to a near-zero grid by 2030 and China enshrining hydrogen, renewables, and storage in law for the first time.

Key Takeaways:

Strategic Investment Surge: The EU targets over €100 billion in mobilised funding to future-proof clean manufacturing and energy independence across the bloc.

Policy-Backed Acceleration: New legislative frameworks—like the Industrial Decarbonisation Accelerator Act and a streamlined State Aid Framework—will fast-track project timelines and regulatory approvals.

Renewables, Reimagined: Wind, solar, and offshore technologies are front and centre, with 100GW of new capacity targeted annually and tailored support through the European Ocean Pact and PPA guarantees.

Hydrogen for Hard-to-Electrify Sectors: Backed by a fresh €1 billion call under the European Hydrogen Bank, hydrogen is positioned as a keystone solution for industrial decarbonisation.

A New Era of Electrification & Standards: With plans to raise electrification to 32% by 2030, upcoming laws on EV infrastructure, carbon labelling, and sustainability reporting will redefine industrial norms.

Key Takeaways:

Massive Flexibility Demand Signals Opportunity: The consultation estimates up to 50GW of long duration and 55GW of short duration flexibility needed by 2035—offering significant potential for investment in LDES, H₂-to-power, and CCS.

No Radical Market Redesign: REMA 2.0 discards more disruptive ideas like green power pools or marginal price splitting, instead choosing to evolve existing CfD-based mechanisms, providing continuity and reducing regulatory risk for investors.

Zonal Pricing Still in Play: While nodal pricing and local markets are off the table, zonal pricing remains under consultation, signalling potential future locational market signals—particularly relevant for storage, flexible assets and developers.

Decarbonisation Goal Holds Firm Despite Gas Additions:
The proposal includes short-term reliance on new and extended unabated gas generation, but this is framed within a firm 2035 decarbonisation goal—with transition pathways laid out for gas assets.

Implementation Timeline Reflects Policy Stability: Final responses are expected summer 2024, with implementation from 2025. Despite the upcoming UK election, the broad direction is expected to persist—reinforcing the UK’s status as a stable destination for clean energy investment.