The Rocky Road Ahead for European Power Markets

Author photo: Florian Güldner
ByFlorian Güldner
Category:
ARC Report Abstract

The profitability of the European electric utilities has suffered drastically over the last years, as have investments. However, ARC Advisory Group believes that the boom in renewables and other "green" power generation technologies will continue even as the first generation of wind turbines face replacement amid decreasing demand. However, many opportunities exist for market participants and technology suppliers alike in this challenging market.

One of the most promising trends for the future could be "polygeneration" plants that can run on a variety of energy sources and produce not only electricity, but also chemicals and chemical components.

Recent Market Developments
A series of recent events have the potential to reshape the landscape of the electric power industry in Europe over the long run. These include:

  • Ukraine crisis and conflicts with Russia
  • Apparent dissolution of the Desertec initiative to bring distant solar energy to Europe
  • Political troubles in Germany
  • Innovative approaches to coal-fired generation incorporating carbon capture and sequestration (CCS)
  • Futuristic solar generation of hydrogen to fuel power plants

 

The following chart summarizes the consolidated revenue and capital ex-penditure development of the major European players in the power mar-ket: EDF, Endesa, ENEL, E.On, GDF Suez, Iberdrola SA, and RWE. These companies represent the main areas of the European power industry, including Russia.

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Keywords: Wind Turbines, Solar, Polygeneration Plants, Europe, Electric Power Markets, Capital Expenditures, ARC Advisory Group.

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