Electricity markets remain unstable and gas supplies are uncertain. The European Commission has taken action but is it enough? All is revealed in the 16th edition of the European Energy Markets Observatory
IntroductionCapgemini's European Energy Markets Observatory is an annual report initiated in 2002. It tracks the progress of the establishment of an open and competitive electricity and gas market in EU-28 (plus Norway and Switzerland) and the reaching of the EU's Energy-Climate objectives. The report looks at all segments of the value chain and analyzes leading-edge energy themes — digital revolution, customer experience, smart grids and energy transition — to identify key trends in the electricity and gas industries.
The observatory is produced in collaboration with three partners:
Key FindingsThis year's report has identified several developments currently impacting the electricity and gas industries, including:
- Very disturbed electricity markets: Negative wholesale prices, gas-fired plant closures and increased retail prices characterize the market.
- Insufficient reforms at the European level: The European Commission has initiated several reforms such as targeting a 40% reduction in greenhouse gases by 2030, linking renewables subsidies to market conditions and accepting capacity markets implementation. However, these may not be enough.
- Threatened gas security of supply: The Russia-Ukraine crisis could mean cuts in gas supply to some countries this winter. Mitigating measures like investments in pipelines bypassing Russia, new storage capacities and increase in LNG imports have not materialized, even though shale gas exploration has started in some countries.
- New energy transition plans: Germany has been the first to develop its plan with a massive development of renewables and has faced challenges. Other Member States would do well to learn from Germany before developing their own plan.
Facing a Big Data Future: The European Commission has already committed to an ambitious multi-sectoral R&D program known as Horizon 2020. Big data will undoubtedly play a significant role across all sectors going forward, which underscores broader digital transformations that are unfolding worldwide. Utilities should take advantage of this transformation to become truly Digital Utilities.