Energy 2025 – Expansion of Fossil Fuels or Carbon Reduction?

Now that the election is behind us, we have an opportunity to anticipate the possible effects on the energy industry under this new administration. What strategies will be impacted? What will remain the same? What opportunities can we take advantage of in 2025? This blog is meant to dig into these questions and provide some perspectives as the energy industry continues its evolution into the new year. 

A good place to start is President-elect Trump’s early nominations for key industry positions. He nominated Chris Wright as Energy Secretary, who has a long history as a leader and innovator in the energy sector. Mr. Wright brings industry experience related to fossil fuels, specifically fracking operations of late, but also nuclear (small modular reactors) and renewables. Additionally, Trump has tapped North Dakota Governor Doug Burgum as the head of the Interior Department, who has ties into both fossil fuels as well as renewables. Pending Senate confirmation, both individuals bring energy and technology experience to government positions that could help advance the industry through cutting the “red tape” associated with the current fossil fuel policies as well as ensuring a domestic approach to energy generation and broader affordability for consumers. 

Getting beyond the leaders who will help shape the next four years, let’s dive into some early perspectives regarding what may change and what may remain the same in the coming years.

What may change?

Easing of Regulatory Policy for Fossil FuelsExpansion of Nuclear for GenerationIncreased Investment in Carbon Capture and Storage (CCS)

Easing of Regulatory Policy for Fossil Fuels

With numerous references to drilling while on the campaign trail, Trump and his named leaders are likely to adjust policy and regulations that limited fossil fuels both from a domestic production perspective as well as use in the immediate generation mix. Renewable innovation and integration are expensive alternatives to fossil fuels, especially when storage is added to the equation. The opportunity to leverage fossil fuels will allow for more affordable energy for all consumers and promote growth across industries. As a result, current contracts and organizations who are focused on renewable generation, storage, and interconnection may face headwinds. 

Expansion of Nuclear for Generation

Nuclear energy is likely to become a larger piece of the generation mix with a Trump Administration at the helm. Continued advances for Small Modular Reactor (SMR) technology as well as the opportunity to expand use of existing nuclear facilities may help to address expected load growth. Amazon, Google, and other large technology organizations are already looking at opportunities to address the continued need for load associated with data centers, which ties to the continued adoption of AI capabilities across industries.  

Increased Investment in Carbon Capture and Storage (CCS)

As an offset to carbon emissions associated with continued or expanded use of natural gas, coal, and the like, the new administration may look toward carbon capture and storage technologies as a compromise. These technologies may receive additional funding or even government incentives that would allow power generation entities to manage short-term emissions targets. On a positive note for utilities, these technologies provide a path for reduced investment given they do not require a complete overhaul of existing generation facilities to meet projected load growth. 

What may remain the same?

Continued Hardening and Resiliency InitiativesUnchanged State-Level Regulatory PoliciesSustained Desire to ‘Go Green’

Continued Hardening and Resiliency Initiatives

Independent of government leaders, the challenges associated with aging infrastructure and grid reliability remain key concerns. Continued investment in new grid assets is required to ensure reliable delivery of power. Hardening programs including undergrounding at-risk overhead lines are already top of mind for utilities after an active hurricane season that saw multiple named storms make landfall and produce significant damage. Energy sector players will continue to seek means for hardening and strengthening grid operations into 2025.  

Unchanged State-Level Regulatory Policies

Despite possible federal policy and regulatory changes, state level targets and regulatory requirements may continue to be a consideration in the broader strategy and integrated resource planning as we move through the next four years. Carbon emissions and renewable energy targets may remain intact across many states, which will drive continued investment in clean energy solutions and projects. This is also a sound approach as the federal landscape may swing back with the next election, so utilities and energy players may benefit from staying the course on current strategic initiatives. 

Sustained Desire to ‘Go Green’

Many corporate organizations and residential customers will have sustained interest in carbon reduction and supporting initiatives tied to climate change. The energy industry will need to continue addressing these desires and the associated challenges with carbon offsets and renewables generation sourcing among others. As a result, customer offerings are likely to continue alignment with managing the load curve through efficiency, demand response, and creative rate structures to reduce costs. These programs are also likely to support continued “green” investment such as the advancement of energy storage in support of renewable energy generation. 

How can UDig help you progress on the opportunities?

At the highest level, the new administration is going to have to balance economic growth and carbon reduction. This is likely to materialize in policies and government support that impact the go forward generation mix. These shifts will have downstream impacts on operations and serving customers, from residential to large commercial and industrial customers. So, how can a partnership with UDig drive impact and value related to these future changes? 

UDig excels in several offerings that can help you advance your strategies and execution related to the opportunities outlined above.  

• Custom application development and modernization can provide tailored solutions that operate efficiently and with a lower total cost of ownership to meet business objectives. For example, building solutions to drive load forecasting as well as downstream transmission and distribution planning may be a focus given the need for more frequent reviews and flexibility with a changing landscape. Many of these processes are supported with complex spreadsheets and tribal knowledge. UDig can partner with you to develop modern solutions with cloud capabilities to drive more accurate and faster models for forecasting and planning. These solutions provide flexibility for the future including considerations for generation mix as well as interconnected generation sources on the distribution grid. Finally, these solutions can help limit the risk exposure associated with undocumented processes, analysis, and knowledge capital loss with an aging workforce. 
• Data strategies and advanced analytics solutions provide actionable insights, specifically in situations where core application data needs to be aggregated for cross business unit analysis and decisioning. Most energy organizations work with large volumes of data and are challenged with serving business requests in a timely manner and with accurate, trustworthy data. The need to establish flexible analytics platforms and reporting requires a backbone of modern data technologies and solutions. 
• Development of AI solutions will enhance productivity through automation and improving timely access to information. AI solutions may serve your current field crews by eliminating hard-copy paperwork and data entry as an example. Or your end customers may leverage these solutions to more easily find information on programs and rate structures that align to their needs. Many of the AI solutions will improve internal and external customer experiences while reducing expenses. 

UDig would welcome the opportunity to partner with you if these offerings resonate with your vision for 2025 and beyond. We are ready to help you drive impact and value as we navigate the road ahead in an ever-changing industry. Contact us here to dig in further.