This 11-page report sets out our top ten predictions for 2025, across energy, industrials and climate. Sentiment is shifting. New narratives are emerging for what energy transition is. 2025-30 energy markets look well supplied. The value is in regional arbitrage, volatility, grids, AI and solar.
There is always a delicate balance in outlook notes. Erring on the side of caution yields predictions that are guaranteed to be true, but nevertheless add no value (‘up will be up, and down will be down’). Erring in the other direction can yield very interesting hypotheticals, but they will never happen (e.g., ‘zombie apocalypse’).
Hence this note is our attempt to reflect on everything that happened in 2024, everything we have learned as energy analysts over the past 15-years, and thus make predictions for what will happen in 2025+, which will be at least 50% novel and at least 50% probable.
Each page of the report covers a single one of our ten themes for energy in 2025, a prediction for what we think will happen, and is substantiated with our single best ‘killer chart’.
Four of our themes cover energy supply-demand, especially global energy balances, especially coal, LNG and solar where particularly interesting market trends are afoot.
Three of our themes cover how the narrative is changing in energy transition. ‘Decarbonize the world at any cost’ is starting to feel like a futile folly, a kind of environmental Afghanistan. We argue the narrative will shift sharply in 2025, as new themes emerge.
Our outlooks for AI and power grids in 2025 are on pages 7 and 8, including a preview for how our numbers will change, when we revisit these topics in greater depth in 1Q25.
Our wildcard scenario for 2025 looks at trade tensions, and how they may create not just downside for energy markets, but potentially interesting upside?!
Companies that do well amidst our themes for energy in 2025 will be those that focus on competitiveness, efficiency, low-cost energy, and building out capacity that their customers will pay for, per page 10. Our TSE company database has been updated for 4Q24 and now features 1,700 mentions of 600 core companies.