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A Powerful Dilemma: Reducing Energy Emissions While Meeting Rising Demand

Forecast ’25: In 2025, lawmakers will also pursue geothermal and nuclear power options and harden the grid against natural and human-caused threats.

By NCSL Staff  |  November 11, 2024

State legislatures play a key role in shaping the future of America’s energy system, setting priorities and providing both direction and support for state regulators and energy stakeholders. In the last year, states have been particularly focused on new and innovative emissions reduction strategies and ensuring the energy system is efficient and resilient.

Most states have been using new strategies to meet goals for reducing emissions and increasing the use of renewable resources while keeping up with increasing energy demand. At the same time, states face a growing set of both natural and human-caused threats to the grid, keeping energy policymakers busy heading into the next year.

Here’s a look at what might be in store for 2025.

NCSL Forecast ’25

This special report from State Legislatures News covers the topics NCSL’s policy experts anticipate will occupy state lawmakers’ time in 2025 legislative sessions. Read the full report here.

Hot Topic: Emissions Reduction Strategies Expanding and Evolving

State legislatures have been working to address emissions from the energy sector for years. At least 33 states and territories have active renewable or clean energy requirements, and more than half of those require 100% of the state’s electricity to be generated by clean or renewable resources sometime between 2030 and 2050. In addition, many states are seeking to improve the performance and efficiency of natural gas and other fuels without these specific renewable targets or requirements.

To address natural gas emissions specifically, many local governments and some state legislatures have required electrification of new homes and certain appliances, and more than 20 states have enacted “fuel choice” bills that prevent local governments from restricting access to fuels such as natural gas. Some states have taken an in-between approach, requiring new efficiency and emissions measures without bans or preemptions. These emissions reductions strategies have evolved in recent years, with energy storage, carbon capture, geothermal energy and nuclear power emerging in 2024 as options that could continue to grow in the coming year.

ACTION: NCSL has noticed an increase this year in policies aimed at getting energy storage systems deployed quickly and accelerating their connection to the grid, with about 175 bills introduced in at least 31 states in 2024. Many of the bills addressed regulatory barriers, either by including more storage in utility planning processes or streamlining certifications for energy storage facilities; other states addressed initial financial barriers to the deployment of large-scale storage systems. This trend is likely to continue through 2025 as states seek to balance energy demand with their efforts to reduce energy emissions with renewable resources.

Trending: Geothermal Energy

Geothermal power, which essentially uses heat from the earth to drive turbines, was another trending topic in 2024, with 11 mostly Western states considering legislation. Washington (SB 6039) and New Mexico (HB 91) enacted bills to develop geothermal resources, and New Mexico also created a revolving loan fund.

States that are not in hydrothermal “hot spots” are looking into resources such as geothermal heat pumps, so legislative action may well expand to new states and regions in 2025.

Trending: Nuclear Energy

At least 32 states introduced bills and over a dozen enacted legislation in 2024 to study nuclear energy as a potential noncarbon power source. Florida and New Hampshire, for example, required new studies of small modular reactor, or SMR, feasibility. More of these policies are likely in 2025, particularly around SMRs, which are still in the early stages of development and have the potential to provide value similar to traditional reactors but in smaller packages.

Hot Topic: Increased Risks as Energy Demand Grows

The increasing use of artificial intelligence and rising demand for electricity in a digital age—highlighted by concerns over power-hungry data centers—combined with growing threats to energy systems from both natural disasters and human actors, have been met with a strong legislative response. For example, legislatures are encouraging or requiring their state energy officials and utility commissions to plan for a reliable energy supply as new data centers come online. NCSL has launched a Data Center Working Group to tackle this challenging issue going into 2025. 

ACTION: With extreme weather and disasters continuing to grow in both magnitude and cost, lawmakers considered about 300 pieces of legislation on energy security and resilience, with at least 19 states enacting 35 bills, through the first half of 2024. Energy sector hazards are only expected to grow going into 2025, and it’s likely that state legislative action will increase in kind.

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