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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
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    File URL: http://bremen-energy-research.de/wp-content/bewp/bewp23.pdf
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    References listed on IDEAS

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    1. Gert Brunekreeft & Roland Meyer, 2015. "Anreizregulierung bei Stromverteilnetzen: Effizienz versus Investitionen," Bremen Energy Working Papers 0021, Bremen Energy Research.
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    Cited by:

    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).

    More about this item

    Keywords

    Electric Utilities; Market Structure; Firm Strategy;

    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

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