2025 energy transition predictions: Wartsila| CPower and BayWa r.e

In the second of a series of articles, industry experts offer their insights into the trends and technologies they believe will come to the fore in the energy transition in 2025.

Today we feature the predictions of experts from CPower Energy, Wärtsilä Energy and BayWa r.e.

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Mathew Sachs, Senior Vice President of Strategy & Product at US-headquartered CPower Energy.

The number one driver for virtual power plants is going to be load growth driven by computing and facility load for AI and data centers.

AI is like a modern-day Manhattan Project. It’s become imperative for the US to lead, for both security and economic reasons. Given the security concerns, we would not be surprised to see the federal government get involved to ensure there’s 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.

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Ken Schisler, Senior Vice President of Law & Policy at CPower

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  do to make data accessible, the more scalable VPPs will be across the country.

Industry challenges

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 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.

Have you read?
Virtual power plants and the future of grid management

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Andrew Tang, Vice President of Energy Storage and Optimization at Wärtsilä Energy, on grid scale battery energy storage

In an effort to reach goals such as ambitious climate targets from COP29 and the rapid expansion of AI infrastructure, energy storage projects will continue to grow in size and scope.

The size of energy storage projects has been steadily increasing to the multi-gigawatt-hour scale and will continue to do so next year.

Energy storage systems will continue to be increasingly geared towards energy shifting, driven by the ever-growing penetration of intermittent renewable energy generation and the concomitant need to store energy for dispatch in times when supply and demand are mismatched.

At the same time, dedicated renewables firming requirements are popping up in a diversity of markets globally.  As these projects move closer to population centers, addressing challenges like noise mitigation and fire safety will become even more critical.

The growth of energy storage will continue alongside the drive for renewable energy expansion. We’ll see the supply chain evolve in 2025, with the industry moving toward further diversifying manufacturing resources to ensure that supply meets both customer cost and market requirements.

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Daniel Hölder, Head of Global Policy & Markets at global renewable energy developer BayWa r.e.

As 2024 came to a close, the urgency to address climate change was never greater. At the same time, our opportunity to avoid climate catastrophe is disappearing further out of reach. It is virtually certain that 2024 will become the hottest year on record, with climate disasters in Spain and Florida leading the UN to label 2024 a “masterclass in climate destruction”.

COP29 concluded with a blend of breakthroughs and disappointments - reflective of the challenges we face in uniting nations in the fight against climate change.

But there is reason to be optimistic too. For example, the EU has set its sights on becoming climate-neutral by 2050, while the UK has proposed to cut emissions by 81% by 2035.

In 2025 as we work towards these ambitious targets, we must turn the challenge of climate change on its head and talk more about the opportunities.

Global leaders, policymakers and stakeholders must come together to take decisive action, focusing on key objectives such as committing to the fossil fuel phase-out, investing further in renewable technologies and policies and embracing global cooperation and multilateralism.

Bigger and better should be the mantra for 2025. Because, whatever happens, it cannot just be more of the same, but a genuine turning point for our planet.

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