As another year passes it is a time for reflection, and to think about what the year ahead will bring. Below are 5 predictions for 2025 from the DERMS team at Mitsubishi Electric Power Products, Inc.:

1. States will come to the fore:  It is impossible to imagine that the change in US administration will not have an impact. President Trump’s energy policy leans into fossil fuel to reduce energy costs at a cost to the climate.   But this happened before, and the individual states stepped in setting even more ambitious greenhouse gas emission reduction targets. We expect to see the same response again. We also expect to see some of the federal funding policies be removed or reduced. While GRIP and GETS funding has been stimulating the sector, it has done so with less of a clear focus on solving problems and delivering immediate value. The interconnection, market integration and customer services challenges don’t go away as investment in renewable energy projects is still financially viable and electric load growth shows no signs of slowing due to data center, vehicle electrification and onshoring manufacturing demands. We therefore predict a move to more targeted solutions rather than grand programs backed by government subsidy.
2. The battle for control of the edge: Demand response has changed immensely in the last 5 years due to changes in technology (to provide low-cost connectivity). Low-cost connectivity via OEM Edge platforms, and piggybacking on customer broadband, has become a de facto standard. But it is now coming at a cost, and utilities are wise to the growing monopoly. It is normal in a regulated industry to respond to these challenges with standards. In 2025 we predict that standards, like IEEE 2030.5 and OpenADR3.0, will become increasingly important for utilities to deliver cost effective demand response programs. 
3. Data wars: Artificial intelligence (AI), in the form of large language models and generative AI, is starting to find its way into practical utility applications. While we see AI supporting non-critical applications (such as forecasting, markets, asset management, and vegetation management), it is in operational systems that in 2025 we will start to see them used. Examples would include filling in operational data gaps, accelerating the execution of advanced analytics with the possibility of some scientific and technological breakthroughs on physics-informed methods and models that could subsequently be applied to power system operational tasks. The problem of course is that the method is only as good as the data it is trained on, so just like other applications the secret to success is getting hold of the most and best operational data sets on which to train and refine the models. Enter the data wars.
4. Customer expectation: Customers are increasingly used to dealing with complex systems via apps and are comfortable engaging with them. We may have hated the ‘dynamic’ pricing model implemented by Ticketmaster, but we all know how to find bargains, reduced prices or avoid surges. With a need for increased flexibility in the power system to minimize costs and keep the lights on, we think customers will increasingly want to, and expect to, engage with their energy use and bill in the same way as Uber. In 2025, expect to see utilities ramping up new and innovative tariffs and customer engagement models.
5. Virtual Power Plants (VPPs) scaling up: VPPs, as a concept, have been around for years now but in 2024 gained increasing attention with a variety of new players wading in. Aggregators, utilities, states, tech vendors, OEMs are all now talking VPPs. The definition does not need to be crisp or static to see the general trend of making diverse DER useful and valuable for a wide range of different purposes including peak load management, wholesale market participation and system reserve services. It’s hard to see any future (2025 and beyond) where VPPs do not gain ground as the finance, business model, and customer acceptance is powered by more favorable regulation and standards, as well as growing volumes of installed DER with advanced capabilities and emerging economic drivers.