2025 Renewable Energy Outlook

The renewable energy landscape is undergoing rapid transformation, driven by technological advancements, global policy shifts, and an increasing demand for sustainable energy sources. In 2024, renewable energy capacity grew by a remarkable 15.1%, and 585 GW of new capacity was added, accounting for 92.5% of total global capacity expansion. This marked a record-breaking year for renewables, illuminating their important role in the energy transition. As we continue into 2025, this momentum continues to reshape the energy landscape. Renewables are increasingly influencing every aspect of energy production, including solar power, wind energy, emerging technologies like battery storage, and their integration into traditional sectors like oil and gas. In today’s article, we’ll explore the renewable energy outlook for 2025, highlight key trends shaping the industry, and discuss how these key trends play into the oil and gas sector.

Global Growth and Trends for 2025

Renewable energy is positioned for sustained growth this year, fueled by declining costs, stringent policies, and technological breakthroughs. The demand for sustainable energy solutions is rising dramatically across industries—including manufacturing, data centers, and direct air capture (DAC) facilities. For the oil and gas sector, growing fuel and lubricant requirements are anticipated as global initiatives and regulations intensify efforts to reduce dependence on fossil fuels. Oil and gas remain the largest contributors to carbon emissions, highlighting the urgency of transitioning to renewable fuels to meet climate goals.

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Technological Innovations and Advancements

As renewable energy solutions gain momentum worldwide, they are driving technological innovation and establishing new benchmarks for clean energy systems:

1. Policy-Driven Innovation: Federal initiatives are advancing renewable technologies capable of delivering 24/7 clean power. These include programs to aggregate industrial clean energy demand and implement transition tariffs, enabling large-scale deployment of advanced energy systems while protecting residential ratepayers.
2. Bioenergy and Sustainable Fuels: Advancements in biofuels and sustainable aviation fuels (SAF), providing renewable alternatives for sectors difficult to electrify
3. Oil and Gas Industry Adaptation: Oil and gas companies are increasingly investing in renewable energy projects and carbon capture, utilization, and storage (CCUS) technologies, though some are slowing direct renewables investment in favor of CCUS for better returns and emissions compliance
4. Integrated Energy Solutions: Emphasis on combining multiple renewable sources, storage, and advanced fuels to meet diverse energy demands and accelerate the transition to net zero

Additionally, according to the EIA, as of January this year, renewable energy and other biodiesel production capacity in the U.S. has grown to 4.6 billion gallons per year, reflecting a major expansion in renewables production driven by increased demand and supportive policies.

Policies and Requirements to Expect in the U.S.

In 2025, the U.S. renewable energy landscape is marked by major policy shifts and conflicting forces. At the federal level, there has been a rollback of clean energy mandates, including proposals to repeal the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA). Additionally, the U.S. has formally exited the Paris Agreement. Despite these shifts, state-level mandates continue to drive growth, with over 30 states enforcing Renewable Portfolio Standards (RPS).

Throughout the U.S., solar energy is dominating new capacity additions, while wind growth faces challenges. Despite federal policy favoring fossil fuels, the U.S. clean energy sector remains resilient, driven by state mandates and corporate demand.