2025 is set to be an eventful year with political shifts, geopolitical tensions, and rapidly shifting technological and economical trends. It is a time of uncertainty, but also one that presents many opportunities for those brave enough to seize them. Colm O’Neill and our Sustainable Futures team explain what this means for Ireland’s energy landscape.
Energy is more than a tool for emission reduction
Green was the key word for energy in the last decade with carbon reduction featuring on the top of the energy agenda for most Government’s worldwide. However, this has evolved in recent years as we have experienced major disruptions to our energy supplies and unstable markets.
Energy is no longer limited to a subsector of the climate crisis, but now a key part of national security, economic stability, and underpins future growth.
Energy independence
It is not just global crises that create uncertainty in the energy landscape. Exemplified by certain election results in 2024, there is an increasing global trend towards deglobalisation, trade wars, and import tariffs, which makes energy independence more important than ever.
As it stands, Ireland’s energy system remains exposed to geopolitical instability and fluctuations in the power market due to our import dependency for fossil fuels, which still accounts for over 80% of our energy consumption. As we saw during the energy crises, the effects on our economy, industry, and households can be severe.
Ambition needed in Ireland’s energy strategy
On the Governmental side, Ireland’s energy agenda currently sits under the Department of the Environment, Climate and Communications. Ireland’s energy policy is governed primarily by our ambition to decarbonise the energy system to limit global warming. While emission reductions are crucial, energy plays a broader role in the economy.
Ireland needs a progressive and ambitious energy strategy to continue our economic growth in order to attract further investment in technology and data centres, underpin an ambitious industrial growth ambition, and potentially exporting excess renewable energy abroad.
Obstacles to progress
Ireland is lucky that our geography supports significant renewable energy potential across onshore wind, offshore wind, solar PV, and biomethane. Developers are keen to invest and there is a rapidly growing energy demand from data centres, tech loads, and electrification. Unfortunately, due to a range of issues from resourcing of state bodies to planning objections, we have made limited progress in recent years.
Current geopolitical instability has led to some uncertainty across global energy investors. This presents an opportunity for Ireland create a positive environment for renewable deployment in Ireland.
Renewable energy is key
Where other countries may look to other sources of energy to underpin their energy independence, Ireland has only one option: Large-scale deployment of renewable energy supported by a robust supply chain for fossil gas to support the transition.
In order to achieve this, Ireland should create a dedicated Department of Energy as would be the case in many other developed countries. It is disappointing that the programme for government has not facilitate this, however, progress can still be made if energy independence and capitalising of our renewable energy resources are given appropriate priority.
Trends in the past year
Focus on Grid
Hydrogen
Biomethane
Carbon Capture
Nuclear Power
People Power & Elections
Policy & Planning
KPMG made a list of predictions for the energy landscape last January year, most of which materialised over the year:
- Focus on grid: ✅ The discussion on grid has penetrated through industry and is now a key concern for most sectors. Expect this to continue in 2025.
- Hydrogen: ✅ The discussion on hydrogen showed no sign of stopping. However, it might not have taken the direction many expected. Cost is a major barrier to adoption.
- Biomethane: ✅ 2024 saw the release of the National Biomethane Strategy and continued appetite from developers and offtakers. A very positive development.
- Carbon capture: ~ The expected emergence of widespread carbon capture discussion did not materialise, though it is increasingly seen as a possibility for industrial decarbonisation.
- Nuclear power: ✅ The next generation of data centres have spurred a resurgence in nuclear power, particularly in the US, as AI-technology demands vast amounts of stable power.
- People power and elections: ✅ As predicted 2024 proved to be full of changes in Government’s across the world with almost every incumbent government replaced. Ireland is a notable exception.
- Policy and Planning: ✅ 2024 was an eventful year for energy policy in Ireland with several significant publications and the passing of the Planning Bill was a positive conclusion to 2024
Trends for 2025
Interconnection & Markets
Data centres & 24/7 PPAs
Offshore
Smart Grid & Storage
From Climate to Climate & Enterprise
Hydrogen Reality
Climate Risk
Watch out for the following topics in the coming year:
- Interconnection and markets: The European energy system requires more interconnection and market rules that are set up for distributed renewable generation rather than traditional central generators. A serious discussion for this should emerge in 2025.
- Data centres and 24/7 PPAs: The advent of AI comes with large increases in power demands. Expect conditions for Power Purchase Agreements (PPAs) and possibly hourly matching. will Data Centres will also reignite the discussion on nuclear energy in Ireland.
- Offshore opportunities: After a lull in offshore developments in recent months 2025 could be the year of offshore wind’s rebound in Ireland.
- Smart grid and storage: Along with more physical infrastructure, smart grid solutions and energy storage are required to meet the increasing demands of the electricity grid. This should receive increased attention as the year progresses.
- From climate to climate & enterprise: Ireland could move away from energy primarily as a solution to decarbonisation towards the opportunity for commercial growth backed by green energy.
- Hydrogen reality: Hydrogen costs have not come down as had been predicted. Investors and developers face reality checks, but the new reality may allow hydrogen to find an effective role in the energy system.
- Black swan events: There is no indication that 2025 will be any more predictable than 2024. Large, unexpected events are likely to affect the energy landscape yet again in Ireland as well as globally.
How KPMG can help
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