We are already well into 2025. The utility industry, more specifically the electricity generation and distribution segment is at an inflection point . The sector is witnessing a continuous increase in demand for energy. Consumers are becoming smarter, as their expectations continue to evolve. Trends like sustainability and green energy are taking over in leadership and political forums. Add to that the transformative developments in technology — AI, ML, Edge computing, etc. Utilities are often caught between regulatory mandates, changing energy policies and market expectations. Keeping a note of these trends can help them implement relevant energy plans for the next decade or so.
Let’s take a look at some of the utility trends that are shaping up the conversation in 2025.
Utility Trends to Look Out for in 2025 and Beyond
The demand for energy will continue to rise, but not uniformly
Letting the cat out of the bag —- the utility industry is at a crossroads. ESG (environmental, social and governance) topics have long been a part of C-suite discussions. However, the rising energy demand curve poses a challenge. Moreover, demand is neither predictable nor linear. Factors like extreme weather, rising number of EV vehicles and industrial process electrification could lead to an escalation in demand. To put this perspective in numbers, the year 2024 saw a 4% increase in global energy demand. As the world experienced an unprecedented increase in global temperature, this surge in fact, came as no surprise.
Another component leading to rising demand in energy — data centers. Everyone is familiar with the explosive growth seen in AI workloads, and digital services. Businesses and individuals alike are using AI tools for their needs — whether personal or professional. Compared to conventional cloud solutions, these tools consume 5-10 times more energy per rack. Training a single LLM (large language model) generally consumes millions of KwH over its lifecycle. Now imagine the massive amount of energy load since these models are continuously being retrained.
The list of growing demands is pushing key utility players to adopt new strategies —- Demand response programs, integrating DERs (distributed energy resources) and smart charging technology to name a few. Consumers are also being encouraged to modify their consumption behavior, and in turn, incentivizing them in the form of rewards. Energy demand will not fade away. The agenda remains the same- optimizing energy use and reducing strain on the grid.
AI will be integrated into utility workflows as a core layer
Be it smart grid management, asset maintenance or delivering the best service —- the role of AI in the energy landscape necessitates itself. Businesses are realizing we have now moved past the AI ‘experimental phase’. Today, AI is no longer just a back-office analytics tool. It is an added operational layer—- embedded into the grid, substations, service platforms, smart meters, dashboards, etc. Predictive maintenance, forecast into energy demand, or personalizing the consumer experience; some of the use cases have already been established.
AI and ML models can be trained to assess incoming data points. These tools can also analyze external factors like consumer behavior, weather patterns, global and domestic market prices. Utilities can reduce their overall expenses and increase equipment runtime, as they maintain an equilibrium of supply and demand.
Many of the forward-looking utilities have already begun testing and implementing AI into their everyday operations. What’s important for utilities to focus now is not the adoption of this transformative technology. The highlight should be laid on data readiness. The AI requires clean, up-to-date, and interoperable data to push out efficient results. Data security and accessibility needs to be at the top of their utility priority list—- be it from SCADA, AMI, or DERMS.
As AI continues to open up new forms of utility efficiency, its popularity will only continue to grow. The global AI in the energy market is expected to reach a valuation of $14 Billion by 2029 —- an almost 3x spike from $5.4 Billion in 2023. The onus remains on utilities to integrate solutions that allow them to feed timely and relevant data to AI technologies. Real-time data analysis, price updating based on supply and demand, streamlining staff and workforce planning, reducing downtime, etc, to name a few.
Protectionism politics will impact policy and frameworks— like it or not
Unless you are living under a rock, you would probably be familiar with the rise of protectionism policies around the globe. Newsrooms and tabloids are filled with headlines of heated exchanges between nations with regards to increased tariffs and sanctions. Turbulent geopolitical factors will also impact the energy industry. Today, these issues are no longer fringe concerns, but core to utility strategies. Countries will start prioritizing domestic energy security against the backdrop of uncertain geopolitical dialogues.
Low-cost energy solutions like DERs (solar, wind and battery technology) will see a rise in demand. In 2024, China invested a staggering $940 Billion towards clean energy projects.
Apart from allowing governments to gain energy sovereignty, this investment also fits along the lines of green energy politics.
There is also however, a different side to this discourse. Countries that possess large reserves of rare earth minerals —- cobalt, nickel, lithium, will leverage their demand as bargaining tools. Driven by increasing demand for EVs, the demand for battery technology will continue to grow. There are no two ways about it. Global EV sales spiked by 25% in 2024, crossing 17 million. The annual battery demand also surpassed 1 terawatt-hour.
It is high time that utilities figure out ways to diversify the sourcing process. Dependence on one vendor may prove to be costly if they decide to run up their prices to take advantage of the burgeoning demand. Ensuring the stability of the supply chain will also include exploring new energy recycling initiatives and investments in alternate minerals. That being said, it is safe to assume that the race for energy self-sufficiency is on.
Before We Wrap Up…
Trends to the midway of 2025 have already made it clear. There is no single roadmap when it comes to utilities in achieving their goals- operational, financial, or regulatory. A pivot has to be made by utility executives to stay relevant and competitive. Technological integration will continue to be critical. However, the approach needs to follow the line of purpose and not hype. Agility is not something to be expected simply from operational frameworks. Talent and technological investments need to showcase this capability as well. Perhaps, then a utility company will lean into a smarter and resilient energy future —- overcome complexities, whatever they may be.
