Sunset or Sunrise? Electricity Business in Northwest Europe

CIEP, April 2014
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Business models of European utilities are under pressure.

The business case for conventional generation has changed dramatically, while many questions exist around large-scale RES developments such as large-scale offshore wind projects. At the same time, distributed technologies have shown significant cost declines, most notably solar PV, opening up the electricity market for new entrants with alternative business models.

This CIEP paper provides insights into present challenges for utilities by investigating changed business logic. Moreover, it sketches the rationale behind three alternative business models, i.e. the revitalized utility, the large-scale RES generator, and the new electricity service platform. Additionally, it explains an alternative outcome for a utility, i.e. the default option: the state-sponsored utility.

As such, this paper provides insights into present challenges for utilities and explores how these challenges could potentially translate into significant challenges for public policy makers.