IDEAS home Printed from https://ideas.repec.org/p/bei/00bewp/0023.html
   My bibliography  Save this paper

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

Author

Listed:
  • Gert Brunekreeft
  • Marius Buchmann
  • Toru Hattori
  • Roland Meyer

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.

Suggested Citation

  • Gert Brunekreeft & Marius Buchmann & Toru Hattori & Roland Meyer, 2016. "Evaluation of Strategy of Power Generation Business under Large-Scale Integration of Renewable Energy," Bremen Energy Working Papers 0023, Bremen Energy Research.
    • Handle: RePEc:bei:00bewp:0023
    as

    Download full text from publisher

    File URL: http://bremen-energy-research.de/wp-content/bewp/bewp23.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gert Brunekreeft, Marius Buchmann, and Roland Meyer, 2016. "The Rise of Third Parties and the Fall of Incumbents Driven by Large-Scale Integration of Renewable Energies: The Case of Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    2. Gert Brunekreeft & Marius Buchmann & Roland Meyer, 2016. "The Rise of Third Parties and the Fall of Incumbents Driven by Large-Scale Integration of Renewable Energies: The Case of Germany," Bremen Energy Working Papers 0024, Bremen Energy Research.
    3. Gert Brunekreeft & Roland Meyer, 2015. "Anreizregulierung bei Stromverteilnetzen: Effizienz versus Investitionen," Bremen Energy Working Papers 0021, Bremen Energy Research.
    4. Peter Cramton & Steven Stoft, 2006. "The Convergence of Market Designs for Adequate Generating Capacity," Papers of Peter Cramton 06mdfra, University of Maryland, Department of Economics - Peter Cramton, revised 2006.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sugimoto, Kota, 2021. "Ownership versus legal unbundling of electricity transmission network: Evidence from renewable energy investment in Germany," Energy Economics, Elsevier, vol. 99(C).
    2. Gert Brunekreeft, Marius Buchmann, and Roland Meyer, 2016. "The Rise of Third Parties and the Fall of Incumbents Driven by Large-Scale Integration of Renewable Energies: The Case of Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    3. Specht, Jan Martin & Madlener, Reinhard, 2019. "Energy Supplier 2.0: A conceptual business model for energy suppliers aggregating flexible distributed assets and policy issues raised," Energy Policy, Elsevier, vol. 135(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giulietti, Monica & Le Coq, Chloé & Willems, Bert & Anaya, Karim, 2019. "Smart Consumers in the Internet of Energy : Flexibility Markets & Services from Distributed Energy Resources," Other publications TiSEM 2edb43b5-bbd6-487d-abdf-7, Tilburg University, School of Economics and Management.
    2. Markus Flaute & Anett Gro mann & Christian Lutz & Anne Nieters, 2017. "Macroeconomic Effects of Prosumer Households in Germany," International Journal of Energy Economics and Policy, Econjournals, vol. 7(1), pages 146-155.
    3. Kristina Stoiber & Kurt Matzler & Julia Hautz, 2023. "Ambidextrous structures paving the way for disruptive business models: a conceptual framework," Review of Managerial Science, Springer, vol. 17(4), pages 1439-1485, May.
    4. Maarten Wolsink, 2020. "Framing in Renewable Energy Policies: A Glossary," Energies, MDPI, vol. 13(11), pages 1-31, June.
    5. Ignacio Mauleón, 2020. "Economic Issues in Deep Low-Carbon Energy Systems," Energies, MDPI, vol. 13(16), pages 1-32, August.
    6. Oberst, Christian A. & Schmitz, Hendrik & Madlener, Reinhard, 2019. "Are Prosumer Households That Much Different? Evidence From Stated Residential Energy Consumption in Germany," Ecological Economics, Elsevier, vol. 158(C), pages 101-115.
    7. Newbery, David & Pollitt, Michael G. & Ritz, Robert A. & Strielkowski, Wadim, 2018. "Market design for a high-renewables European electricity system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 695-707.
    8. Tooraj Jamasb and Manuel Llorca, 2019. "Energy Systems Integration: Economics of a New Paradigm," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    9. Buchmann, Marius, 2017. "The need for competition between decentralized governance approaches for data exchange in smart electricity grids—Fiscal federalism vs. polycentric governance," Journal of Economic Behavior & Organization, Elsevier, vol. 139(C), pages 106-117.
    10. Marius Buchmann, 2016. "Information Management in Smart Grids - the need for decentralized governance approaches," Bremen Energy Working Papers 0025, Bremen Energy Research.
    11. Gert Brunekreeft & Marius Buchmann & Martin Palovic & Anna Pechan, "undated". "Resilience regulation: An incentive scheme for regulated electricity network operators to improve resilience," Bremen Energy Working Papers 0044, Bremen Energy Research.
    12. Barazza, Elsa & Strachan, Neil, 2020. "The impact of heterogeneous market players with bounded-rationality on the electricity sector low-carbon transition," Energy Policy, Elsevier, vol. 138(C).
    13. Horváth, Dóra & Szabó, Roland Zs., 2018. "Evolution of photovoltaic business models: Overcoming the main barriers of distributed energy deployment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 623-635.
    14. Sugimoto, Kota, 2021. "Ownership versus legal unbundling of electricity transmission network: Evidence from renewable energy investment in Germany," Energy Economics, Elsevier, vol. 99(C).
    15. Andor, Mark A. & Frondel, Manuel & Schmidt, Christoph M. & Simora, Michael & Sommer, Stephan, 2015. "Klima- und Energiepolitik in Deutschland: Dissens und Konsens," RWI Materialien 91, RWI - Leibniz-Institut für Wirtschaftsforschung.
    16. Finon, Dominique & Meunier, Guy & Pignon, Virginie, 2008. "The social efficiency of long-term capacity reserve mechanisms," Utilities Policy, Elsevier, vol. 16(3), pages 202-214, September.
    17. Dominique Finon, 2013. "The transition of the electricity system towards decarbonization: the need for change in the market regime," Climate Policy, Taylor & Francis Journals, vol. 13(sup01), pages 130-145, March.
    18. Papavasiliou, Anthony & Cartuyvels, Jacques & Bertrand, Gilles & Marien, Alain, 2023. "Implementation of scarcity pricing without co-optimization in European energy-only balancing markets," Utilities Policy, Elsevier, vol. 81(C).
    19. Gerard Llobet and Jorge Padilla, 2018. "Conventional Power Plants in Liberalized Electricity Markets with Renewable Entry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    20. Gert Brunekreeft & Roland Meyer, 2018. "Cross-border Electricity Interconnectors in the EU: the Status Quo," Bremen Energy Working Papers 0027, Bremen Energy Research.

    More about this item

    Keywords

    Electric Utilities; Market Structure; Firm Strategy;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bei:00bewp:0023. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marius Buchmann (email available below). General contact details of provider: http://bremen-energy-research.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.