The Power Market – A Complex Equation Requiring Difficult Decisions

The energy system was created decades ago with a design of few, large-scale energy producers which has been a reliable and stable system for the needs we have had. With the recent years great efforts to transition to green energy and immense increase of consumption due to a general electrification of the society, we suddenly find ourselves challenged by a system with many small-scale energy producers and a higher consumption than ever forecasted. As the power use, that is shortly put the momentary total consumption at a given time, is growing we need to have a reliable power reserve to minimize risk of planned power shortages.

The transition into renewable energy production means it becomes more sustainable. On the other hand, renewable energy production is hard to plan as it is highly weather dependent, which makes the price very volatile. When there is good weather conditions, we have a surplus of energy making the price very low, but when the conditions are unfavorable it is instead very expensive due to low supply.

The future pricing of energy brings challenges to the future business models and revenue for energy producers. To invest into having an energy reserve to be able to meet the power demand during the whole year, regardless of weather conditions, is considered to be unprofitable.

Capgemini Invent has conducted a market study on the sectors view on the future of the power market as a possible solution. Read this Point of View to be updated on the current view on the challenges and possible solutions for the power problem.