Energy innovation has always been described as a long‑term endeavour, yet the past year has demonstrated how rapidly prospects can shift when macro‑forces intensify. In 2025, a series of priorities became the new drivers of energy technology deployment: energy security, supply chain resilience, artificial intelligence (AI), industrial production and affordability. These 5 topics have all moved to the top of national policy agendas.
Many technologies that entered the market in recent years, solar PV, batteries, LEDs, advanced nuclear, virtual power plants and next‑generation geothermal, are now mature enough to benefit directly from this renewed policy push. Yet substantial scope remains to further reduce costs and enhance performance through targeted R&D.
Innovation milestones across 2025 spanned fusion energy, nuclear fission, geothermal, and critical minerals, marking them as strategic priority areas. Meanwhile, the updated 2025 net‑zero scenario showed progress: the share of emissions reductions dependent on non‑commercial technologies fell from 35% to around one‑quarter, reflecting significant advances in electrification technologies, renewable deployment and grid‑scale battery storage.
Industrial innovation also accelerated. From Rondo Energy’s 100 MWh solid‑state thermal battery to the world’s first commercial CO₂ terminal at Northern Lights, and from Namibia’s hydrogen‑based iron production to large‑scale hydrothermal liquefaction and progresses of large scale next-generation geothermal project by Fervo, 2025 provided tangible evidence that new technologies are transitioning from concept to commercial reality.
These shifts matter for industry. As electrification rises and reliance on some first‑of‑a‑kind projects (such as CCUS for process emissions and large‑scale hydrogen) becomes less central, companies must navigate a landscape where performance improvements, cost declines and agile supply chains determine competitiveness.
Exergy stands at the intersection of these macro‑trends. Observing the global acceleration in energy innovation, we are committed to translating these signals into practical industrial solutions, supporting clients as they navigate uncertainty, adopt next‑generation infrastructure and build resilience into their operations.
The five macro‑trends reordering energy innovation
Energy security as the primary driver
The re‑emergence of energy security as a core national priority has reshaped innovation pathways across 2025. Governments are focusing more heavily on domestic production, grid stability, and the diversification of critical technologies.
A project advancing in this direction is the HyPSTER underground hydrogen storage demonstration in France, which successfully completed four months of testing in 2025. Large‑scale hydrogen storage in salt caverns provides a crucial link between variable renewable electricity and continuous industrial or power‑sector demand. By enabling surplus renewable generation to be stored and dispatched over long periods, HyPSTER strengthens energy system resilience, supports seasonal balancing and reduces dependence on imported fuels. Its public–private co‑financing structure also shows how energy security, innovation policy and industrial strategy are increasingly intertwined.
Another strong example is the progress in enhanced geothermal systems, demonstrated by Mazama Energy in the United States. By reaching a record 331°C bottom‑hole temperature and targeting 400°C+ for a 15 MW system in 2026, Mazama shows how super‑hot geothermal can unlock 24/7 domestic baseload energy far beyond traditional geothermal regions. This type of firm, weather‑independent renewable resource expands a country’s ability to generate secure, dispatchable energy on its own soil, making it a strategically relevant pillar of long‑term energy security.
For Exergy, energy security translates directly into proven solutions that enhance industrial independence through on-site power generation via Waste Heat Recovery, baseload and domestic clean electricity from geothermal binary plants and heat pump systems enabling advanced process electrification for on-site use.
Supply chain resilience & critical minerals
Supply chain robustness is now a defining metric of competitiveness. Critical mineral availability, essential for batteries and electrification, has driven significant funding activity.
In 2025, critical minerals VC funding reached a record high, highlighted by major raises from companies such as Kobold Metals (USD 535M), GeologicalAI and Cornish Lithium. These investments emphasise increasing urgency to diversify sourcing, accelerate exploration and reduce geopolitical dependencies.
Exergy’s approach, centered on modularity, diversified technology supply chains with the possibility of localizing suppliers or equipment manufacturing, helps mitigate procurement risks. Exergy’s technology for geothermal also becomes an enabler in the production of sustainable lithium, using power from the binary plant to drive the lithium extraction process from geothermal brine as demonstrated in the United Downs project, the UK’s first deep integrated geothermal initiative.
Artificial intelligence accelerating R&D cycles
AI has become an indispensable catalyst for shortening technology readiness timelines. The Genesis Mission launched by the US government in November 2025 epitomizes this shift: a fully integrated AI‑driven scientific discovery platform leveraging supercomputers, national‑lab datasets and automated experimentation.
While AI’s strategic relevance spans multiple domains, its near‑term impact is clearest in energy innovation, where it accelerates material discovery, system optimization and performance validation.
Despite broader venture capital volatility, early‑stage funding for energy start‑ups remains stable, showing investors’ confidence that AI‑enabled innovation will continue driving new breakthroughs.
Industrial production cost reductions
Industrial decarbonization saw major progress in 2025 through scale‑ups of technologies that reduce both emissions and operating costs.
Key examples include:
- Arbios Biotech’s hydrothermal liquefaction facility, the world’s largest, converting wood residues into 50,000 barrels of bio‑oil annually.
- Rondo Energy’s 100 MWh thermal battery, achieving 97% efficiency, enabling renewable‑powered process heat.
- Electric boilers at Hydro’s Alunorte refinery, proving reliable at scale and delivering 270 t/hour of steam from electricity.
Exergy helps industrial clients adopt technologies that improve energy efficiency by integrating waste heat recovery through ORCs and heat electrification via industrial heat pumps into their operational strategies. These technologies not only reduce energy intensity but also enhance operational competitiveness by lowering operating costs and reducing Scope 2 CO₂ emissions.
In Bulgaria, Şişecam—one of the world’s leading producers of flat glass—reduced its energy intensity by installing Exergy’s ORC waste heat recovery system. The unit generates 4 MW of clean electricity for on‑site consumption and cuts Scope 2 CO₂ emissions by up to 14,000 tonnes per year, delivering both operational savings and measurable decarbonization benefits.
Affordability: technology maturation & market deployment
The IEA’s 2025 scenario shows a pivotal shift: reliance on non‑commercial technologies fell from 35% to around 25%, thanks to rapid advances in electrification and storage.
Battery storage deployment continues to expand sharply, enabling higher penetration of renewable electricity and stabilizing system costs. Meanwhile, corporate R&D spending in energy-related companies, more than USD 160 billion in 2024, signals that executives consider these technologies commercially credible and strategically necessary.
For Exergy’s customers, this means greater access to proven, cost‑effective solutions and faster payback on industrial decarbonization investments.
Funding landscape & investment signals
Public R&D spending plateaus
Global public energy R&D reached USD 55 billion in 2024 (IEA 2025), a 70% increase since 2015. However, growth paused in 2025 due to two factors:
- A temporary dip in EU‑level R&D disbursements.
- A reduction in US federal energy R&D allocations.
Despite this slowdown, spending remains historically high, with increased emphasis on energy efficiency and electricity grids, areas where Exergy’s solutions directly contribute to industrial transformation.
Corporate R&D continues despite slowdown
Corporate spending on energy‑related R&D surpassed USD 160 billion in 2024, though with the slowest growth since 2015. Higher capital costs and market uncertainty reshaped corporate portfolios, but energy efficiency, electrification and heavy‑industry solutions remain priorities.
For Exergy, this environment emphasizes the importance of differentiation, delivering robust, technically validated solutions with strong industrial performance metrics.
Venture capital trends: shift to AI, stability in emerging tech
Total energy‑related VC funding fell to USD 27 billion in 2025, the third annual decline. Investors shifted toward AI solutions, which represented one‑third of all VC deals.
However, emerging areas remain strongly funded:
- critical minerals
- geothermal
- low‑emission industrial processes
- fusion and next‑gen nuclear
- carbon dioxide removal
These align closely with Exergy’s strategic technology domains, indicating durable long‑term support.
Races to first: breakthrough achievements & their implications
Industrial heat batteries reach commercial scale
U.S. Rondo Energy’s 100 MWh thermal battery marks a major step in industrial decarbonization. Electricity – in this case from solar PV – is used to warm bricks to above 1 000°C and the heat is discharged as steam to a factory in the United States. With 97% efficiency and minimal heat loss, this technology establishes thermal storage as a commercially mature, high‑performance solution.
Next‑generation geothermal opens new frontiers
Mazama Energy’s 331°C EGS pilot, the hottest operational enhanced geothermal system to date, demonstrates that super‑hot rock geothermal can expand far beyond traditional geographies. Aiming for 400°C+ and 15 MW output in 2026, this validates ultra‑deep geothermal as a scalable frontier. The drilling rate, which averaged 23 metres per hour through hard rock was also an achievement, as was the uninterrupted operation for around 0.8 km without drill-bit or tool failures.
Such hot environments were previously considered too risky for geothermal development. Mazama Energy’s pilot plant was enabled by USD 20 million from the US government.
For Exergy, achievements in EGS reinforces geothermal’s role as a firm, dispatchable energy across wider regions worldwide and represent a perfect match with Exergy’s geothermal binary cycle power plants and its latest innovation, the Gemini Turbine, specifically designed to address the needs of large scale EGS power plants.
CO₂ capture & storage moves from pilot to commercial
The Northern Lights terminal entered commercial operation in 2025, marking a historic breakthrough for CCUS deployment. The fully operational hub captures and stores shipped CO2 volumes from Heidelberg Materials’ Brevik cement plant. The terminal offloads and temporarily stores liquefied CO2 before it is pumped through a 100 km subsea pipeline to offshore injection wells 2 600 metres below the seabed.
Around half of the cement plant’s emissions will be captured, resulting in roughly 400,000 t/year of CO₂, stored annually supported by unprecedented public funding.
Policy & global competitiveness: a new framework
2025 marked a decisive pivot in global energy innovation policy. While climate mitigation remains essential, governments are increasingly framing energy policy toward enabling industrial competitiveness, supply chain resilience, and technological leadership.
Key themes include:
- Industrial competitiveness: policies now prioritize domestic value creation.
- Critical minerals and supply chain resilience: new offices, grants and exploration programs.
- Electricity security & grid resilience: accelerated investment in grid‑stabilization technologies.
- AI for innovation: governments encourage AI‑enabled R&D platforms.
- Accessible funding: streamlined grants, advisory services and multi‑instrument financing.
This policy realignment favors providers like Exergy, companies offering solutions that enhance industrial productivity, enable domestic energy resources and contribute to competitiveness.
What this means for energy technology decision‑makers
Risk diversification across technology portfolios
No single pathway will decarbonize industry and meet competitiveness goals. Decision‑makers must diversify across geothermal, electrification, thermal storage, hydrogen‑compatible processes and carbon management.
Exergy’s portfolio, spanning geothermal, thermal solutions and industrial electrification, —aligns with this multi‑trajectory strategy.
Supply chain as competitive advantage
Critical minerals constraints and supply chain fragility will shape technology adoption. Solutions with modularity, flexible sourcing and minimal reliance on vulnerable materials will outperform.
Speed to market & technology readiness
AI‑accelerated R&D and the rise of public R&D facilities shorten TRL progress and favor early movers. Demonstrated projects like those Exergy delivers help clients reduce uncertainty and secure faster returns on investment.
Positioning Exergy for 2026 and beyond
The convergence of five macro‑trends, energy security, supply chain resilience, AI, industrial production and affordability, signals a decisive shift toward rapid adoption of next‑generation industrial energy solutions.
2026 stands as an inflection point, where previously emerging technologies reach commercial viability and begin to scale at industrial speed. From geothermal heat to thermal storage, electrified process heat, hydrogen‑compatible metallurgy and carbon‑aware infrastructure, the decade ahead favors companies capable of translating innovation into operational excellence.
Exergy is uniquely positioned in this landscape. As a technology‑driven industrial partner, we bridge global innovation signals with on‑the‑ground application, ensuring clients can integrate advanced solutions with confidence, scalability and economic clarity.
Our focus remains clear: empower industries to innovate faster, operate more efficiently and compete more effectively as global energy systems undergo their most significant transformation in decades.
Want to learn more about the progress of energy innovation? Discover additional insights in the IEA’s latest report, The State of Energy Innovation 2026.
Energy innovation is accelerating. Is your organization prepared? Explore how Exergy’s technology aligns with 2026’s critical trends.
