FUTURE PROOFING
European power utilities face multiple challenges in 2025 and beyond
From energy transition to decarbonisation and grid modernisation, Christoph Spörri, Product Director of Utilities at VertiGIS, takes us through the challenges, issues with ambitious targets, pricing strategies and more.
I n 2025, the large-scale integration of renewable energy sources will continue across Europe, with solar power generation predicted to increase by 20 % year-on-year, contributing to a record number of negative power prices across Europe. The overall volatility in energy prices, especially due to factors like fluctuating demand, geopolitical instability and global commodity prices, is a concern for utilities. Additionally, the rising costs of raw materials, coupled with the need for infrastructure investment to support the energy transition, will continue to put a strain on power utilities’ financial health.
This is all further complicated by the ongoing reforms across the European energy market. It is hard for power utilities to manage financial risk in such an unstable market environment. Therefore, hedging energy prices and managing exposure to international commodity markets as well as navigating price cap policies and energy subsidiary mechanisms are all concurrent issues that power utilities must contend with.
Ambitious decarbonisation targets
Despite these challenges, European power utilities are still committed to ambitious decarbonisation targets, focusing on transitioning to renewable energy sources, increasing energy efficiency, and reducing carbon emissions. This transition will involve several hurdles, including significant investments in new infrastructure( such as wind, solar, and energy storage systems), as well as managing the sporadic nature
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