5 trends driving energy retail in 2025

Predictions and opportunities from Enode CRO, Thorvald Thorsnes

Electrification, digitization and changing consumer attitudes mean the energy industry is evolving before our eyes.

2024 brought big changes and progress in some important areas. Retailers across Europe started experimenting with tariffs, consumer flexibility moved up the strategic agenda, and more new products came to market to revolutionize the way consumers engage with their energy services.

But there’s a lot of ground still to cover in 2025. With only 5 years left to meet Net Zero targets, we’re at a tipping point in the energy transition. In the next 12 months, innovation needs to scale rapidly to ensure consumers are equipped with the tools they need to participate.

Here’s my take on the trends shaping the market, and the changes we can expect to see in the year ahead.

1. Energy retailers will seize the consumer flex opportunity

Energized by the early success of market leaders like Tibber and Octopus Energy, retailers across Europe are laser-focused on unlocking consumer flexibility.

It’s a once-in-a-lifetime opportunity. DERs are entering consumers’ homes at pace, and those that empower consumers to optimize and monetize their assets are set to win a large and growing market.

It’s not only retailers that have their eyes on the flexibility prize: it’s becoming an increasingly competitive space, with OEMs and HEMS providers also throwing their hats into the ring.

But it’s a race that incumbent energy retailers are uniquely well-placed to win. They have three key advantages:

• ownership of the customer relationship and interface with existing energy services
• access to insights and data about consumer behavior
• ability to monetize flexibility as existing BRPs with established trading teams.

Others might be more agile, or own important parts of the value chain, but it’s retailers who have the head start in terms of access to consumer eyeballs and energy markets.

Building flexibility products is complex, and retailers still have a way to go to understand the necessary tech stack, operational capabilities and consumer proposition. But they’ll be fighting to take the first-mover position, and my bet is they’ll win.

2. Energy startups will move into the retailer space

Given the advantages of energy retailers’ position in the market, it shouldn’t come as a surprise that more companies are moving into their space.

Software specialists with existing customer bases are already at work to reposition themselves as retailers and claim more of the value chain, including 1komma5, tado° and Tesla.

But so far, they haven’t gained traction as quickly as anticipated. We haven’t yet reached ‘fintech hype momentum’, with hundreds of players flooding the market to challenge incumbents.

I expect that to change in the next 12 months. Consumers are prioritizing sustainability in their energy choices, and now not only want but need better energy services.

With the whole industry working on solving for flexibility, it won’t be long before proven propositions and routes to market are established. That will leave the door open for startups to rival slower-moving incumbents.

Where they outperform the rest of the market is in building slick user experiences – which brings me to my third prediction.

3. Customer-centricity will be critical to win market share

The entire energy industry is being reshaped around consumers, whose consumption patterns, expectations and levels of engagement are all trending upwards.

That presents an opportunity for energy service providers to move beyond mere commodities, and play a more meaningful role in consumers’ lives.

In the future of energy, superior customer experience is a critical success factor. The solutions that will win are the ones that help consumers realize the most value from their energy devices, and do so in the most seamless way.

Consumers are more engaged with – and more motivated to change – their energy consumption than ever before. But they’ll lose interest if solutions and experiences continue to fall short of their expectations. To date, energy services haven’t matched up to the digital experiences in almost every other part of consumers’ lives, and that puts the entire energy transition at risk.

In my opinion, delivering slick, digital-first experiences will take center stage for players across the ecosystem in 2025.

4. AI will cause some problems, and solve some others

I couldn’t write a predictions rundown without mentioning the rise of AI.

It’s a blessing and a curse when it comes to the energy system. On the one hand, the arms race for AI and the additional energy required to service data centres is causing demand to spike dramatically at the grid edge.

But on the other, it could help our industry offer the user-friendly green solutions that consumers now expect as standard. AI could revolutionize energy management in 2025, making predictive energy tools, automated demand-response systems, and dynamic pricing models more widespread.

Done right, advancements in AI-driven energy solutions could help reduce global energy demand by up to 10% by 2030. Either way, there’ll be much more debate (and hopefully, many more positive outcomes) as AI enters the mainstream.

5. Regulatory shifts will drive open energy innovation

Policies promoting an open energy system are already reshaping the energy landscape.

The EU Data Act mandates that energy data be shared securely and transparently, while the Renewable Energy Directive states that battery and EV manufacturers should make information available in real time and for free.

Both come into effect this year, marking a sea change in the way that connected energy products and services across Europe interact.

By enabling greater data access, transparency, and interoperability, this regulation creates opportunities for businesses to deliver smarter, more personalized energy services that empower consumers with greater control over their energy use.

It brings us one crucial step closer to an open energy system, and paves the way for more policies that support innovators in the space.