Five trends shaping energy and infrastructure in 2025

James Wood-Robertson, head of our energy & infrastructure sector, outlines some of the upcoming trends and developments to expect this year for the sector.

1. Corporate power purchase agreements (CPPA)

Autumn’s successful contract for difference (CfD) Allocation Round 6 (AR6) made headlines for the significant boost it gave the UK offshore wind sector, but the results were also a big success for onshore wind and solar PV projects.

While AR6 demonstrated the significance of CfD as a favoured route to market for UK clean energy generation projects, it also highlighted the role and importance of the corporate PPA (CPPA) market, with high levels of CPPA activity before, during and after the AR6 announcement. The UK CPPA market isn't merely a backup for unsuccessful CfD projects. CPPAs allow deals to be concluded outside the fixed (and sometimes uncertain) timetable of the allocation rounds.  For many developers, CPPAs are also a way of balancing the portfolio risk across government-backed (CfD), corporate-backed (CPPA) and merchant (shorter-term utility PPAs) routes to market.  For others, there is also a strategic and reputational value in partnering with large corporates with strong sustainability credentials.

Last year also saw the continuance of a trend which shows no signs of slowing down: the popularity of virtual PPAs (VPPAs). Driven by high costs and a general reluctance on the part of licenced suppliers to sleeve intermittent volumes, enthusiasm for VPPAs continued to rise. We expect that trend to continue this year as a way for more corporates to green their energy supply, fix a portion of their energy prices and financial support the delivering of new clean energy projects without the need for bespoke sleeving solutions.

Despite the growth in the CPPA market, they remain legally and technically complex to implement, meaning only the larger corporates with big energy demands (and big balance sheets) can routinely take advantage of them. However, novel forms of power procurement are gaining traction and opening up CPPAs to different types of buyers and generators alike. Buyers’ clubs, many-to-many power purchase arrangements and a larger corporate acting as an anchor buyer and enabling smaller buyers to participate are all areas we have seen significant growth in – and 2025 promises more of the same.

We and some of our clients discussed the growing trend for democratisation of clean power purchase as part of ITN Business’s “Power Shift” programme in November last year: 

2. EV charging infrastructure

The government has followed up its pledge to reinstate the 2030 phase-out date for the sale of new petrol and diesel vehicles by opening a consultation on the Zero Emission Vehicle (ZEV) Mandate, which dictates the percentages of ZEVs which manufacturers must sell up to 2035. The industry generally agrees that the return to the 2030 phase-out date provides welcome certainty, following the billions already invested in the transition.

On the ZEV mandate, some OEMs, such as Stellantis, met their ZEV Mandate requirements, but deep discounting was needed in the latter part of 2024 to achieve this.  Whilst there are reasons to be optimistic, the industry’s view leans towards government incentives being required to support the industry in meeting the targets and stimulate growth on the demand side. 
Chris Pritchett is chairing a session at the SMMT Electrified Event in March discussing the ZEV mandate with Kia, Ford, Nissan, BMW and with analysis from Autotrader. 

Indelibly tied with EV production and sales, EV infrastructure continues to be rolled out apace, and we look forward to exciting progress on HGV charging, as we seen the outputs of eFreight2030 and Electric Freightway. We also expect a range of vertical and horizontal integrations in the EV charging space, as price pressures cause providers to look to drive efficiencies through leveraging existing strengths and access to land and consumers. ChargeUK have joined calls for the ZEV Mandate to be kept in place, as this provides a strong market signal for EV demand and likely utilisation of charging infrastructure, but there will be concern that any dialling-down of these requirements could weaken the investment case in the charging sector.

We look forward to large hub developments such as Instavolt’s Winchester site, but also seeing the impact of more down-to-earth catalysts, such as government guidance on cross-pavement charging solutions for EV drivers without off-street parking. It’s measures such as this which can ensure a much wider uptake in consumer confidence, and a fairer transition to electrified mobility.

3. Data centres

As noted in the recent Tech UKreport, “Foundations for the future; How data centres can boost UK economic growth”, to which we were a main contributor, the UK data centre market is expected to see significant growth and transformation this year.

The UK data centre market is projected to grow at a compound annual growth rate (CAGR) of 10.49% from 2024 to 2029, reaching a market volume of 3.61 thousand MW by 2029. Key drivers include the rising adoption of cloud services, the proliferation of Internet of Things (IoT) devices, and the expansion of artificial intelligence (AI) applications, all of which require large-scale data storage and processing capabilities.

Hyperscale data centres, designed for large-scale operations, are expected to dominate the market, especially as companies focus on efficiency, sustainability, and cost reduction. Additionally, the market is expected to face challenges such as rapid technological advancements, stricter regulations, and competition from European counterparts.

4. Data centres and energy security

The growth in demand for data centres highlighted above means there is a corresponding need for large volumes of energy (in the forms of both electricity and cooling). Given the essential role that data centres play in our everyday lives, there is understandably a much greater focus on energy security and reliability.

The potential interface between energy developers and the owners and operators of high-demand data centres are clear, and interested parties are beginning to explore how to match the demand to the generation. Some of the trends we expect to continue through this year include the following:

• CPPAs providing data centre owner/operators with long-term price certainty and clean power.
• private-wire PPAs providing a direct supply of clean power from local generation assets direct to the data centre
• experienced developers of energy systems offering whole-system grid resilience and import capacity-boosting solutions as a way of unlocking and accelerating data centre development in parts of the country where grid capacity constraints would otherwise make rapid deployment impossible
• wider collaboration through strategic partnerships targeting co-development of data centres alongside energy generation assets and other clean energy system infrastructure, with each part of the development enabling the development of the other.

We can expect the outcome of these varied collaborations to be advantageous for both the participants and for the wider energy and infrastructure sectors in the UK – with an increase in new, greener data centres matched with an increased adoption of clean energy systems.

5. Clean energy 2030

The government has published its Clean Power 2030 Action Plan (CP2030), a manifesto for taking control of UK energy security and supercharging installation of clean technologies and associated infrastructure. One aim is for clean sources to produce as much power as the UK’s annual consumption by 2030. Targets for specific technologies are:

That represents c.284%-308% of current installed capacity. As well as strategies on resourcing, short and long-term storage, and electricity market reform, CP2030 details three key strategies for achieving this ambitious target:

• grid connections: to address the significant backlog, projects will be prioritised based on readiness, rather than the current ‘first-come-first-served’ basis
• planning: the National Planning Policy Framework (NPPF) updates will encourage approval of renewables projects. Onshore wind has been added to the Nationally Significant Infrastructure Projects (NSIP) regime, with a 100MW threshold, and the solar threshold has been increased to 100MW. This should encourage the submission of more projects which will not be caught by the more stringent NSIP requirements
• renewables auctions: various reforms are proposed to improve the success of CfD projects, including the approach to reference prices, a schedule of intended capacity for upcoming allocation rounds to improve predictability and a potential increase to the 15-year CfD term to improve viability.

The framework outlined in CP2030 is positive and encouraging. Significant resources are now required, however, to ensure policy setting, planning processes and infrastructure delivery proceed efficiently to achieve this challenging target.