Energy & Power Industry Outlook, 2025
An in-depth analysis of key trends, market dynamics, and growth opportunities shaping the Global Energy and Power industry in 2025.
Author: Chandra Mohan
Introduction to Energy & Power Industry
Energy & Power industry always considered as the primary growth engine for global economy, as it fulfils every other industry's basic requirements either with fuel or electricity or raw materials. And having the right combination of both these industries empowers countries with higher level of self-sufficiency and global power. Both of these industries are capital & technology intensive and also mostly depends on geological resources like coal, Oil & Gas and Uranium Reserves. The energy industry controls the complete process of extracting energy sources before processing them into power plant fuel for electricity generation that serves residential, commercial and industrial consumers. The International Energy Agency (IEA) reports that electricity production worldwide reached 30,169 TWh in 2024 and will exceed 35,000 TWh by 2028 as renewable energy expansion is in full swing due to Net Zero commitments.
The transition between energy sources in the Energy & Power sectors created an intricate market conditions that brought both advantages and potential risks. As an instance, Natural gas became essential for countries to use as their transitional fuel when they moved away from coal power; and with that, LNG market experienced a threefold price increase between 2020 and 2023 due to supply shortages and heightened energy security concerns, before prices settled at $12 to $13 per MMBtu during 2025 when market equilibrium was achieved. Nevertheless, energy security concerns remain, as a small number of countries control major gas reserves, while renewable generation continues to be intermittent. At the same time, long project payback periods for renewables, constrained financing availability, and uneven commercial viability across countries add further complexity to deployment. Consequently, the market expansion now depends more on regulatory support, strategic investments, and targeted funding opportunities than on basic market demand growth. Reflecting this strategic allocation, total CapEx in the global E&P and Power ecosystem reached approximately $2.5 trillion in 2024. Electricity generation accounted for roughly $1.0 trillion of which $760 billion was directed to renewables, while upstream and midstream oil and gas projects contributed $605 billion alongside substantial spending on electricity networks and battery storage. The large amount of diverse investments demonstrates how specific funding will propel technological progress and build infrastructure while supporting environmentally friendly expansion.
Strategic Relevance of Oil & Gas Amid Energy Transition
The current energy market shows increasing adoption of low-carbon power yet oil and gas supply systems continue to fulfill short-term energy requirements and drive industrial development. The U.S. and North Sea, Western Australia and Qatar maintain strong investments in upstream and midstream sectors which focus on liquefied natural gas and natural gas infrastructure development. The combination of long subsea tie-backs with infrastructure sharing, robotic automations and digital oilfield solutions enable producers to enhance recovery rates and extend asset operational periods while improving overall production & cost efficiency. The integration of transitional fuels with low-carbon solutions including carbon capture, utilization and storage enabled oil & gas upstream companies to support decarbonization efforts while maintaining revenue stability through conventional operations.
Crucially, the oil and gas industry's existing infrastructure, engineering capabilities, and workforce expertise have directly supported the rapid development of offshore wind and CCUS. Experienced offshore professionals, large-scale fabrication yards, and decades of offshore platform design & installation experience have been seamlessly adapted to accelerate deployment in these emerging sectors. However, the current investment cycle is widely expected to be the last major peak in oil and gas history, with CapEx projected to approach <strong>$870 billion</strong> between 2024 and 2025, marking its highest level since the <strong>$1 trillion</strong> peak in 2015.
A breakdown of capital expenditure across key oil and gas sub-sectors reflects the concentration of spending in upstream projects, supported by downstream and refining activity.
| Oil & Gas | Capex ($ Bn) |
|---|---|
| Upstream | 537 |
| Mid-Stream (LNG, others) | 68 |
| Refining | 130 |
| Other Down-Stream | 108 |
Sources: These capex are estimated on the basis of country level project values and utilizing IEA data
The growing number of national and global policies supporting Net Zero Emissions (NZE) targets leads to rising investments in renewable and low-carbon and green projects which recognize oil & gas as a transitional yet essential component of the changing energy landscape.
Key Segments of the Energy & Power Sector
The Energy & Power ecosystem is highly diversified, encompassing several critical sub-sectors, each with unique technological, financial, and regulatory characteristics. The primary segments include Power Generation, Oil & Gas, Refinery & Petrochemical, Green Energy, Battery, Renewable Energy, Energy Storage, E&P Technology, E&P Miscellaneous, and Energy Transition. Together, these sectors form a complex and interdependent network that drives global energy production, distribution, and consumption, while simultaneously shaping industrial growth, sustainability efforts, and geopolitical strategies.
Power Generation: This segment focuses on converting various energy sources into electricity, spanning coal, natural gas, nuclear, hydro, and renewables. Investment in grid infrastructure, generation efficiency, and carbon reduction technologies makes power generation a capital-intensive and innovation-driven industry.
Oil & Gas: Covering upstream exploration, drilling, production, and midstream transportation, this segment remains the backbone of global energy supply. Volatility in crude prices, geopolitical dynamics, and environmental regulations shape investment patterns and long-term planning.
Refinery & Petrochemical: This sub-sector transforms crude oil and natural gas into refined fuels, chemicals, and industrial feedstocks. Technological upgrades, process efficiency, and integration with downstream chemical industries are key drivers of growth.
Green Energy: Green energy initiatives include solar, wind, and hydroelectric power projects designed to reduce carbon footprints. Incentives, policy support, and falling technology costs are accelerating adoption worldwide.
Battery: This segment focuses on the development and deployment of energy storage batteries, including lithium-ion, solid-state, and emerging chemistries. Battery technologies are pivotal for electric vehicles, grid stabilization, and renewable integration.
Renewable Energy: Encompassing solar, wind, biomass, and hydropower, this segment is critical for achieving Net Zero goals. Investment patterns are influenced by government policies, technology cost reduction, and energy security considerations.
Energy Storage: Beyond batteries, energy storage includes pumped hydro, compressed air, and thermal storage systems. These technologies enhance grid reliability, support renewable integration, and enable demand-side flexibility.
E&P Technology: Exploration & Production technologies cover seismic imaging, drilling automation, reservoir modeling, and digital solutions. Innovations in this segment improve efficiency, reduce environmental impact, and lower operational risks.
Energy Transition: Focused on moving from fossil fuels to low-carbon and renewable sources, this segment spans policy-driven initiatives, carbon capture, hydrogen production, and digital solutions for optimizing energy efficiency. It represents the strategic future of global energy systems.
E&P Miscellaneous: This includes ancillary services such as pipeline maintenance, logistics, decommissioning, and consulting services that support upstream and downstream operations, ensuring smooth execution of energy projects.
Key Growth Drivers
The Energy & Power industry is being driven by the growing demand for renewable energy, advancements in smart grid technologies, and rising global electricity consumption. Investments in energy storage solutions and modernization of power infrastructure further accelerate growth. These factors collectively create a dynamic environment for innovation and expansion across the sector.
Power Sector Growth Driven by AI, Cloud, and Electrification
The global electricity utilities sector dedicated their investments to traditional demand growth factors including urban population expansion and electric vehicle adoption and industrial development and digital network development before 2023. However, the explosive growth of artificial intelligence (AI) and cloud computing has transformed demand patterns which now make data centers the primary force behind U.S. market expansion. Data center electricity usage is expected to observe above 12% CAGR from 2024 to 2030, reaching nearly 945 TWh and altering the structure of the power ecosystem. The massive power consumption increase requires substantial investments to build new power generation facilities and transmission systems, distribution networks, smart grid infrastructure and high-voltage direct current (HVDC) lines and advanced energy storage systems. The leading AI and cloud companies now build their own power generation facilities to achieve both power reliability and market leadership. At the same time, The rapid power grid development in India and Southeast Asia matches the efforts of developed nations to upgrade their power systems and optimize their existing capacity. Collectively, these shifts establish power sector expansion as one of the most critical drivers of global energy investment.
Low-Carbon Energy Transition and Technology Advancements
The worldwide commitment to reach net-zero emissions has led to changes in energy investment strategies which direct funds toward renewable power systems and storage solutions and low-carbon technology development. The European Green Deal and U.S. Inflation Reduction Act work together with industries to speed up project deployment through financial support for solar and wind power and battery systems and carbon capture and utilization and storage (CCUS) projects. The European Union supports emerging renewable technology commercialization through grant funding which accelerates market adoption and decreases financial risks for new technology developers
The combination of decreasing renewable energy prices and quick technological advancements creates new economic possibilities for projects. The world now operates its first 15 MW+ turbines while industry experts predict 20 MW-class turbines will become available during the upcoming decade. The implementation of these technological advancements needs substantial infrastructure development which includes strengthened ports and dedicated installation ships and advanced sophisticated substation systems and bigger transmission networks that include HVDC and HVAC systems to stabilize variable power sources in the power grid. Offshore wind development leads Europe while Asia-Pacific focuses on building up solar power and battery storage systems to boost energy reliability. These combined technological progress create a lasting growth trajectory which positions the low-carbon transition as the leading force behind extended global energy and power sector development. The power sector will experience multiple capital expenditure cycles because of the newly developed efficient renewable energy systems which include solar power and wind energy and battery storage technology.
Electricity Grid Expansion: A Fast-Growing Opportunity
The period from 2015 to 2021 saw electricity grid capital investment decrease from $332 billion to $310 billion because of reduced modernization activities and changing national priorities. But the worldwide focus on energy security since 2021 has triggered a rapid increase in investments which now demonstrate a growth rate exceeding 7.5% annually. The electricity grid development sector experienced a CAGR above 7.5% since 2021 while reaching $388 billion in 2024 CapEx and it will reach its peak at $650 billion between 2030 and 2032 to become one of the leading growth sectors in Energy & Power.
The market expands because of quick advancements in renewable energy systems, smart-grid technology and optimized transmission & distribution networks. The main investment sectors concentrate on digitalized grid management systems, demand-side flexibility solutions and cross-border interconnectors to create robust power grid systems. These initiatives support the global low-carbon energy transition by creating long-term infrastructure development paths that enhance operational excellence and market growth across worldwide electricity networks.
Energy Transition Opportunities – CCUS and Renewable Infrastructure
The worldwide transition to low-carbon energy systems generates substantial business prospects which span between Carbon Capture Utilization and Storage (CCUS) technology and renewable energy infrastructure development. The CCUS ecosystem grows swiftly because of worldwide Net Zero pledges and public funding support. The CCUS industry has developed strategic decarbonization capabilities through its three main high-value segments which include integrated CCUS hubs and industrial plant retrofits and CO₂ transportation and storage systems.
Parallel to CCUS, the expanding onshore and offshore wind energy sector drives up demand for maintenance repair and operations (MRO) services. Wind turbine O&M services used to be controlled by Original Equipment Manufacturers (OEMs) but independent service providers (ISPs) now take over maintenance responsibilities after warranty periods while rope-access-based blade and tower inspection services growing worldwide. The European region has also demonstrated its commitment to large offshore wind farm through its investments on offshore HVAC and HVDC substation infrastructure for power transmission & voltage elevation. Together, CCUS and renewable energy infrastructure represent complementary avenues for investment, innovation and operational growth in the global energy transition.
Restraints & Challenges
Despite strong growth prospects, the industry faces challenges such as high capital expenditure for power projects, regulatory uncertainties, and dependency on fossil fuel infrastructure in certain regions. Grid integration complexities and environmental compliance costs can also hinder rapid development. Companies must navigate these constraints to sustain profitability and operational efficiency.
Capital Intensity and Sustainability Disconnect
The Energy & Power sector operates under a fundamental limitation because it must balance its need for substantial capital expenditures with the requirement to achieve long-term sustainability goals. The development of major oil and gas and renewable energy projects needs substantial initial funding which extends over long periods before generating returns. The current market volatility makes offshore projects more dangerous for Exploration & Production operators who choose to invest in onshore projects because these ventures need substantial capital expenditures and specialized services. The process of decommissioning non-producing oil and gas assets demonstrates this challenge because it needs billions of dollars in capital expenditures without producing revenue while crude price volatility makes funding commitments more difficult. The high costs of electricity grid modernization, renewable recycling systems and energy storage infrastructure development create financial strain on companies which extends their time until they can achieve returns on investment.
The financial barriers in the industry create additional sustainability challenges for operators. Operators face a challenge to meet their short-term profit goals while fulfilling their long-term transition obligations which governments have established through net-zero targets. The combination of complex policies, weak regulatory oversight and insufficient funding options creates project delays and scale-backs for companies. The lack of established recycling facilities for renewable energy components including wind blades and solar panels and batteries reveals a significant gap between declared goals and actual project delivery. The combination of these elements produces a pattern of delayed investment which slows down climate change reduction efforts while the industry remains trapped between its present financial needs and its future sustainability requirements.
Digital Transformation and Operational Challenges
The digital oilfield concept now uses artificial intelligence (AI) for predictive maintenance and real-time production optimization and reservoir modeling because digital transformation & automation brings significant changes to upstream oil and gas operations. The adoption of these technologies faces delays because operators must decide between the potential efficiency gains and downtime reductions against the risks of cybersecurity threats and the difficulties of integrating new systems with existing infrastructure. The energy industry faces a major challenge because operators show hesitation to implement new technologies at large scale in their capital-intensive and safety-sensitive operations. The same pattern is also evident in renewables, where recycling of solar panels, wind turbine blades and batteries faces major technical challenges and insufficient funding which prevents large-scale commercial implementation. The lack of proper end-of-life solutions for equipment weakens sustainability claims because operational challenges prevent the sector from achieving its transformation goals.
Key Opportunities
The Energy & Power sector offers wide-ranging opportunities driven by technology, infrastructure upgrades, and energy transition goals. Investments are flowing into renewables, electricity grids, and storage, while conventional markets are creating value through digitalization, asset optimization, and decommissioning. Emerging areas such as carbon capture, hydrogen, robotic automation, and subsea engineering are opening new revenue streams, positioning the sector as one of the most dynamic global investment landscapes.
Electricity Grid Expansion: A Fast-Growing Opportunity
The period from 2015 to 2021 saw electricity grid capital investment decrease from $332 billion to $310 billion because of reduced modernization activities and changing national priorities. But the worldwide focus on energy security since 2021 has triggered a rapid increase in investments which now demonstrate a growth rate exceeding 7.5% annually. The electricity grid development sector experienced a CAGR above 7.5% since 2021 while reaching $388 billion in 2024 CapEx and it will reach its peak at $650 billion between 2030 and 2032 to become one of the leading growth sectors in Energy & Power.
The market expands because of quick advancements in renewable energy systems, smart-grid technology and optimized transmission & distribution networks. The main investment sectors concentrate on digitalized grid management systems, demand-side flexibility solutions and cross-border interconnectors to create robust power grid systems. These initiatives support the global low-carbon energy transition by creating long-term infrastructure development paths that enhance operational excellence and market growth across worldwide electricity networks.
Energy Transition Opportunities – CCUS and Renewable Infrastructure
The worldwide transition to low-carbon energy systems generates substantial business prospects which span between Carbon Capture Utilization and Storage (CCUS) technology and renewable energy infrastructure development. The CCUS ecosystem grows swiftly because of worldwide Net Zero pledges and public funding support. The CCUS industry has developed strategic decarbonization capabilities through its three main high-value segments which include integrated CCUS hubs and industrial plant retrofits and CO₂ transportation and storage systems.
Parallel to CCUS, the expanding onshore and offshore wind energy sector drives up demand for maintenance repair and operations (MRO) services. Wind turbine O&M services used to be controlled by Original Equipment Manufacturers (OEMs) but independent service providers (ISPs) now take over maintenance responsibilities after warranty periods while rope-access-based blade and tower inspection services growing worldwide. The European region has also demonstrated its commitment to large offshore wind farm through its investments on offshore HVAC and HVDC substation infrastructure for power transmission & voltage elevation. Together, CCUS and renewable energy infrastructure represent complementary avenues for investment, innovation and operational growth in the global energy transition.
High-Growth Opportunities in Upstream Oil & Gas Services
The upstream oil and gas industry transforms into a market which depends on services and technological solutions while offering various promising growth prospects. The upstream sector of E&P companies allocated around $340 billion in 2024 for Opex (excluding levies) and dedicates an extra $10.2 billion for LNG plant maintenance, reflecting the scale of operational investment. Beyond routine operations, the industry now dedicates more resources to asset integration and specialized services which help maximize production from active oil and gas fields.
Regulatory driven high growth markets like asset decommissioning in regions such as the North Sea and Gulf of Mexico has also created a lucrative niche for field decommissioning services. At the same time, the implementation of new technologies allows operators to extend field life at reduced costs through the deployment of long subsea tie-backs in offshore areas such as the North Sea, South China Sea, Western Australia, Malaysia offshore and Gulf of Mexico. The market for upstream services is also experiencing growth through robotic automation which combines tank cleaning with ROV-based subsea inspections and AI-powered monitoring systems to boost operational performance and safety levels and reduce equipment downtime. Together, these developments illustrate a dynamic upstream services market driven by technological advancements, regulatory requirements and innovative solutions.
Capitalizing on Refinery Upgrades and COTC Opportunities
The refinery industry dedicated around $43 billion in 2024 on maintenance expenses which experts predict will increase to $57 billion by 2030 because operators want to maximize the operational life of their aging facilities. Refinery asset managers direct their efforts toward work-order optimization, short turnaround times and efficiency improvements after mechanical electrical and instrumentation upgrades to maintain maintenance costs below 3% of asset value. This has created significant MRO (Maintenance, Repair, and Operations) opportunities for O&G service providers.
The refining industry shifts its strategic direction by implementing Crude-to-Chemicals (COTC) and floating refinery business models. The TC2C program from Saudi Aramco represents a COTC technology which converts 70–80% of crude feedstock into valuable petrochemical products to boost profitability and open up fresh business prospects. The floating refinery design offers operational adaptability for offshore and distant locations which makes it suitable for developing markets and new exploration areas. The Asia-Pacific region and Middle Eastern countries lead the way in refinery-to-petrochemical upgrade investments which will drive downstream transformation and generate lasting value.
Competitive Landscape
The Energy & Power sector is highly diversified, encompassing conventional power generation, oil & gas, renewable energy, and supporting infrastructure. Its competitive landscape includes global utilities, integrated oil & gas majors, technology innovators, and service providers that collectively shape investment trends and operational standards. Leadership in this sector is determined not only by scale but also by technological capability, asset diversification, and ability to adapt to the energy transition.
Key Industry Players by Segment
| Industry Particulars | Industry Players |
|---|---|
| Power Generation | NextEra Energy, Enel, EDF, State Grid Corporation of China, Duke Energy |
| Integrated Oil & Gas majors | ExxonMobil, Shell, Chevron, BP, TotalEnergies, Equinor, Saudi Aramco |
| Refining and Petrochemicals | SABIC, LyondellBasell, Reliance Industries, ExxonMobil Chemical, Sinopec |
| Renewable and storage ecosystem | Vestas, Siemens Gamesa, Tesla, BYD, LG Chem, Orsted |
| Energy infrastructure and service providers | ABB, Schneider Electric, Halliburton, Schlumberger, TechnipFMC |
Note: Note: - Opex are estimated on the basis of Opex per boe process; and maintenance cost on the basis of historical available data, capacity utilization and maintenance contract values.