The energy, utilities, and resources (EU&R) sector stands at a transformative crossroads as we navigate the complexities of geopolitical shifts, accelerating climate change, and rapid technological advancement. In 2024, the sector witnessed the race to secure critical metals for renewable energy, high-profile consolidations in oil and gas, and the rise of AI-driven solutions in utilities. <\/p>\n\n\n\n
As we look toward 2025, the stakes are even higher. This year will bring unprecedented challenges and opportunities, from bridging massive investment gaps in wildfire prevention to leveraging data-driven decision-making and expanding virtual power plants. Here\u2019s what is defining the \u00a0future of the EU&R sector.<\/p>\n\n\n\n
After an intense 2023-2024 fire season<\/a>, investments in wildfire prevention, mitigation, and response will increase substantially – but will remain an astonishing 100 billion below the target for wildfire prevention.<\/p>\n\n\n\n While slightly below the average of previous years, wildfire events were unprecedented in terms of fire carbon emissions (16% above average<\/a>) and increased in scope, spawning the largest wildfire in the European Union (Greece), record-breaking fire extent and emissions in Canada, drought-driven fires in South America, and deadly wildfires in Hawaii and Chile where hundreds of people died.<\/p>\n\n\n\n Wildfires present a double-sided risk to the industry. Along with significant damage to equipment in the field, the same infrastructure may cause a fire, such as transmission and distribution lines making contact with vegetation to trigger an event.<\/p>\n\n\n\n In 2025, many utilities will invest proactively in wildfire mitigation. For example, Pacific Gas & Electric plans to invest approximately USD 18 billion, while Southern California Edison will spend about USD 5.8 billion. Yet even these substantial budgets fall short, with an investment gap anticipated of approximately USD 100 billion<\/a>.<\/p>\n\n\n\n Many EU&R companies will rely on technology to bridge the gap, from existing systems such as enterprise asset management (EAM) to ensure equipment is running and maintained optimally, to innovative advances that leverage operational data, automation, and remote monitoring. Examples include:<\/p>\n\n\n\n These and other technologies support additional efficiencies that will help offset 2025 budgeting shortfalls, extending the ability of EU&R companies to detect and respond to potential wildfire events before they occur.<\/p>\n\n\n\n Many EU&R companies struggle to justify business case rationale when proposing new capital investment projects. With little data to put behind these decisions, gaining the support of investors and regulators is difficult at best.<\/p>\n\n\n\n Basing such big decisions on intuition and ballpark estimates is no longer adequate, especially when you consider that a staggering 91.5% of large projects go over schedule, budget, or both<\/a>.<\/p>\n\n\n\n Some EU&R organizations leverage end-to-end asset lifecycle management, including Industrial AI<\/a>, asset investment planning, predictive maintenance, and other technologies to better inform business decisions and investments.<\/p>\n\n\n\n Data-based decision-making ensures investment decisions are sound and that proposed projects are worthwhile. The model examines and considers every variable, for example, how to adjust if an unexpected event such as a wildfire or flood unbalances the budget.<\/p>\n\n\n\n The quality of a funding or rate case proposal\u2014and the likelihood it will succeed\u2014is easily quantified by the data used to build it.<\/p>\n\n\n\n An effective asset lifecycle management solution involves data that supports operational, tactical, and strategic decisions.<\/p>\n\n\n\n Key features include:<\/p>\n\n\n\n Following the acquisition of Copperleaf in 2024, IFS is delivering the market\u2019s first truly end-to-end asset lifecycle management solution for EU&R organizations. Learn more<\/a>.<\/p>\n\n\n\n As the worldwide grid becomes more decentralized, EU&R companies are implementing virtual power plants (VPP) at an astounding rate. Market demand is estimated to reach USD 6.2 billion by 2028<\/a> with a CAGR of 21.5%<\/a>.<\/p>\n\n\n\n Attributed to the falling price of solar photovoltaic modules (down 80%<\/a>) and gains in capacity (from 40 GW to more than 600 GW<\/a>) over the past few decades, critical drivers behind the global VPP market include increases in:<\/p>\n\n\n\n By leveraging VPPs, EU&R companies aggregate or consolidate the increasing number of \u201cprosumer\u201d renewables connecting to the primary power grid. These connections are integrated into the larger control center, making it easier to manage the high volume of small interconnections while gaining important insights into the volume and frequency of the energy produced.<\/p>\n\n\n\n VPP implementations support different use cases across regions. Here are some examples:<\/p>\n\n\n\n United States:<\/strong> The Department of Energy supports VPP projects for grid flexibility, affordability, and resilience. Active projects incorporate solar panels, battery storage, and electric vehicles.<\/p>\n\n\n\n Europe:<\/strong> Germany uses VPPs to integrate renewable energy sources (wind and solar) into the grid.<\/p>\n\n\n\n UK: <\/strong>The UK uses the model to balance supply and demand, especially during peak times.<\/p>\n\n\n\n Australia<\/strong>: With the high penetration of rooftop solar, VPPs help to manage the variability of solar power and provide grid services such as frequency regulation.<\/p>\n\n\n\n Japan<\/strong>: VPPs manage demand response while enhancing grid stability. The country is also considering VPPs to improve energy security and renewable energy integration.<\/p>\n\n\n\n The explosion of independent energy producers impacts the scope and scale of the operation, adding to the transformers, substations, poles, and millions of other assets already on the grid.<\/p>\n\n\n\n EU&R companies must go behind the meter to manage solar panels and other connected components, modeling and managing within the network to determine load profiles and to inform the projected supply of energy to offset demand.<\/p>\n\n\n\n Implementing VPPs necessitates further investment in end-to-end asset lifecycle management to adequately support such an expansive model.<\/p>\n\n\n\n As we move ahead, many unknowns await including the geopolitical landscape and the progression of climate change. By leveraging advances in technology \u2013 including Industrial AI \u2013 and investing in infrastructure, EU&R companies benefit from a flexible and agile business model to help weather the opportunities and challenges that lie ahead.<\/p>\n","protected":false},"excerpt":{"rendered":" Carol Johnston, VP Energy, Utilities, Resources at IFS, explores how AI, asset optimization, wildfire mitigation, and virtual power plants are shaping the EU&R sector in 2025<\/p>\n","protected":false},"author":3,"featured_media":1377,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[900,553,428],"tags":[1498,1499,434,1500,1055],"class_list":{"0":"post-1376","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-commentary","8":"category-people","9":"category-power","10":"tag-carol-johnston","11":"tag-energy","12":"tag-ifs","13":"tag-resources","14":"tag-utilities"},"_links":{"self":[{"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/posts\/1376","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/comments?post=1376"}],"version-history":[{"count":0,"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/posts\/1376\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/media\/1377"}],"wp:attachment":[{"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/media?parent=1376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/categories?post=1376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cheeltech.com\/utilitybusinessmena\/wp-json\/wp\/v2\/tags?post=1376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Offsetting budget gap with environmental technology<\/h4>\n\n\n\n
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Data-driven decisions transform asset optimization: Investments in asset optimization technology will increase by 15% to support data-based decision-making.<\/h4>\n\n\n\n
Full-cycle lifecycle management<\/h4>\n\n\n\n
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The adoption of virtual power plants will increase over 20% by 2030.<\/h4>\n\n\n\n
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Virtual assets<\/h4>\n\n\n\n
Summary<\/h4>\n\n\n\n