2025 industry outlook: energy

Industry Insights

2025 industry outlook: energy

3rd February 2025

As Chief Executive of UK-wide business development membership organisation NOF, Joanne Leng MBE has a deep understanding of where the energy sector is… and where it is heading. Here, Joanne provides her perspective on what 2025 has in store.

What changes do you expect to see in the energy sector this year?

2025 could certainly be a defining year for our industry as change is anticipated with the need to move at increased pace to ensure we meet our net zero 2050 goals, whilst we drive energy transition and importantly ensure energy security.

The UK Government will soon consult on future of oil and gas licencing, the oil and gas fiscal regime, industrial growth strategy, and put into action the plans to accelerate investment in other energy sectors.

NOF, as a huge advocate of a balanced energy mix, continues to promote the benefits to our members of working across a mix of energy industries, driving forward the creation of an integrated energy sector supply chain which can be fleet of foot reacting to opportunities whilst continuing to develop a multi skilled approach.

The industry is changing rapidly and supply chain businesses must adapt and grow to meet future challenges, but let’s not forget there is considerable investment in the market at present and with investment comes opportunity.

What will be the main talking points in the offshore wind industry?

The UK offshore wind sector is expected to see significant growth in 2025, despite facing some ongoing challenges. In 2025, several significant offshore wind leasing rounds and projects are expected to progress. We will see the UK’s seventh CfD auction, Allocation Round 7, is also set to open for applicants in the summer of 2025.

Floating offshore wind remains important and is seen as crucial to the UK’s future energy mix, we are likely to see this momentum continue and a growing area of focus.

Will there be any changes to the National Grid?

We are all acutely aware of challenges with the grid, so the Clean Energy 2030 strategy, developed by the National Energy System Operator (NESO), is expected to be a major focus for the industry in 2025. The government has commissioned NESO to produce the first Strategic Spatial Energy Plan (SSEP) for the energy system, land and sea, in Great Britain.

A focus remains on energy storage and grid modernisation. There could be investment in battery storage as renewable energy capacity increases, energy storage becomes critical to balancing supply and demand.

In 2025, we may see announcements of new large-scale battery storage projects or new technologies that support grid stability and flexibility.

A smart grid development could be put in place for a smarter, with a more resilient energy grid being rolled out, integrating new digital technologies, demand-side response, and AI-driven systems to manage increasingly complex energy flows.

Are changes on the horizon for nuclear energy?

The UK is expected to continue its push for new nuclear power plants, as nuclear energy plays a crucial role in the transition to a low-carbon energy system. There may be further announcements of plans for new nuclear for Small Modular Reactors (SMRs) and Advanced Modular Reactors (AMRs), plus the Government has announced a record investment to accelerate the development of fusion energy

The Government also intends to publish an update to its Civil Nuclear Roadmap by the end of 2025.

Will further progress be made in Carbon Capture, Usage and Storage (CCUS) and hydrogen in the UK?

The UK Government is expected to continue promoting CCUS technology to capture carbon emissions from power stations and industrial sites. New funding rounds for CCUS projects may be announced, as well as partnerships between government and private sector stakeholders to accelerate deployment. There is also movement on The East Coast Cluster in Teesside. The Net Zero Teesside Power project, part of the East Coast Cluster, is scheduled to start construction in 2025 which could be game changing.

Meaningful steps are also being taken to develop a hydrogen market in the UK. The UK is investing heavily in hydrogen as part of its decarbonization strategy. In 2025, there could be major announcements around the development of green hydrogen production plants, infrastructure projects like hydrogen pipelines, and government incentives for the adoption of hydrogen in heavy industry and transportation

What does the picture look like for North East England?

For North East England, which has now been earmarked as a priority area for future offshore wind developments in a 2024 Crown Estate report, we press ahead with our campaign to bring more leasing rounds to the region for more shallow fixed developments, new deep fixed and potentially floating projects.

Many stakeholder conversations with industry and Government continue through the strong cluster which is Energi Coast, owned and operated by NOF.

What are NOF’s plans for 2025?

NOF continues to thrive and 2025 is going to a busy one as the team seek out new opportunities for members and build those all important relationships with project developers. We will be rolling out five major events: The Energi Coast Supply Chain Showcase; the Nuclear Conference and Exhibition; the Scotland Supply Chain Conference and Exhibition; the Net Zero Conference and Exhibition; and of course, Offshore Wind North East.

Other events will be added across the year as clients confirm dates with us.

NOF, however, isn’t just about events, there is so much more going on behind the scenes from face to face meetings with members, marketing support to raise members’ profiles within the industry, the business introductions we make on a daily basis plus lots of sector intelligence pushed out on a regular basis

One thing is for sure, the NOF team are in full planning mode for the 12 months ahead and I have no doubt that we will see further announcements in this exciting industry which we hope will lead to new business for our members.

 

NOF is the strongest energy network in the UK and helps to make valuable connections between businesses in the global energy sector. It works on behalf of its UK members and a network of partners to put companies of all sizes in touch with the best and most innovative supply chain businesses in the UK.

For more information on NOF, visit www.nof.co.uk