Energy markets are undergoing significant changes. To ensure long-term success, energy trading companies like SANIA Power must adapt to new drivers of change. Some of them are:
The EU’s total share of renewable power generation, especially wind and solar, has increased significantly. The growth has been accelerated by lower production costs and technology breakthroughs, making renewable energy competitive with fossil fuels. Furthermore, coal is being replaced by natural gas as the new marginal energy supply to ensure grid stability. Lastly, emerging technologies enable exploiting renewable energy in other energy-consuming sectors, such as the heating and transport sector. At the same time, storage of surplus renewable power is made possible through battery technologies or by converting power to gaseous energy carriers (e.g. hydrogen and methane).
Digitalisation is changing the way commodities are bought and sold in the marketplace, redefining traditional sources of competitive advantages. Through smart grids, big data, artificial intelligence, virtual power plants and peer-to-peer trading, digitalisation unlocks new opportunities, and a more interconnecting market emerges. In addition, these technologies enable companies to access and digest a growing amount of complex data.
In the transition towards renewable power production, a shift is taking place from centralised producers to small, decentralised producers and local grids. Emerging decentralised storage and aggregation technologies, together with digitally enabled active prosumers, will come to play a crucial role in providing additional flexibility to the electricity system.
Major transformations are underway for the global energy sector, from growing electrification to the expansion of renewables and the globalisation of natural gas markets. Global energy demand is expected to grow by more than 25% in the period to 2040. In addition, western countries serve as a blueprint for emerging markets as they liberalise their energy markets to attract foreign investments and expertise and to develop efficient markets.
Incumbent energy companies are changing their business models towards greater specialisation driven by decreasing margins, increased complexity, and disruptive market changes. At the same time, major oil and gas companies are entering the power business to gain a share in the growing market space driven by renewables and electrification trends. All-in-all, energy markets are facing greater competition leading to further specialisation and consolidation.