Evaluation of Strategy of Power Generation Business under Large-Scale Integration of Renewable Energy

Gert Brunekreeft, Marius Buchmann, Toru Hattori and Roland Meyer

No 23, Bremen Energy Working Papers from Bremen Energy Research

Abstract: The German energy transition massively alters the market structure of electricity supply and forces incumbent electric utilities to rethink their business strategies. We analyze three main developments that undermine the former market dominance of the “Big 4” incumbents in Germany. First, nuclear phase-out reduces their market shares and creates financial risk of nuclear waste decommissioning. Second, the large-scale integration of renewables fosters market entry from third parties and intensifies competition. Third, a possible coal-phase out in combination may have positive effects on market revenues but tends to increase regulatory risk. In total, incumbents face “disruptive Challenges” and need to find new value-creating products and services beyond sole energy supply. Promising focus areas are renewable energies, the distribution business, and smart, customer-oriented solutions.

Keywords: Electric Utilities; Market Structure; Firm Strategy (search for similar items in EconPapers)
JEL-codes: L11 L94 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2016-03
New Economics Papers: this item is included in nep-com, nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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